Today’s News 16th October 2018

  • Are We Headed For A US-Turkey "Fresh Start" After Brunson's Release?

    The FT editorial board says the time is ripe for rapprochement between the US and Turkey as Pastor Andrew Brunson, freed after two years of under Turkish captivity on charges of espionage, found himself sitting in the Oval Office across from President Trump less than a mere 24 hours after his release. 

    Is it time for a “fresh start” as FT suggests

    The freeing of the American pastor, who had been charged with espionage, ends a high-profile stand-off between the US and Turkey. It also provides an important opportunity to make a fresh start in the crucial relationship between Washington and Ankara. Turkey and the US matter to each other. For Washington, Turkey is an important member of Nato and a neighbour of Syria. It is a traditional ally of the US and has played a vital role in absorbing millions of Syrian refugees.

    No doubt Turkey would welcome it, as its economy was left reeling this summer as its relationship with Washington hit a low point, sending the lira into a death spiral, but the fact remains that it’s also a NATO ally which did more than any other to create that very refugee crisis in the first place.

    Source: Getty Images

    Turkey has indeed played a “vital role” in the crisis, as FT suggests, but more in the way of being both “arsonist” and “firefighter” as during most of the seven year long Syrian proxy war it used its border as the largest “jihadi highway” in modern history, facilitating the movement of al-Qaeda and ISIS terrorists into Syria to fight the Assad government.

    And of course, the United States was a key partner in this — as Joe Biden all but spelled out while speaking at Harvard in 2015 — when he blamed “US allies” including Turkey for the rise of the Islamic State. This is likely the reason why the White House has never fully and adequately called President Erdogan to account as a state sponsor of terror — simply put, each side probably has too much dirt on the other

    For the FT editorial board and the rest of the MSM, these established facts have long been ignored and swept aside, even though now fully acknowledged even within establishment academia

    But if Washington gets a “close regional ally” in a Middle East region where its regime change and imperialist ambitions have not changed, the Turks themselves also get an “insurance policy” by healing ties with the US. FT continues:

    For the Turks themselves, a close relationship with America is an important strategic insurance policy in a volatile region. But the attempted coup in Turkey in 2016 set off a train of events that threatened the US-Turkish alliance. The government of President Recep Tayyip Erdogan blamed the coup attempt on the followers of Fethullah Gulen, a Turkish religious leader based in the US. The mass arrests that followed the coup attempt swept up Mr Brunson, who was detained for two years. 

    “Insurance policy” is quite possibly the only accurate and fitting image FT offers in its op-ed: the two sides “need each other” in the way co-conspirators in a crime need each other to keep quiet, with the unspoken ability of each of further blackmail the other. 

    The release of Mr Brunson does not resolve all the issues between Washington and Ankara.

    The Erdogan administration remains furious about US support for Kurdish fighters in Syria, who the Turks insist are allies of Kurdish terrorists inside Turkey.

    The Americans are unsettled by Mr Erdogan’s wooing of President Vladimir Putin, and angered by his decision to buy a Russian air-defence system. That decision is seen by Washington as incompatible with Nato membership; it could trigger further economic sanctions against Turkey.

    Turkish companies could also be subjected to American secondary sanctions, when the US tightens its economic isolation of Iran, next month. Meanwhile Mr Erdogan’s increasingly autocratic behaviour at home — involving mass purges of the civil service and arrests of journalists — has drawn unfavourable attention in the US.

    This is a formidable list of problems.

    Overcoming all of them may not be possible. But there are some grounds for hope.

    The release of Mr Brunson ends an injustice that weighed heavily with evangelical voters in the US.

    The Syrian war may finally be coming to a close, which could make US support for the Kurdish rebels less of an issue. The threat of a crisis in US-Saudi relations should give the Trump administration an incentive to shore up ties with Turkey — another important regional power. The Erdogan government, meanwhile, is having to deal with a looming debt crisis. It needs goodwill in Washington.

    However, if the US and Turkey are to rebuild their relationship, both sides will need to show restraint.

    Ideally, the Turkish government should rethink its decision to buy Russian weaponry. Even if Turkey persists, the Trump administration should try to avoid a new round of economic sanctions. The Erdogan government, for its part, would do well to adopt a more understanding attitude to American aid for the Kurds in Syria, particularly if the US continues to provide intelligence co-operation on the terrorism threats facing Turkey. This kind of restraint will not be easy for either Mr Erdogan or Mr Trump — they are volatile and emotional leaders.

    But in the interests of both their nations, it is time for some pragmatism and careful diplomacy.

  • How America Can Repair Its Damaged Relationship With Russia

    Authored by Nikolas Gvosdev via The National Interest,

    There is a way to break the dysfunctional cycle that hinders Moscow’s relationship with the West…

    George Beebe’s recent analysis has presented the policy community with a very useful paradigm for understanding recent alleged actions taken by the Russian special services in a number of Western countries: the Skripal Rorshchach test .

    Beebe is referring specifically to the attempted murder of former Russian double agent Sergei Skripal on British soil by use of a Soviet-developed nerve agent that sickened him and his daughter and killed several British citizens – amidst growing evidence of the involvement of officers of Russian military intelligence (the GRU). That case can be broadened to encompass a series of computer hacking/information warfare operations that were uncovered in the last several weeks in the UK, the United States, Canada and the Netherlands, which also have been attributed to the GRU. Now the discussion revolves around whether those who have been accused of taking action were doing so in contravention of or in support of the instructions of the Russian state.

    In every case, as Beebe points out:

    “The debate over the . . . evidence pivots on what one is inclined to believe about how Russia’s political system works and what Moscow aims to do in the world.”

    I would add a corollary to Beebe’s test:

    the debate also hinges on the view the government evaluating the evidence has on the desirability of engagement or disengagement with Russia.

    And, as recent European Union conclaves attempting to forge a coherent policy towards Russia – or the whipsawing in the United States itself between a Trump administration open to dialogue with Russia and a Congress determined to bring maximum pressure on Vladimir Putin’s government – make clear is how locked into pre-existing positions Western approaches to Russia remain.

    Arguably since 2007 and Vladimir Putin’s bombshell remarks at the Munich Security Forum, the West has been put on notice that Russia would seek to revise the parameters of the post–Cold War settlement, particularly in Europe and in Eurasia. It would seek to do so cooperatively wherever possible, but by use of both conventional and nonconventional force whenever necessary. Thus, Moscow has been prepared to engage both in conciliatory and hostile behavior with Western countries, sometimes even simultaneously, in pursuing its objectives.

    While this approach has not always been successful – with some spectacular miscalculations (such as the fallout from the Russian efforts to interfere with the 2016 U.S. elections) – it has nonetheless given the Kremlin the hallmarks of an overall grand strategy. In revealing remarks at the Moscow Energy Week press conference, Putin quipped that “special services mess with each other all the time” while at the same time calling for improved relations with the West.

    The West, on the other hand, approaches its relations with Russia through the prism of what Moscow “should” do rather than what it actually “is” doing. For some countries like Italy, Hungary, Austria, and to a lesser extent Germany and France, Russia “should” be a partner to Europe. Thus, these governments prefer to focus on areas of cooperation with Moscow and thus to minimize cases where Russia’s behavior is far less than constructive. For others – the United States most notably, Russia “should” conduct its domestic and foreign affairs in line with Western values, norms and preferences. When Russia deviates from such standards, the first instinct is to correct and punish. The current intra-Atlantic divergences (both within and between the countries of the West) on policy towards Russia stem from this basic divide – between those who see Russian transgressions as a distraction from Russia’s overall integration with the West versus those who see them as intrinsic to Russian statecraft and policy. So when the GRU is accused of hacking operations, one side is prepared to minimize the seriousness of the charges while the other is prepared to throw away all of the positives of the relationship in order to avenge. Swinging back and forth between these two binary choices does not lead to effective policy.

    For the past year, the dialogue for a “Sustainable Bipartisan U.S. Strategy Towards Russia” (informally known as the Mayflower Group) has been grappling with this very dilemma.

    On the one hand, Russia’s size, geopolitical position and military capabilities mean that the United States does not have the luxury of selective engagement and punishment, enacting penalties against Moscow that carry no costs or risks for the United States.

    At the same time, the need to sustain strategic stability in the relationship with another major nuclear power does not mean that the United States must meekly submit to all of Russia’s demands.

    The discussions have produced the outlines of what might be termed a 3-C paradigm: cooperate, compete and confront. In other words, the United States – and by extension the West – must be able to shift along the 3-C scale, safeguarding cooperation, for instance, in those areas that are vital to both countries (e.g. nuclear non-proliferation) while creating ground rules for areas where the two countries will compete (for instance, in energy sales around the world). Most importantly, the United States must be prepared to confront Russia – but to do so with a clear understanding of the costs and consequences. One of the things that has been quite frustrating in observing the back-and-forth in the U.S. Senate during the August hearings is the insistence on maximum confrontation with Russia in both military and financial terms – but with guarantees that there will be no negative blowback or consequences for the United States. This limitation – frankly admitted by the Obama administration in guiding how it imposed penalties on Moscow – weakens the deterrent impact and has contributed to a feeling in the Kremlin that penalties imposed by the West are survivable.

    The problem is that the Russian state takes the West’s protests less seriously than it should—and assumes that continuation of hostile action (such as hacking or poisonings) can continue with manageable consequences. In turn, Russia’s behavior inflames Western politicians who begin to contemplate much more stringent penalties or are prepared to sacrifice even areas of beneficial cooperation in order to punish the Kremlin. This begins to move us into lose-lose territory.

    A 3-C approach, guided by a sober assessment of costs and consequences, has the possibility of breaking this dysfunctional cycle. It assumes that enmity between Russia and the West is not inevitable but avoids a partnership at all costs approach. It provides a way to take advantage of openings to improve the relationship but to stand firm against Russian challenges to U.S. interests and values. Yet, at this point, the United States does not appear ready to develop this approach. It requires a degree of flexibility—to be able to impose or lift sanctions—that the Congress is unwilling to grant the president. It also requires an ability to think through priorities—not every Russian transgression or disagreement with Washington merits an all-out response.

    Perhaps the midterm elections will stabilize the American political system and lead to a modus vivendi between the president and Congress for the next two years, in which a more sustainable approach to Russia can take root. If not, then the dysfunction that has been observed for the last several years will deepen.

  • World's "Worst Famine In 100 Years" Will Hit Yemen, U.N. Warns

    For a Saudi and Mohammed bin Salman (MbS) update that’s not directly related to the murder of journalist Jamal Khashoggi, a United Nations official on Sunday warned Yemen is now facing what could be “the worst famine in the world in 100 years” which is set to put “12-13 million innocent civilians at risk of starving,” according to the BBC

    Yemen’s war, which has involved intense Saudi-UAE-US coordinated airstrikes on civilian population centers going back to 2015 has been popularly dubbed “the forgotten war” due to its general absence from headlines and front page stories over the years.

    As a few analysts and war reporters have pointed out in recent days, it took the murder of one Washington Post contributor who was one of the mainstream media’s own — for MbS to actually face any level of scrutiny, and yet the tens of thousands killed under Saudi coalition bombs is still largely taboo for the same mainstream to touch. 

    Saudi-led coalition airstrike on an arms depot in Sanaa in 2015. Image source: AFP

    A top United Nations official who monitors Yemen, Lise Grande, told the BBC: “We predict that we could be looking at 12 to 13 million innocent civilians who are at risk of dying from the lack of food.”

    She explained, “I think many of us felt as we went into the 21st century that is was unthinkable that we could see a famine like saw in Ethiopia, that we saw in Bengal, that we saw in parts of the Soviet Union, that was just unacceptable. Many of us had the confidence that that would never happen again and yet the reality is that in Yemen that is precisely what we are looking at.”

    The U.N.’s Humanitarian Coordinator for Yemen further condemned a Saudi coalition airstrike on Sunday that killed at least 15 civilians near the port city of Hodeida. Grande said, “The United Nations agencies working in Yemen unequivocally condemn the attack on civilians and extend our deepest condolences to the families of the victims.”

    Image via AFP

    The attack reportedly occurred on what’s being described as a transport minibus in what is the third major air strike on a civilian bus since August

    Pro-Houthi rebel media said that five members of the same family were killed in the vehicle, and added that a number of the casualties were women and children. 

    Meanwhile a prominent humanitarian group working in the region, The Norwegian Refugee Council, has called such attacks tragically “routine” in a statement: “Attacks that kill and maim civilians are no longer an anomaly in Yemen’s war,” the group said. “The drumbeat of assaults on men, women and children is one that has become appallingly routine,” it added.

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

    Estimates have put the civilian death toll in the war anywhere ranging from 10,000 to as high as 70,000 — a number difficult to come by as the Saudi coalition has blockaded the countries main humanitarian aid entry port of Hodeida. The U.N. most recent numbers puts the number of displaced at approaching 500,000 people. 

    As what the U.N. is now calling the “world’s worst famine in 100 years” is set to make Yemenis’ misery even worse, we wonder if the mainstream will actually give it coverage for a change. But we won’t hold our breath as this humanitarian disaster can’t be blamed on Putin or Assad. 

  • The Khashoggi Extortion Fiasco

    Authored by Ghassan and Itbah Kadi via The Saker Blog,

    A mystifying diplomatic escalation ensued following the disappearance of Saudi Washington Post columnist, Jamal Khashoggi, after visiting the Saudi Consulate in Istanbul, Turkey.

    Why would the United States of America make such a fuss over the disappearance of a non-American citizen? Why would America turn a blind eye to the Saudi killing of thousands of Yemeni civilians and the starving of millions others and then make “threats” against Saudi Arabia after one single Saudi journalist disappeared and has presumably been murdered by Saudi authorities?

    And since when did Erdogan worry about human rights? After all, this is the same man whose army has committed countless atrocities against Syria and Turkish Kurds.

    And the repercussions did not stop at the official level. Even Western business leaders are cancelling trade deals with Saudi Arabia and asking its government for explanations.

    Let us not forget that America does not only ignore the war on Yemen, but it also assists the Saudis and supplies them with arms and intelligence. What’s behind the sudden U-turn? Why would the President of the United States of America be personally involved in this?

    Furthermore, Saudi Arabia has a long history of persecuting dissidents and suppressing any opposition. So once again, why was Khashoggi singled out in this instance to become such a person of interest to the USA? His status as a journalist and columnist for Washington Post certainly does not answer this question.

    And back to Erdogan, the man who reached the cliff-edge with America on a number of strategic and trade issues, why would he be concerned about the “murder” of a foreign journalist allegedly at the hand of his own government? According to the story, the “murder” was committed at the Saudi Consulate, and technically, Turkey has no jurisdiction within this diplomatic precinct albeit it is within Turkey.

    The story has been elevated to the level of news headlines even in news breaks. This statement is not meant to either vindicate Saudi Arabia or to justify forfeiting the blood of Mr. Khashoggi, but when the West acts at this level of hypocrisy, something has to be amiss, and the question is what is it?

    If we rewind the clock and take into account the timeline of events, this is what we find:

    2nd of October 2018. Khashoggi walks into the Saudi Consulate in Istanbul. Unless tampered with, the date is confirmed on the CCTV video presented in this link:

    3rd of October, President Trump, unprovoked, said that Saudi Arabia would not survive for two weeks on its own without American protection and demanded that Saudi Arabia should pay for that protection.

    5th of October. Crown Prince Mohamed Bin Salman was quick to respond. In his interview with Bloomberg the Crown Prince reiterated that Saudi Arabia has been around since 1744, 30 years before the United States came to existence. The date of 1744 is in reference to the smaller Emirate of Diriyah which was established by Mohamed bin Saud before the King Abdul Aziz expanded his territory to the current borders. In referring to this date, the Prince was saying that Saudi Arabia stood on its own feet before any alliance with America, but he is conveniently ignoring the fact that before any petrol was discovered, external threats were not an issue. In his interview, he later on referred to the Saudi ability to withstand the Obama years, claiming the Obama administration worked against Saudi interests. Though he did not name Syria, he was undoubtedly referring to Syria among other things.

    From that day onwards, the sequence of events escalated quite rapidly. As I write this, President Trump is talking about taking severe measures against Saudi Arabia, but not severe enough to cancel the USD 110 Bn arms deal. The mention of the arms deal could well be a hint made by Trump in order to remind the Saudis how reliant they are on America. After all, Saudi Arabia is bogged down in a war with Yemen that it is unable to win even with America support.

    Is it by coincidence that in the middle of this kerfuffle Turkey suddenly decided to release American Pastor Andrew Brunson after more than two years of house arrest?

    Not really; not if we connect the dots.

    One logical explanation of the recent series of events lies in the fact that they carry the hallmarks of extortion. As a matter of fact, Trump’s mention of the inability of Saudi Arabia to survive for more than two weeks without American protection is in itself a prelude for extortion. This is the same logic and language used by Mafia bosses with shop owners.

    President Trump runs America like a corporation. To him, it’s all about money. Given America’s dire economic position, he will not leave a single stone unturned if it is concealing a single dollar.

    Dr. Skidmore from Michigan University argues that USD 21 Tn has gone missing from the coffers of the Ministries of Defense and Housing alone in the years between 1998 and 2015. He speculates that Trump did not know about this when he became president. Revelations of this kind and magnitude make Trump’s task to fix the economy even more out of reach:

    The current situation is reminiscent of an article I wrote back in 2012.  From this article I quote the following:

    The USA is always accused of keeping its hands on the oil resources of the Middle East. For fairness, by-and-large, it is “only” controlling its flow, but still paying for it; albeit in printed money.

    A bankrupt, desperate and oil-thirsty USA may feel compelled to threaten oil-rich countries with air-strikes and even nuclear attacks…..

    ….In an escalated situation, at stage two, an isolated oil-thirsty USA may become tempted to literally steal this oil. The USA may start with easy, close targets such as Venezuela. A desperate USA with a radical President in the Whitehouse will possibly be tempted to take over by force the oil fields of such soft targets. This can be the beginning of a long path of piracy.

    How far can this path be pursued is anyone’s guess. The next target can be a puppet state like Qatar, even Saudi Arabia itself.

    In such a desperate stage, the USA can only rely on its nuclear supremacy in order for it to be able to force its way. It will not have the financial resources to put boots on the ground, and any ensuing internal strife potentially caused by financial woes will add to the expense and risks of this exercise.”

    Even though those words were written only six years ago, a lot has changed in the global balance of power since then and the world is no longer unipolar. With fracking, America is also now less reliant on Saudi oil, but is in desperate need for Saudi money. The diminishing American military power on one hand, and the military rise of Russia and China on the other hand, are forcing America to explore other pursuits. This is why the Trump administration is into the trade sanction mode. But sanctions alone are not enough, and America is likely to be using the Khashoggi story as a pretext to extort protection money from the Saudis; pay up or we will turn the whole world against you.

    The Saudis don’t deserve any sympathy at all. They have literally been getting away with murder for decades under the watchful eye of their American big brother and ally. The near future will put the extortion theory to the test. If the Americans and Saudis strike a money-for-protection deal followed by an easing of the anti-Saudi rhetoric, then we will know the theory is accurate and that they are both back in business. They may strike a face-saving deal in which the Saudis do not look like they have succumbed to pressure, thereby paying America in ways that do not carry the label of protection money. But, in any manner in which moneys are paid by the Saudis, they are extortion funds and nothing short of piracy.

    So how does Turkey fit into this picture?

    Turkey’s economy has suffered greatly after the recent American sanctions and the Turkish Lira went into a nosedive.  The impasse between the two NATO allies is multi-faceted and includes opposing views on dealing with very sensitive issues such the Kurdish question, ISIS, Russian presence in Syria, Iran, as well as Turkey’s regional ambition for a resurrected pan-Muslim leadership.

    Now, Turkey is not only at odds with America and American policies, but also sees Saudi Arabia as an obstacle that stands in the way of its Muslim leadership aspirations. Turkey sees Saudi Arabia as the Wahhabi rival to the Muslim Brotherhood faction to which Erdogan belongs. So, when the Khashoggi story surfaced, Turkey and America found common interest in being anti-Saudi; albeit for different reasons. To capitalize on the events, Turkey offered a sweetener to the Americans, releasing the American Pastor, Andrew Brunson, making it look like a legal court decision. Turkey expects the world to believe that on such sensitive international legal matters decisions can be made without the approval and directives of Erdogan himself. In the world of politics, pigs do fly.

    Both Erdogan and Trump claim there was no deal behind the release of the Pastor, and perhaps there wasn’t but, the Khashoggi incident gave Erdogan an opportunity to take a step towards some type of conciliation with America. But even in the absence of a deal, Erdogan will expect his reward; the least of which would be the lifting of the American trade sanctions. That said, the restoration of the American-Turkish that preceded the war on Syria will have to wait; if that is at all achievable. After all, Turkey has established strong links with Russia and has bought the S-400 ground-to-air state-of-the-art missile systems. But Erdogan hedges his bets on the principle of keeping a foot in each door.

    The interesting question to ask here is the following; if this whole drama is indeed a false flag for an extortion process, how is it that Trump is receiving the full support of the American media, his “sworn” enemies, the organizations he calls “fake news”? Is the story too hot for them to resist? Are they a part of the extortion process or, are they totally stupid enough to go with the flow? Alternatively, is the Deep State behind Trump on this one and instructing the media to do the same?

    Ironically, the bipartisan American Senate Foreign Relations Committee, headed by Senator Corker, has sent a letter to Trump asking him to investigate the disappearance of Khashoggi and report back to the committee within 120 days.  Does this mean that the Democrats are behind Trump in his anti-Saudi push? They seem to be.

    It seems that American lawmakers, media, and the Deep State are all united against Saudi Arabia until it relents and pays up. How Saudi Arabia will manage to weasel out of this trap, if it can, remains to be seen.

    America does not have to cancel the USD 110 Bn arms deal with Saudi Arabia. All it has to do is delay deliveries. Ironically, as if the recent developments are not worrying enough for the Saudis, on the 8th of October, the Yemeni Army has made advances into the Saudi territory and any disruption to the flow of American arms to the Saudis can have serious consequences on that seemingly unwinnable war.

    Any whichever way, Saudi Arabia has definitely chosen the wrong time to move on Khashoggi, if it did. After all, we don’t really know what happened to him, and we cannot even zero out the possibility that he was kidnapped or killed by other operatives including Americans and Turkish. The media are busy focusing on their alleged attempts to find out what happened to Mr. Khashoggi, how he was killed, what torture was he subjected to, how was his body removed from the consulate etc. We will probably never find out the truth about what happened to him, but what is perhaps more pertinent and conceivable is to establish who benefits from the fall-out and how.

    America, and the West in general, never really liked Saudi Arabia. At best, the West tolerated the ultra-conservative undemocratic suppressive kingdom of sand that exported fundamentalism and terror, but this can all change with a stroke of a pen and Saudi Arabia may soon find itself in need of protection from its protector.

     

  • Is The NYC Luxury Real-Estate Market On The Verge Of A Full-Blown Collapse?

    After New York City developers ignored affordable housing for years in favor of the fatter profit margins on luxury development (spurred on by what looked to be an extremely durable post-crisis recovery), the chickens are finally coming home to roost, as the Financial Times explains, what appeared to be an uncomfortable pullback in sales prices for luxury homes – spurred by a retraction in bids at a time of expanding supply – is now poised to metastasize into a full-blown market rout with implications beyond New York City.

    Inventory

    To wit, the number of unsold homes in Manhattan has plunged by 40% through September compared with the first nine months of 2017. This translated into a median sales-price decline of 9%. And while the slowdown has already spread from Manhattan’s luxury market throughout the rest of the island, some brokers believe NYC is the canary in the coalmine warning of a broader housing-market pullback after nearly a decade of untrammeled growth.

    “We’re in the middle of a US housing slowdown, with Manhattan’s prime market the first and most sensitive to react,”says Jonathan Miller of Miller Samuel, a local property appraiser.

    Still, the overabundance of unsold homes is most acute in the luxury market, where the ratio of sold to unsold homes has exploded over the past year, as the FT points out. And what’s worse, these figures don’t incorporate what brokers call “shadow inventory” – unsold homes that are being kept off the market by anxious brokers fearful of provoking a panic.

    Here’s a helpful breakdown of sales data detailing the slowdown in the NYC housing market:

    • During the third quarter of this year the average Manhattan home took 137 days to sell. Some 42 per cent of homes priced above $10m were on the market for more than 180 days
    • Homes priced above $3m comprised 30 per cent of inventory and 15 per cent of sales in the third quarter of 2018
    • Currently, the sales tax (including state and city tax and state mansion tax) for a new $2.5m home in Manhattan is 2.8 per cent

    The stock of unsold luxury homes has been piling up. For properties priced above $3 million, the ratio of homes sold to those currently for sale in Manhattan has gone from 1:3 to 1:6 in a year, according to Stribling. For homes priced above $10m, the ratio is 1:10. Though one broker at Stribling said the real figure could be closer to 1:15, given that developers are probably low-balling their figures, anxious about sending the market even lower.

    This has led to a buildup in “shadow inventory” as one broker called it.

    “They are holding back homes that they would otherwise be actively marketing, and which would therefore show up in inventory figures,” he says. Inventory figures are being “significantly manipulated” by the practice of excluding this so-called shadow inventory, according to Miller.

    In the most rarefied stratum of the market – homes worth $10 million or more – prices have fallen by roughly 30% since the peak in 2014.

    “In the market north of $10m, you’re seeing prices off anywhere from 10 to 30 per cent from the peak in 2014,” says Miller. In the third quarter of this year, the average home sold above $10m went for 13 per cent less than its asking price, the biggest discount of any price bracket tracked by Stribling. 

    Prices are being squeezed as a chasm opens up between bids and asks. Total inventory is set to expand from 6,300 in 2017 to 7,900 in 2019, even as the number of apartments sold is expected to drop from 1,900 to 1,800.

    Much to the chagrin of high-end developers, the poster children for the dearth of sales in the Manhattan housing market are the members of “Billionaires Row”. During New York City’s post-crisis property boom, many developers focused on luxury housing, which typically can be sold at a higher premium, yielding fatter profits, at the expense of affordable housing. The result has been a glut at the high end of the market, while the average renter is struggling with housing costs at or near all-time highs.

    Housing

    (Courtesy of the FT)

    And with 22 more luxury towers set to hit the market between now and 2020 (including the Central Park Tower, which will become the second-tallest building in the US) prices are poised for an even larger drop.

    In the past three years, nine new residential skyscrapers (many include commercial tenants, too) taller than 200m were built in Manhattan, according to the Council on Tall Buildings and Urban Habitat. Between the beginning of this year and the end of 2020, 22 more are set to join them, providing another 1,412 floors to a total height of 3.6 miles.

    These will include Central Park Tower – which will become the US’s second tallest building, reaching up 472m, when it is completed in 2020 – and 111 West 57th Street, will reach to 435m when completed next year.

    Beyond 2020, the crush of unsold inventory could create a vicious cycle as developers are forced to put more inventory on the market as their conviction that this drop in prices was merely a blip begins to fade.

    “Many of these were held back in 2015 when the market started to turn when there was a belief that this was a blip. Now that these firms’ lenders can’t wait any longer, so many of the homes that are likely to come online through 2018 and 2019 will be the larger, high-value units.”

    One factor driving the housing glut in NYC is the Republican tax reform law that went into effect earlier this year. Its cap on itemized deductions related to state and local taxes (including NYC’s not-inconsiderable property tax rate) has made it more economical to rent instead of buy. Ironically for NYC real-estate developers (a group that includes President Trump), this tax law couldn’t have come at a worse time. Property taxes on new developments are particularly high, with one broker estimating that buyers of a $3 million condo will pay $44,000 a year in property taxes to the city, not including other unrelated taxes.

    Housing

    And among the apartments for which brokers do manage to find a buyer, many of them are turning around and putting the unit up for rent within six months. According to Street Easy, a total of 1,313 recently sold apartments were listed for rental within six months, the highest number since the firm started collecting data twelve years ago. This increase in housing supply can effectively negate the sale’s impact on the broader market, since potential buyers may choose to rent instead.

    Housing

    Undeterred, developers are adopting a smorgasbord of tactics, from moving up commission payments to incentivize brokers, to offering to shoulder some of the tax burden incurred by buyers.

    Nonetheless, developers are trying a range of tactics to avoid cutting prices. To incentivise brokers, they are shifting commission payments forward from the date on which a sale is closed to the date on which it is agreed, which may be two years earlier, says Derderian.

    Buyers are being lured with offers to pay transfer taxes, covering mansion tax – an additional 1 per cent sales tax on homes costing more than $1m – free parking spots (which currently set you back $750,000 at the soon-to-be completed residential tower at 220 Central Park South), interior upgrades or cash back to spend on the apartment.

    The advantage for developers of such perks is that they limit the price cuts, flattering the state of the market with the official price figures, Derderian says.

    When it was launched, buyers of homes in Beekman Residences in Downtown were being offered a $10,000 gift card to spend at the hotel in the same building. If the market’s current trajectory continues, that may not cover the bar tab to drown their sorrows.

    But these tactics can only work for so long. Eventually, sellers will need to reckon with what has become a fundamental imbalance in the NYC housing market. And the irony is, renters, who have fewer affordable options than ever before, won’t find much relief amid the dropoff in development that will almost certainly ensue.

  • Mish: Warning! Civilization At Risk, Crisis By 2040, And Other Nonsensical Climate BS

    Authored by Mike Shedlock via MishTalk,

    The amount of climate scaremongering in the past few weeks is stunning. And it’s all pure bullshit.

    Check out these headlines.

    Wall Street Journal: U.N. Panel Warns Drastic Action Needed to Stave Off Climate Change

    New York Times: Major Climate Report Describes a Strong Risk of Crisis as Early as 2040

    The Intercept: FOSSIL FUELS ARE A THREAT TO CIVILIZATION, NEW U.N. REPORT CONCLUDES

    Earther: We Have a Decade to Prevent a Total Climate Disaster

    MarketWatch: Drastic action needed to prevent climate catastrophe, U.N. panel warns

    Daily Caller: AL GORE: ‘WE’RE RUNNING OUT OF TIME’ ON GLOBAL WARMING

    Q&A

    Q.What do all of those headline have in common?

    A. They are all based on the same study. The study is riddled with huge numbers of blatant errors making the study for lack of better words, pure bullshit.

    Riddled With Errors

    Watts Up With That reports BOMBSHELL: audit of global warming data finds it riddled with errors

    • Almost no quality control checks have been done: outliers that are obvious mistakes have not been corrected – one town in Columbia spent three months in 1978 at an average daily temperature of over 80 degrees C. One town in Romania stepped out from summer in 1953 straight into a month of Spring at minus 46°C. These are supposedly “average” temperatures for a full month at a time. St Kitts, a Caribbean island, was recorded at 0°C for a whole month, and twice!

    • Sea surface temperatures represent 70% of the Earth’s surface, but some measurements come from ships which are logged at locations 100km inland. Others are in harbors which are hardly representative of the open ocean.

    • The dataset starts in 1850 but for just over two years at the start of the record the only land-based data for the entire Southern Hemisphere came from a single observation station in Indonesia. At the end of five years just three stations reported data in that hemisphere. Global averages are calculated from the averages for each of the two hemispheres, so these few stations have a large influence on what’s supposedly “global”.

    • According to the method of calculating coverage for the dataset, 50% global coverage wasn’t reached until 1906 and 50% of the Southern Hemisphere wasn’t reached until about 1950.

    • In May 1861 global coverage was a mere 12% – that’s less than one-eighth. In much of the 1860s and 1870s most of the supposedly global coverage was from Europe and its trade sea routes and ports, covering only about 13% of the Earth’s surface. To calculate averages from this data and refer to them as “global averages” is stretching credulity.

    • When a thermometer is relocated to a new site, the adjustment assumes that the old site was always built up and “heated” by concrete and buildings. In reality, the artificial warming probably crept in slowly. By correcting for buildings that likely didn’t exist in 1880, old records are artificially cooled. Adjustments for a few site changes can create a whole century of artificial warming trends.

    • Data prior to 1950 suffers from poor coverage and very likely multiple incorrect adjustments of station data. Data since that year has better coverage but still has the problem of data adjustments and a host of other issues mentioned in the audit.

    • Another implication is that the proposal that the Paris Climate Agreement adopt 1850-1899 averages as “indicative” of pre-industrial temperatures is fatally flawed. During that period global coverage is low – it averages 30% across that time – and many land-based temperatures are very likely to be excessively adjusted and therefore incorrect.

    Complex Systems Reduced to Single Variable

    Also consider Watts Up With That Weekly Climate and Energy News Roundup 331.

    A participant in the IPCC, who resigned, atmospheric physicist Richard Lindzen was Alfred P. Sloan Professor of Meteorology at MIT. He is noted for his work in dynamic meteorology, atmospheric tides, ozone photochemistry, quasi-biennial oscillation, and the Iris hypothesis. Lindzen is certainly qualified to talk about the physics of the atmosphere, where the greenhouse effect occurs. Several key points of the talk are summarized below.

    • “Nature has numerous examples of autonomous variability, including the approximately 11-year sunspot cycle and the reversals of the Earth’s magnetic field every couple of hundred thousand years or so. In this respect, the climate system is no different from other natural systems.

    • “Now here is the currently popular narrative concerning this system. The climate, a complex multifactor system, can be summarized in just one variable, the globally averaged temperature change, and is primarily controlled by the 1-2% perturbation in the energy budget due to a single variable – carbon dioxide – among many variables of comparable importance.

    • “This is an extraordinary pair of claims based on reasoning that borders on magical thinking. It is, however, the narrative that has been widely accepted, even among many sceptics.

    • “Many politicians and learned societies go even further: They endorse carbon dioxide as the controlling variable. And although mankind’s CO2 contributions are small — compared to the much larger but uncertain natural exchanges with both the oceans and the biosphere — they are confident that they know precisely what policies to implement in order to control CO2 levels.”

    • Sea level has been increasing by about 8 inches per century for hundreds of years, and we have clearly been able to deal with it. In order to promote fear, however, those models that predict much larger increases are invoked. As a practical matter, it has long been known that at most coastal locations, changes in sea level, as measured by tide gauges, are primarily due to changes in land level associated with both tectonics and land use.

    • The small change in global mean temperature (actually the change in temperature increase) is much smaller than what the computer models used by the IPCC have predicted. Even if all this change were due to man, it would be most consistent with low sensitivity to added carbon dioxide, and the IPCC only claims that most (not all) of the warming over the past 60 years is due to man’s activities. Thus, the issue of man-made climate change does not appear to be a serious problem. However, this hardly stops ignorant politicians from declaring that the IPCC’s claim of attribution is tantamount to unambiguous proof of coming disaster

    • Cherry picking is always an issue. Thus, there has been a recent claim that Greenland ice discharge has increased, and that warming will make it worse. Omitted from the report is the finding by both NOAA and the Danish Meteorological Institute that the ice mass of Greenland has actually been increasing. In fact both these observations can be true, and, indeed, ice build-up pushes peripheral ice into the sea.

    • Misrepresentation, exaggeration, cherry picking, or outright lying pretty much covers all the so-called evidence.

    Lindzen’s entire speech is much needed and worth reading. Simply because the IPCC names its process as science, does not make it science.

  • Tether Tumbles Below Critical $1 Threshold As Dollar-Pegged Crypto Doubts Soar

    Update: Careful to quickly assuage any potential loss of the narrative and ‘full faith and credit’ of the ‘stablecoin’, Tether released a statement on USDT drop:

    “We would like to reiterate that although markets have shown temporary fluctuations in price, all USDT in circulation are sufficiently backed by U.S. dollars (USD) and that assets have always exceeded liabilities.”

    See, nothing to panic about.

    *  *  *

    The only cryptocurrency not rallying right now is the one pegged to the U.S. dollar.

    The week started off green for cryptocurrencies like Bitcoin, Ripple, and Ethereum. Collectively, the three of them rose by about 7% according to a CNBC article out early Monday morning. Bitcoin came close to topping $7,000 again, but digital currencies remain in the midst of a longer-term downtrend that has continued over the last year.

    This downtrend among all cryptos was exacerbated by the sharp moves lower in equity markets last week, which prompted billions of dollars of digital currency market cap to be wiped away. But Monday kicked off a new week and cryptos are all trying to bounce or pare their losses from last week (for now, at least).

    Interestingly enough, the only crypto not participating in the early week rally is Tether, a digital currency that is pegged to the US dollar. Tether was trading 2.5% lower, down to $0.965, after falling much lower earlier in the morning. 

    This chart of the carnage, as it happened on the Kraken exchange, was posted at about 2AM EST on Monday morning by Twitter user @Bitfinexed. It shows Tether printing as low as $0.85:

    The firm that runs the digital currency, Tether, Ltd., has recently been questioned about whether or not it holds enough “reserves” to match the amount of tokens in circulation. The company claims that it does.

    Charles Hayter, the chief executive of comparison site CryptoCompare, told CNBC: “There is concern about Tether and whether it is truly backed by dollars and rumors about USDT (tether) being delisted from various exchanges.”

    These delisting rumors probably aren’t helping quell volatility, either. This comes after one industry publication claims that Bitfinex, a cryptocurrency exchange connected to Tether, has suspended deposits in US Dollars, Euros, Sterling and Yen.

    Mati Greenspan, senior market analyst at eToro, told CNBC: “If the perception that tether can hold a stable value is called into question, traders who are holding USDT are most likely to shift their funds into other cryptos in order to hold their value.”

    The point of Tether isn’t necessarily to appreciate in value, but rather it is known as a “stablecoin” because it is supposed to, in theory, always trade around one dollar. The digital currency is seen as a way for those worried about the volatility of fiat-to-crypto exchange rates to ensure that they can reliably convert US dollars into digital currencies.

    From there, Tether can be used to purchase other digital currencies like Bitcoin and Ethereum.

    The question of whether or not Tether’s parent company holds enough in reserves is hardly the first controversy for the coin. We released a report days ago highlighting finance professor John Griffin, who, along with his doctoral student companion, Amin Shams, was one of the two academics that drew market-moving conclusions about bitcoin last year, while the digital currency was trading around $20,000. After sifting through 2 terabytes of trading data, they alleged that bitcoin was being manipulated by someone using Tether to purchase it.

    To us, Tether seems like a counterintuitive idea in the sense that it is backed by Fiat, which is the main problem that Bitcoin initially seeked to solve. Forgive us if we are not surprised when the only digital currency that tries to be more like the dollar instead of less like it, winds up being one of the firsts to collapse. 

  • Veritas Undercover Exposes MO Sen. McCaskill Hiding Liberal Agenda From Moderate Voters: "People Just Can't Know That"

    In the third undercover video filmed by Project Veritas  during the ongoing 2018 election season, Missouri Senator McCaskill’s considerably more liberal views – “essentially the same as [Obama’s]” – are exposed as she and her campaign staff conceals them in order to court moderate voters… and she needs them as her and her opponent are essentially tied:

    Via ProjectVeritasAction.com,

    Said James O’Keefe, founder and president of Project Veritas Action:

    “This undercover report shows just how broken our political system has become. Senator McCaskill hides her true views from voters because she knows they won’t like them.” 

    Senator McCaskill Talks Gun Bans on Tape

    Senator McCaskill revealed her intention to vote on various gun control measures in undercover footage:

    MCCASKILL: “Well if we elect enough Democrats we’ll get some gun safety stuff done. They won’t let us vote on it, we’ve got 60 votes for a number of measures that would help with gun safety, but McConnell won’t let ’em come to the floor.”

    JOURNALIST: “Like bump stocks, ARs and high capacity mags…?”

    MCCASKILL: “Universal background checks, all of that… But if we have the kind of year I think we might have I think we could actually be in a position to get votes on this stuff on the floor and we’d get 60 [votes]…”

    JOURNALIST: “So you would be on board with the bump stocks and… high capacity mags.”

    MCCASKILL: “Of course! Of course!”

    Despite her strong views on gun control, Senator McCaskill does not tend to promote them on the campaign trail or on her website. Rob Mills, who works on Senator McCaskill’s campaign, says that is “…because she has a bunch of Republican voters.”

    Another individual who works on Senator McCaskill campaign, Carson Pope, adds that “…a semi-automatic rifle ban is more so what she would support.”

    “People just can’t know that.”

    According to Mills, Senator McCaskill conceals her support of Moms Demand Action, a gun control group, and other similar organizations because they would “…hurt her ability to get elected.”

    MILLS: “But she doesn’t openly go out and support groups like ‘Mom’s Demand Action’ or just like other groups that are related to that. Because that could hurt, her ability to get elected. Because people like see that and they’re like well I don’t want to support her even though they stand for the same policies…”

    MILLS: “She’s worked out stuff with Mom’s Demand Action to make sure that she can support their goals without supporting the organization openly. And you know, Mom’s Demand Action does the exact same thing. Like a lot of our volunteers are actually from there. She’s really good about strategy and making sure she has a goal and can get there.”

    Nicolas Starost, another individual who works on Senator McCaskill’s campaign, explains how President Obama won’t campaign for Senator McCaskill in Missouri despite their similar views on politics. Starost says this is because Senator McCaskill needs to distance herself from the Democratic party to appeal to more voters:

    STAROST: “Because of how like, cause he’s a very liberal candidate. And like… Claire distancing herself from the party is gonna help her win more votes than it will saying like: “Oh here’s Obama, the former President of the United States, to now speak on my behalf.” Which is unfortunate because I love Obama to pieces, and I’d love to see him come here.”

    JOURNALIST: “And they essentially have the same views on everything?”

    STAROST: “Yeah. People just can’t know that.”

    Impeachment

    Another individual who works on Senator McCaskill’s campaign, Glen Winfrey, explains plans for the impeachment of President Trump:

    JOURNALIST: “So, here’s the real question, Claire holds off on impeachment to get the moderate. What do we tell the moderates when we drop the impeachment hammer afterward?”

    WINFREY: “Get over it. It was a national security question. That information was confidential, and she did her duty by not revealing the information until afterward.”

  • Obese Millennials Are "Threatening National Security," New Study Finds

    Once again, millennials are making a mess of things, and this time it could “threaten national security,” according to a new report which found that approximately 71% of millennials aged 17 to 24 – the prime age to enlist in America’s armed forces and fight a foreign war in the Middle East – are non-recruitable, with obesity disqualifying about 31% of them. 

    The Council for a Strong America, a nonprofit team of law enforcement leaders, retired admirals and generals, business executives, pastors, and prominent coaches and athletes who promote solutions that ensure America’s next-generation is “citizen-ready,” published the study on Wednesday, called “Unhealthy and Unprepared,” warns that America’s rising number of overweight millennials are going to have a significant impact on the military’s ability to win a future war. 

    “Out of all the reasons that we have future soldiers disqualify, the largest – 31% – is obesity,” Maj. Gen. Frank Muth, head of Army Recruiting Command, said Wednesday at AUSA’s annual meeting in Washington, D.C. 

    This year, the Army missed its recruiting goals for the first time since 2005, and the study warned: as the obesity epidemic grows, these recruiting challenges will continue unless immediate countermeasures are enacted to promote healthy lifestyles for youth. 

    The report offered several ideas on how to suppress the out of control obesity epidemic ravaging millennials. One solution is to focus on nutrition and physical activity from a young age, which can condition children to live healthier lifestyles to prepare for any career.

    Proper nutrition and physical activity are the building blocks of a stronger and healthier generation that will ultimately increase the military’s future recruiting goals before the next conflict with Russia and or China. The report said it starts with parents and educators that teach children about healthy eating and exercise habits, while state and federal officials must adopt public school programs that promote nutrition and encourage physical activity from an early age.

    Meanwhile, American exceptionalism is waning, and it’s not only due to fast food. The Army missed recruiting goals this year, which should serve as a warning: the US is ill-prepared to engage in a military conflict.

    The study concluded and said: “trends in obesity must be reversed before our national security is further comprised.” And while the report did offer some token solutions how to fix the obesity problem, the damage has already been done, and to reverse such a dramatic trend will take decades; the question is whether America’s next armed conflict will wait that long?

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Today’s News 15th October 2018

  • F-16 Jets Explode After Mechanic Fires Cannon From Another Parked Jet In Bizarre Accident

    An almost unbelievable accident occurred at a Belgian military air base days ago which involved one F-16 jet destroying two others — all while stationary on the ground. 

    Stunning photos of the aftermath show a completely destroyed Belgian Air Force F-16 fighter and another severely damaged one after a third fired its M61A1 Vulcan 20mm cannon across the flight line while parked. “You can’t help thinking of what a disaster this could have been,” base commander Col. Didier Polome told a Belgian television news station in the aftermath.

    The incident happened last Friday at Florennes Air Base in Southern Belgium during routine maintenance of the jet that fired, and reportedly involved the crew servicing an F-16 accidentally triggering the heavy aircraft cannon.

    Destroyed F-16 at Florennes Air Base in Belgium. Image source: Tony Delvita via The Aviationist

    The Aviationist reports the following of what is being described as a “bizarre accident“: 

    Multiple reports indicate that a mechanic servicing the parked aircraft accidentally fired the six-barreled 20mm Vulcan cannon at close range to two other parked F-16s. Photos show one F-16AM completely destroyed on the ground at Florennes. Two maintenance personnel were reported injured and treated at the scene in the bizarre accident.

    The aircraft being serviced had just been refuelled and had its six barrel cannon loaded as it was being prepped for an afternoon training mission. 

    The impact of the 20mm bullets on the other aircraft, which the crew said was just out of eyesight, caused the jet that was struck to explode instantly, according to reports. 

    Image via The Aviationist

    A report on the monitoring website F-16.net described that, “An F-16 (tail number FA-128) was completely destroyed while a second F-16 received collateral damage from the explosions. Two personnel were wounded and treated at the scene. Injuries sustained were mainly hearing related from the explosion.”

    Thick black smoke could be seen for miles around the area, to which scores of emergency personnel were immediately dispatched. 

    According to a defense analysis source, Belgium currently has 60 active F-16 aircraft, including 48 on duty for NATO.

    The Aviationist describes the exceedingly bizarre nature of the incident, which sounds like something one would see in an over the top Hollywood movie scene:

    The accident is quite weird: it’s not clear why the technician was working on an armed aircraft that close to the flight line. Not even the type of inspection or work has been unveiled. For sure it must have been a check that activated the gun even though the aircraft was on the ground: the use of the onboard weapons (including the gun) is usually blocked by a fail-safe switch when the aircraft has the gear down with the purpose of preventing similar accidents.

    But clearly there were no fail-safes that prevented this strange incident involving a hail of ground fire across a runway. 

    Scramble Magazine published the following photo showing how the aircraft are usually aligned, and delineated the angle of the cannon fire.

    Source: Scramble Magazine

    Belgium’s Ministry of Defense announced it has launched a formal investigation into the incident. The F-16 fighters cost around $20 million a piece — so the price tag for Friday’s accident is going to be quite steep. 

    To our knowledge the incident was not caught on film, or at least it hasn’t been released to the public. 

    However, to visualize how devastating the 20mm Vulcan cannon is, especially at close range, here’s some test footage of the ultra-rapid aircraft mounted machine gun at work:

  • NATO Coordinates Information War On Russia

    Via The Strategic Culture Foundation,

    The US, Britain and other NATO allies upped the ante this week with a coordinated campaign of information war to criminalize Russia. Moscow dismissed the wide-ranging claims as “spy mania”. But the implications amount to a grave assault recklessly escalating international tensions with Russia.

    The accusations that the Kremlin is running a global cyberattack operation are tantamount to accusing Russia of “acts of war”. That, in turn, is creating a pretext for NATO powers to carry out “defensive” actions on Moscow, including increased economic and diplomatic sanctions against Russia, as well as “counter” cyberattacks on Russian territory.

    This is a highly dangerous dynamic that could ultimately lead to military confrontation between nuclear-armed states.

    There are notably suspicious signs that the latest accusations against Russia are a coordinated effort to contrive false charges.

    First, there is the concerted nature of the claims. British state intelligence initiated the latest phase of information war by claiming that Russian military intelligence, GRU, was conducting cyberattacks on infrastructure and industries in various countries, costing national economies “millions of pounds” in damages.

    Then, within hours of the British claims, the United States and Canada, as well as NATO partners Australia and New Zealand followed up with similar highly publicized accusations against Russia. It is significant that those Anglophone countries, known as the “Five Eyes”, have a long history of intelligence collaboration going back to the Cold War years against the Soviet Union.

    The Netherlands, another NATO member, added to the “spy mania” by claiming it had expelled four members of Russian state intelligence earlier this year for allegedly trying to hack into the headquarters of the Organization for the Prohibition of Chemical Weapons (OPCW), based in The Hague.

    There then followed predictable condemnations of Russia from the NATO leadership and the European Union. NATO was holding a summit in Brussels this week. It is therefore plausible that the timing of the latest claims of Russian “malign activity” was meant to coordinate with the NATO summit.

    More sanctions against Moscow are expected – further intensifying tensions from already existing sanctions. More sinister were NATO warnings that the military alliance would take collective action over what it asserts are Russian cyberattacks.

    This is creating a “casus belli” situation whereby the 29 NATO members can invoke a common defense clause for punitive actions against Russia. Given the rampant nature of the claims of “Russian interference” and that certain NATO members are rabidly Russophobic, it is all too easily dangerous for cyber “false flags” to be mounted in order to criminalize Moscow.

    Another telltale factor is that the claims made this week by Britain and the other NATO partners are an attempt to integrate all previous claims of Russian “malign activity”.

    The alleged cyber hacking by Russia, it is claimed, was intended to disrupt OPCW investigations into the purported poison-assassination plot against Sergei Skripal, the former Russian spy living in Britain; the alleged hacking was also claimed to be aimed at disrupting investigations into alleged chemical weapons atrocities committed by the Syrian government and by extension Syria’s ally Russia; the alleged Russian hacking claims were also linked to charges of Olympic athletes doping, as well as “interference in US elections”; and even, it was asserted, Russia trying to sabotage investigations into the downing of the Malaysian civilian airliner over Ukraine in 2014.

    Up to now, it seems, all such wildly speculative anti-Russia narratives have failed to gain traction among world public opinion. Simply due to the lack of evidence to support these Western accusations. The Skripal affair has perhaps turned into the biggest farce. British government claims that the Kremlin ordered an assassination have floundered to the point of ridicule.

    It is hardly coincidence that Britain and its NATO allies are compelled to shore up the Skripal narrative and other anti-Russian narratives with the ramped up “global cyberattack” claims made this week.

    Photographs of alleged Russian intelligence operatives have been published. Potboiler indictments have been filed – again – by US law enforcement agencies. Verdicts have been cast by NATO governments and compliant news media of Russian state culpability, without Moscow being given a fair chance to respond to the “highly likely” claims. Claims and narratives are being accelerated, integrated and railroaded.

    It is well-established from the explosive disclosures by Edward Snowden, among other whistleblowers, that the American CIA and its partners have the cyber tools to create false “digital fingerprints” for the purpose of framing up enemies. Moreover, the vast cyber surveillance operations carried out by the US and its “Five Eyes” partners – much of which is illegal – is an ironic counterpoint to accusations being made against Russia.

    It is also possible in the murky world of all foreign states conducting espionage and information-gathering that attribution of wrongdoing by Russia can be easily exaggerated and made to look like a campaign of cyberattacks.

    There is a lawless climate today in the US and other Western states where mere allegations are cited as “proof”. The legal principle of being innocent until proven guilty has been jettisoned. The debacle in the US over a Supreme Court judge nominee is testament to the erosion of due process and legal standards.

    But what is all the more reprehensible and reckless is the intensification of criminalization of Russia – based on flimsy “evidence” or none at all. When such criminalization is then used to “justify” calls for a US-led naval blockade of Russian commercial oil trade the conditions are moving inevitably towards military confrontation. The blame for belligerence lies squarely with the NATO powers.

    A further irony is that the “spy mania” demonizing Russia is being made necessary because of the wholly unsubstantiated previous claims of Moscow’s malfeasance and “aggression”. Illusions and lies are being compounded with yet more bombastic, illusory claims.

    NATO’s information war against Russia is becoming a self-fulfilling “psy-op”. In the deplorable absence of normal diplomatic conduct and respect for international law, NATO’s information war is out of control. It is pushing relations with Russia to the abyss.

  • Want To Boost Your Salary? Try Moving To Singapore

    Are you a diligent US-based worker who’s tired of watching inflation wipe out what little wage gains you’ve managed to scrape together over the past few years? Well, if you’re looking for a pay boost, but don’t want to go through all the trouble of finding another better-paying job, Bloomberg has a suggestion: Try moving to Singapore.

    Switzerland

    According to HSBC’s annual Expat Explorer, 45% of expats reported earning more money working abroad than they did working in the US. For the average expat, moving abroad boosted their pay by 21%, with the highest-paying jobs found in the US, Singapore and Hong Kong.

    Switzerland

    Expats living in Switzerland, notorious for its high cost of living, reported an annual income boost totaling $61,000. Salaries averaged $203,000 per year, twice the global level. 

    Show

    Meanwhile, Singapore was ranked best place to live and work for a fourth straight year, ahead of New Zealand, Germany and Canada, while Switzerland (probably because of the high cost of living mentioned above) ranked eighth.

    “Singapore packs everything a budding expat could want into one of the world’s smallest territories,” said John Goddard, head of HSBC Expat.

    Sweden won first place in the ‘family’ category, while New Zealand, Spain and Taiwan led the ‘experience’ category.

    If moving abroad has always been a personal dream, then HSBC can name myriad benefits – both financial and familial – that often accompany expat status. However, the report had its blemishes. For example, the survey of 22,318 people showed that women often trailed behind men in terms of the level of benefit they experienced. For example, relocating only boosted a woman’s income by 27%, compared with 47% for men (apparently, HSBC found, the fabled wealth gap exists outside the confines of the US).

    But the bank also found several justifications for this that had nothing to do with women being paid less for doing the same exact job. Just half the women surveyed worked full time, and the average level of education was lower for women than for men.

  • Did Saudis, CIA Fear Khashoggi 9/11 Bombshell?

    Authored by Finian Cunningham via The Strategic Culture Foundation,

    The macabre case of missing journalist Jamal Khashoggi raises the question: did Saudi rulers fear him revealing highly damaging information on their secret dealings? In particular, possible involvement in the 9/11 terror attacks on New York in 2001.

    Even more intriguing are US media reports now emerging that American intelligence had snooped on and were aware of Saudi officials making plans to capture Khashoggi prior to his apparent disappearance at the Saudi consulate in Istanbul last week. If the Americans knew the journalist’s life was in danger, why didn’t they tip him off to avoid his doom?

    Jamal Khashoggi (59) had gone rogue, from the Saudi elite’s point of view. Formerly a senior editor in Saudi state media and an advisor to the royal court, he was imminently connected and versed in House of Saud affairs. As one commentator cryptically put it: “He knew where all the bodies were buried.”

    For the past year, Khashoggi went into self-imposed exile, taking up residence in the US, where he began writing opinion columns for the Washington Post.

    Khashoggi’s articles appeared to be taking on increasingly critical tone against the heir to the Saudi throne, Crown Prince Mohammed bin Salman. The 33-year-old Crown Prince, or MbS as he’s known, is de facto ruler of the oil-rich kingdom, in place of his aging father, King Salman.

    While Western media and several leaders, such as Presidents Trump and Macron, have been indulging MbS as “a reformer”, Khashoggi was spoiling this Saudi public relations effort by criticizing the war in Yemen, the blockade on Qatar and the crackdown on Saudi critics back home.

    However, what may have caused the Saudi royals more concern was what Khashoggi knew about darker, dirtier matters. And not just the Saudis, but American deep state actors as as well.

    He was formerly a media aide to Prince Turki al Faisal, who is an eminence gris figure in Saudi intelligence, with its systematic relations to American and British counterparts. Prince Turki’s father, Faisal, was formerly the king of Saudi Arabia until his assassination in 1975 by a family rival. Faisal was a half-brother of the present king, Salman, and therefore Prince Turki is a cousin of the Crown Prince – albeit at 73 more than twice his age.

    For nearly 23 years, from 1977 to 2001, Prince Turki was the director of the Mukhabarat, the Saudi state intelligence apparatus. He was instrumental in Saudi, American and British organization of the mujahideen fighters in Afghanistan to combat Soviet forces. Those militants in Afghanistan later evolved into the al Qaeda terror network, which has served as a cat’s paw in various US proxy wars across the Middle East, North Africa and Central Asia, including Russia’s backyard in the Caucasus.

    Ten days before the 9/11 terror attacks on New York City, in which some 3,000 Americans died, Prince Turki retired from his post as head of Saudi intelligence. It was an abrupt departure, well before his tenure was due to expire.

    There has previously been speculation in US media that this senior Saudi figure knew in advance that something major was going down on 9/11. At least 15 of the 19 Arabs who allegedly hijacked three commercial airplanes that day were Saudi nationals.

    Prince Turki has subsequently been named in a 2002 lawsuit mounted by families of 9/11 victims. There is little suggestion he was wittingly involved in organizing the terror plot. Later public comments indicated that Prince Turki was horrified by the atrocity. But the question is: did he know of the impending incident, and did he alert US intelligence, which then did not take appropriate action to prevent it?

    Jamal Khashoggi had long served as a trusted media advisor to Prince Turki, before the latter resigned from public office in 2007. Following 9/11, Turki was the Saudi ambassador to both the US and Britain.

    A tentative idea here is that Khashoggi, in his close dealings with Prince Turki over the years, may have gleaned highly sensitive inside information on what actually happened on 9/11. Were the Arab hijackers mere patsies used by the American CIA to facilitate an event which has since been used by American military planners to launch a global “war on terror” as a cover for illegal wars overseas? There is a huge body of evidence that the 9/11 attacks were indeed a “false flag” event orchestrated by the US deep state as a pretext for its imperialist rampages.

    The apparent abduction and murder last week of Jamal Khashoggi seems such an astoundingly desperate move by the Saudi rulers. More evidence is emerging from Turkish sources that the journalist was indeed lured to the consulate in Istanbul where he was killed by a 15-member hit squad. Reports are saying that the alleged assassination was ordered at the highest level of the Saudi royal court, which implicates Crown Prince MbS.

    Why would the Saudi rulers order such a heinous act, which would inevitably lead to acute political problems, as we are seeing in the fallout from governments and media coverage around the world?

    Over the past year, the House of Saud had been appealing to Khashoggi to return to Riyadh and resume his services as a media advisor to the royal court. He declined, fearing that something more sinister was afoot. When Khashoggi turned up in Istanbul to collect a divorce document from the Saudi consulate on September 28, it appears that the House of Saud decided to nab him. He was told to return to the consulate on October 2. On that same day, the 15-member group arrived from Riyadh on two private Gulfstream jets for the mission to kill him.

    Official Saudi claims stretch credulity. They say Khashoggi left the consulate building unharmed by a backdoor, although they won’t provide CCTV images to prove that. The Turks say their own CCTV facilities monitoring the front and back of the Saudi consulate show that Khashoggi did not leave the premises. The Turks seem confident of their claim he was murdered inside the building, his remains dismembered and removed in diplomatic vehicles. The two private jets left the same day from Istanbul with the 15 Saudis onboard to return to Riyadh, via Cairo and Dubai.

    To carry out such a reckless act, the Saudis must have been alarmed by Khashoggi’s critical commentaries appearing in the Washington Post. The columns appeared to be delivering more and more damaging insights into the regime under Crown Prince MbS.

    The Washington Post this week is reporting that US intelligence sources knew from telecom intercepts that the Saudis were planning to abduct Khashoggi. That implicates the House of Saud in a dastardly premeditated act of murder.

    But furthermore this same disclosure could also, unwittingly, implicate US intelligence. If the latter knew of a malicious intent towards Khashoggi, why didn’t US agents warn him about going to the Saudi consulate in Istanbul? Surely, he could have obtained the same personal documents from the Saudi embassy in Washington DC, a country where he was residing and would have been safer.

    Jamal Khashoggi may have known too many dark secrets about US and Saudi intel collusion, primarily related to the 9/11 terror incidents. And with his increasing volubility as a critical journalist in a prominent American news outlet, it may have been time to silence him. The Saudis as hitmen, the American CIA as facilitators.

  • Scientists Freak Out Over Pandemic Potential Of Genetically Engineered Smallpox

    Following the release of a paper earlier this year which describes how researchers stitched together segments of DNA in order to revive horsepox – a previously eradicated virus, scientists have been flipping out over the possibility that bad actors may use the study as a blueprint to revive smallpox. 

    The disease killed an estimated 300 million people before the World Health Organization deemed it eradicated following a long vaccination campaign. Thus, the publication of a method for reviving a closely related disease has understandably raised some red flags within the scientific community, reports futurism.com

    Critics argue that the paper not only demonstrates that you can synthesize a deadly pathogen for what Science reported was about US$100,000 in lab expenses, but even provides a slightly-too-detailed-for-comfort overview of how to do it.

    Some of the horsepox scientists’ coworkers are still pretty upset about this. PLOS One’s sister Journal, PLOS Pathogens, just published three opinion pieces about the whole flap, as well as a rebuttal by the Canadian professors.

    Overall, everyone’s pretty polite. But you get the sense that microbiologists are really, really worried about someone reviving smallpox. –futurism.com

    Prior to its eradication, smallpox was primarily spread by direct and fairly prolonged face-to-face contact between people. Once the first sores appeared in the mouth and throat (the early rash stage), they were contagious until the last smallpox scab fell off. According to the CDC, “these scabs and the fluid found in the patient’s sores also contained the variola virus. The virus can spread through these materials or through the objects contaminated by them, such as bedding or clothing. People who cared for smallpox patients and washed their bedding or clothing had to wear gloves and take care to not get infected.”

    Smallpox sores (photo: CDC)

    What would a smallpox bioterror attack look like? Via the CDC:

    Most likely, if smallpox is released into the United States as a bioterrorist attack, public health authorities will find out once the first person sick with the disease goes to a hospital for treatment of an unknown illness. Doctors will examine the person and use tools developed by CDC to figure out if the person’s signs and symptoms are similar to those of smallpox. If doctors suspect the person has smallpox, they will care for the person and isolate them in the hospital so that others do not come in contact with the smallpox virus. The medical staff at the hospital will contact local public health authorities to let them know they have a patient who might have smallpox.

    Local public health authorities would then alert public health officials at the state and federal level, such as CDC, to help diagnose the disease. If experts confirm the illness is smallpox, then CDC, along with state and local public health authorities, will put into place their plans to respond to a bioterrorist attack with smallpox.

    Kevin Esvelt, a biochemist at MIT, wrote on Thursday that the threat is so significant that “it may be wise to begin encouraging norms of caution among authors, peer reviewers, editors, and journalists.” 

    At present, we decidedly err on the side of spreading all information.

    Despite entirely predictable advances in DNA assembly, every human with an internet connection can access the genetic blueprints of viruses that might kill millions.

    These and worse hazards are conveniently summarized by certain Wikipedia articles, which helpfully cite technical literature relevant to misuse.

    Note the deliberate absence of citations in the above paragraph. Citing or linking to already public information hazards may seem nearly harmless, but each instance contributes to a tragedy of the commons in which truly dangerous technical details become readily accessible to everyone.

    Given that it takes just one well-meaning scientist to irretrievably release a technological information hazard from the metaphorical bottle, it may be wise to begin encouraging norms of caution among authors, peer reviewers, editors, and journalists. –PLOS

    Esvelt blamed the media for amplifying the negative potential of smallpox synthesis as well: 

    DNA synthesis is becoming accessible to a wide variety of people, and the instructions for doing nasty things are freely available online.

    In the horsepox study, for instance, the information hazard is partly in the paper and the methods they described.

    But it’s also in the media covering it and highlighting that something bad can be done. And this is worsened by the people who are alarmed, because we talk to journalists about the potential harm, and that just feeds into it. –MIT News

    The Canadian professors, meanwhile, shot back at their critics – arguing that smallpox was bound to be synthesized at some point anyway. 

    Realistically all attempts to oppose technological advances have failed over centuries.

    We suggest that one should instead focus on regulating the products of these technologies while educating people of the need to plan mitigating strategies based upon a sound understanding of the risks that such work might pose.

    In these discussions, a long-term perspective is essential. –PLOS

    In short, prepare for the Jurassic Park of deadly pathogens and their pandemic potential.  

  • A Glimpse Beyond The Unipolar Moment

    Authored by Norman Ball via The Saker blog,

    “Potentially the most dangerous scenario would be a grand coalition of China, Russia and perhaps Iran, an ‘anti-hegemonic’ coalition, united not by ideology but by complementary grievances” —Zbigniew Brzezinski

    Are we reaching the penultimate and petulant back-end of the American Empire’s Unipolar Moment, a denouement hastened by a raft of sanctions regimes as imperiously doled out as they are laden with unconsidered paradox?

    Though the sun is prohibited from casting its light between them, Nation and Empire are not an organically indivisible formation. Indeed Americans, no less than others, should relish the prospect of a resumed, unalloyed nationhood after decades of Empire co-optation. Few Americans realize the skulking entity that looms in the shadows of their overrun and diminished formal institutions as being a separable imposition capable of (to use a Benjamin Netanyahu phrase) drying up and blowing away.

    Empire overlay is an uninvited and usurping agent bent on hostile, world-conquering aims to which America plays safe harbor and unwitting hostage in equal parts. Though the mode of exploitation varies, no nation on the world stage is left untouched by transnational exploitation.

    America, like all nations, is a boundaried fixity; whereas Empire despite travelling under the former’s name is a projective and extraterritorial expanse whose designs exceed the devise and interests of the nation-host itself. Invariably Empire doesn’t so much succumb to overreach as it overreaches the capacities of its nation-host; wrecking the balance sheet, debauching the currency, taxing the capacities of the deputized military and (most importantly as we shall see) sullying the conceptual coordinates so central to a nation’s actionable sense of self.

    Post-Empire, the nation-host suffers the aftermath of ruinous inflation or worse. Empire, a continuous organism, bides its time before alighting elsewhere. Thus unipolarity is an Empire project in the same manner a tapeworm mimics the appetites of its host, the afflicted nation being little more than a body-snatched, debt-amassing hostage-vessel.

    Daniel 2’s prophesied statue gives anthropic form (and thus systemic coherence) to Empire succession. Each empire ‘chapter’ pours into the next with corporeal fluidity, the respective statue material and animal totem befitting the situational needs of Empire in that historical moment. The anatomy suggests an eschatological continuum, hardly a severed procession of akimbo body parts. The purposeful succession of empires conducts human history to a terminus.

    Usury is the arithmetically ordained travel-partner or Empire. Indeed the latter is more Babylonian mystery than secular-geopolitical formation. Through it, all earthly power and wealth is to be gathered under one aegis until no nation can lay claim to an autonomous storehouse. The whole purpose of human history is demonic consolidation by the God of this World.

    In the same way, the events of the world prove less yielding to geopolitical analysis absent an explicit awareness of Paul’s Principalities or the slow-thighed onset of the Antichrist/Dajjal. As human history thins like gruel in the twilight, the spiritual backdrop moves inexorably to the fore.

    (Understanding the present moment demands continual oscillation between the world-beyond and the world-at-hand. So be it.)

    Sanctions negate the very notion of empiric expansion. Beneath all the bluster, continual recourse to a ‘remedy of retreat’ signals the exhaustion of Empire’s Pax Americana phase. Like medieval bleeding, the cure soon exceeds the lethality of the underlining disease.

    For the moment, America’s economic activity, 25% of the world’s GDP, is a big party to be dis-invited from. Furthermore, 70% of that GDP is buffered from international trade disruptions as it consists of internal consumption. (In China, for example, the figure is closer to 40%). When push comes to shove the US economy is sufficiently self-contained such that a protracted period of inwardness is a viable course of action.

    Joseph Micallef hardly overstate things trumpeting the arrival of American energy independence. One wonders how the Empire would coax the Nation to do its bidding absent the inducement of vulnerable overseas energy supplies. Of course this too argues for the end of the American phase of Empire:

    “U.S. energy independence is going to be a game changer in international affairs and will have far-ranging consequences. It will drive a reorientation of U.S. foreign policy as profound as that driven by American dependence on foreign oil in the second half of the 20th century.”

    While inconsistent with empiric expansion, sanctions and their threat can for a time inflict asymmetric damage on the sanctioned party –until some vague tipping point is reached.

    Midwives to a nascent neo-nationalist era, President Trump and his formidable trade team have been leveraging (some would say weaponizing) America’s economic primacy in order to redirect product origination and trade flows.

    For example the USMCA’s closing of the infamous NAFTA loophole or ‘trade toll’ will be a huge boon to US consumers and workers alike, not to mention an indirect trade assault on China which advantaged the loophole via finished goods assembly plants in Canada and Mexico. The so-called ‘regional vehicle content’ has been boosted from 62.5% to 75%.

    What are the implications of this USMCA provision alone? Lexicology explains:

    “Mexico and Canada are pushing for the smallest amount of North American parts in NAFTA automobile production. This means that Mexico and Canada can import the difference from China, Asia or Europe, finish the product with some basic assembly and then pass off the product to the American market- saving big money on tariffs for the original producing country in the process.”

    The necessity of a resurgent manufacturing base is being characterized (correctly) as a national security (if not even a national dignity) issue with implications far beyond the usual econometric equilibrations.

    What the world needs to understand is that the unacknowledged obverse of America First is Empire Never Again. America’s self-reclamation process on the trade front will be a boon for the planet. Re-nationalization is synonymous with ‘de-empirization’. As America reacquaints with nation-among-nations status, multipolar clusters will fill the void.

    America the Empire routinely pulls the wool over America the Nation’s eyes. One deft bit of corporatist misdirection (articulated through that multinational stalking horse, the US Chamber of Commerce) has been to assure Americans they could thrive as a service-sector economy.

    As nothing is gained alerting regular Americans to the divergent interests of Empire and Nation, the Empire is adept at posing as the Nation. (Besides, what people would knowingly seek empiric imprimatu anyway, a dubious appointment demanding more blood and treasure than it ever bestows?)

    Globalists would have us favorably envision a world where the US holds the edge in 2030 Powerpoint presentations while China captures the high-performance medical device and industrial robotics markets. As Yogi Berra might say, “all left-handers over here to flip charts, all right-handers over there to flip burgers.  The rest of you come with me.” Yes, but where to exactly, Yogi? The Argentine Paradox circa 1950?

    The same can be said for Made in China 2025, from a Chinese perspective of course. Geopolitical hegemony is the goal, economic nationalism the rallying cry for respective domestic audiences. No wonder trade wars metastasize into shooting wars. No less than everything is at stake.

    (Some expect that, with centuries of practice under its belt, the Chinese empire model, historically one of ebb-and-flow concentric flexibility, will improve upon the winner-take-all Western model. Time may tell.)

    Parsimonious when it comes to sharing the planet’s ill-gotten gains with its erstwhile nation-host (American real incomes peaked in 1973), Empire is all too willing both to off-load the debt burden and share the vainglory of its overseas military exploits.

    We seek evidence of the Heartland tiring of its conscription obligations, or that their nation’s subsidiary role has even dawned on the average American after nearly two decades of ruinously fruitless overseas campaigns. The enthusiastic reception afforded Clint Eastwood’s 2014 movie American Sniper —to belabor one cultural touchstone– is hardly a bullish indicator.

    In fact, the Nation still wraps itself in the Empire’s exploits with a patriotic vigor that obliges it to insist, against all evidence, that Iraq and Afghanistan were missions of existential import to the safeguarding of American neighborhoods. That this misprision persists is a powerful testament to the Empire’s ability to enforce and sustain a narrative steeped in false consciousness to which clarifying epiphanies must forever be kept at bay. In recent months scores of alt-media sources have been exiled from Youtube in veiled recognition of their counter-narrative incursions. The Empire cannot relinquish narrative hegemony. The most decisive conflicts are conceptual.

    Sartre famously called this insistent and externalized apparatus of persuasion America’s ‘implacable machine’. Eastwood, the Leni Riefenstahl of our time, fashions empire exploits into pastiches of Americana. This is pure propaganda. Empire is a rapaciously unnatural imposition. Rooted in no soil, it descends from above. Transnationalism sustains itself on grassroots alienation and collective misdirection.

    The Vineyard’s Saker indirectly acknowledges this differentiated two-headedness when he says, “Russia does represent an existential threat, not for the United States as a country or for its people, but for the AngloZionist Empire, just as the latter represents an existential threat to Russia.” He might just as easily have extended the empire threat to America itself. Where Saker offers daylight, Eastwood extends the darkness of a confused nation.

    It would surprise many Americans to know that their nation hosts one of the least democratically answerable national governments in the world (though far fewer would be surprised today than, say, two years ago). Trump, the exogenous usurper, is trying to reverse this expropriation of the country’s traditional Madisonian Institutions by the Security State’s Trumanite Network (what Michael Glennon calls our Double Government, the prior terminology being his).

    How did the empire accomplish this parallel sovereignty?

    The hijack occurred in two sizable chunks (the 1947 National Security Act and the USA Patriot Act of 2001). Yes, America has a divided government alright. Just not in the sense American civics classes define the concept.

    Moreover this sovereignty split occurred without benefit of referendum or Constitutional Convention. The division was assented to –and furtively institutionalized– over the ensuing post-WW2 decades by the nation’s elected leadership, the latter bartering away democratic self-determination and their own discretionary power for more attractive post-public sector career vistas.

    A further lubricant was mass fear, something the Security State excels at fanning. This is a toxic oroborus: fear rationalizes enhanced security measures, obliging it in turn to identify more threats and thus promulgate more fear.

    America’s captured political system (captured, in the main, by treasonous greed) perennially offers no material recourse away from Empire objectives. Carroll Quigley exposed the degradation of choice mounted by the two-party charade decades ago. His protestations fell on deaf ears.

    Then came Trump, arguably more detested by ‘Rino’ Republicans for helicoptering onto their half-acre of Quigleyan turf than the Democrats who openly shower their contempt upon him, aided by a not-so-secret confederation of Senior Executive Service (SES)personnel and an assorted Five Eyes gallery of International Men of Mystery.

    That new attention is being drawn to this fissure is a function of the Trumanites’ open rebellion against Trump’s subversive (Madisonian revivalist) presidency. Trump has forced the Deep State to the surface, a process that compels an explicit –and never before attempted– referendum on globalism, something the movement cannot possibly prevail on as the closest thing it possesses to a natural constituency is a beholden media, George Soros’ checkbook and a traitorous ruling class.

    These transnational Trumanites, the true empire-builders, seek geopolitical hegemony, (over)-employing trade sanctions as a tool towards that end. Whereas Trump, a businessman to his core, seeks only comparative advantage and level playing fields i.e. trade for its own sake. Trump has the inclinations of a competitor and possesses an abiding faith in the productive capacities of his fellow Americans. His America-first exertions are sincere.

    Despite a near-daily (and 92% negative) onslaught of CIA-Mockingbird anti-Trump vitriol, there is a dawning realization that the current President is as close to an anti-Empire crusader as any POTUS can possibly be, given the powerful institutional constraints (and Trumanite presence) he must work within. (The latter qualification cannot be emphasized enough.)

    Just this week in his essay ‘Trump Has Done More to Take On and Take Down the American Empire Than Any Other President’, Gareth Porter concedes, with the obligatory reluctance attending any favorable Trump assessment that, “…[despite] Trump’s multiple serious personal and political failings…[his] unorthodox approach has already emboldened him to challenge the essential logic of the US military empire more than any previous president.”

    Creditably, Porter manages to overcome his early subjectively-derived aversions with dispassionate analysis. More thinkers will follow. Trump will never inspire great wellsprings of affection. Yet shouldn’t likability deficits fall within the rehabilitative purview of Oprah Winfrey and her top shelf of gauzy sofa lens? History books are replete with highly eccentric, yet transformative, leaders. Who but the most media-besotted automatons really care?

    As for our beleaguered trading partners, the list of American pariahs (sanctioned and tariffed) grows by the month: China, Russia, Iran, Turkey come immediately to mind, obviously in varying modes and degrees. What happens should the EU (the world’s 2nd largest ‘economy’) continue to trade with Iran under a “special payments entity” arrangement despite US warnings? For the record, India has no plans to cease its Iranian oil purchases. This comes at the cost of American producers as will European demand absorbed by the onset of Nordstream 2.

    The US Department of Treasury’s Office of Foreign Assets Control (OFAC) maintains a list of sanctioned nations and programs.  It’s well worth a look.

    Weapon system defections present a knottier dilemma as military and trade considerations commingle. The Countering America’s Adversaries Through Sanctions Act (CAATSA) of 2017 addresses punitive measures and waiver procedures; a bill opposed, it must be said, by President Trump. Turkey, a NATO member, is taking delivery of the Russian S400 missile defense system, playing havoc with weapons (F35) inter-operability, among other things.

    Commenting on the likelihood that India will extract a waiver from the US for the purchase of a S400 system, Fort Russ’ Joaquin Flores suggests America’s quiet acquiescence may be the biggest news of all, indicative perhaps of a dawning realization in Washington that the sanction whip is losing its lash:

    “But the real signal here is that the US is willing to publicly also disclose that a waiver is possible…that in its gambit to shore up the empire and force countries to choose Atlanticism over Multipolarity, it will not by way of hubris or over-playing, engender the very multipolarity [it] presently work[s] against.”

    Flores surfaces the nub of the paradox: By waiving sanctions and allowing breakaways on a case-by-case basis, does unipolarity preserve itself by exception or compromise itself by non-inclusion? A contrary beast, this unipolarity.

    First of all, absolute power is an unnatural configuration if it isn’t a fairy tale altogether. Kenneth Waltz, one of the 20th century’s leading scholars on International Relations, recognized unipolarity as being among the most tenuous of international power arrangements.

    Fully consummated unipolarity contends with no nemesis at the gate, no rudely apparent countervailing force with which to remind itself that power consolidation is always an asymptotic function forever falling short of omnipotence. Whereas bipolarity increases overall system stability as each power has only the other to regard warily. A vigorous checkmate ensues. Like a two-headed Cerberus, power is affixed to one mode of action.

    In short, power is a distributed resource requiring a corner of contested ground upon which to construct an antithetical lever. One can calibrate power only in the context of someone else existing beyond one’s own locus of control.

    Until history fully resolves itself, the ascendant antithesis must germinate in a strange province that forever looms on the frontier of the prevailing thesis. In this way, ideas inhabit their own conceptually balkanized geographies.

    Is internal contradiction the ultimate empire-killer? In his 2013 essay, ‘The Inevitable Has Happened in Egypt’, Alastair Crooke surfaces a dialectical reality, in the context of that particular moment’s crisis, the Muslim Brotherhood’s massacre at the hands of Egyptian President al-Sisi. Speaking to the larger demise of the USSR and the lessons drawn, in Sunni circles, from its collapse, he observed:

    One has to think Crooke intended ‘omnipotence’ instead of ‘omniscience’. Beyond that, he captures the Hegelian primacy of ideas (as opposed to the brute accouterments of tanks, planes and automobiles) as being the first-order Empire battleground.

    As Flores suggests, the unipolar moment does have an antithetical nemesis. It exists, not for the moment at least, in the guise of a discrete nation-contender, but rather from amidst the inchoate forces of over-extension, hubris and internal contradiction.

    One way for unipolarity to hasten its own demise is to persist in the practice of briskly escorting bad actors out of the Big Tent. At some point a critical mass of delinquent nations finds itself on the outside-looking-in; to which a new inside and fresh synthesis are baptized. The formative institutions, structures and initiatives already exist: OBOR, BRI, BRICS, AIIB, SCO.

    The evolving role of the Shanghai Cooperative Organization (SCO) for example is on vivid exhibit his week with rather self-conscious pronouncements of multilateral cooperation, due no doubt to American trade frictions with key members Russia,  China and India. These are the formative orbits that can exert and accelerate gravitational tugs away from prevailing global governance models and power centers.

    Left untended, yawning internal contradictions lead to a strange and strident logic rooted in self-injury and geopolitical masochism: By shooting myself in the foot, I promise you will bleed to death. A spiritual forebear? Bob Dylan with ‘it’s alright Ma, I’m only bleeding.’

    Analyzed in myopic isolation, each sanction regime may indeed conform to a calculus of advantageously asymmetric bleeding. That is, Empire appears to crush each recalcitrant outlaw in serial procession.

    Yet how fully considered is the cumulative effect of a dozen rocks being hurled simultaneously at a Goliath convinced of his insuperable size? Death ensues at the instigation of a thousand Davids. Perhaps the Empire’s quant-model betrays a methodological flaw in its singular regard for each battle to the exclusion of the cumulative toll of mounting departures.

    Trumpism, the exuberant renewal of national self-confidence by a man who exudes it to the near-level of parody, obliquely acquiesces to the death of empire (without formally announcing it). Out of America’s re-acquaintance with itself springs a psychic reinvestment in the traditional facets of the American character, sublimated arguably since the Nixon Shock of 1970: enterprise, self-reliance, innovation and a can-do work ethic.

    For those who doubt the powerful emotional and psychic ramifications of the Trump renationalization, watch this steel worker tear-up at the realization he’s been rescued from oblivion. Work is a moral calling that instills purposeful existence. Trade merely extends that calling beyond a nation’s borders. Fellow Glaswegian Adam Smith was not a Wall Street economist running balance-of-payment Excel spreadsheets for the ‘grand’ purpose of sector fund allocations. He was a moral philosopher.

    The American people, most of them anyway, could have frankly gone to hell as far as the bankers were concerned. The enterprise costs (a productively idled and hollowed-out nation) proved fantastically exorbitant. No privilege accrued to the common man. Middle America became the Military Industrial Praetorian Guard hiring pool.

    Recalling Major General Smedley Butler (the bold-face mine):

    “War is a racket. It always has been.

    It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”

    Sanctions betray the unipolar moment’s faltering grasp. They are the unacknowledged road back from Empire to Nation. The contracting enterprise puts the best face on what can only be deemed a mutually assented to rejection. For, equally, the sanctioned nation is declining its prescribed role within the Empire playbook. Thus sanctions better resemble a divorce stemming from mutually irreconcilable differences than a unilateral flash of Empire pique.

    Trump, almost certainly, is accepting of these geopolitical normalizations, which ultimately will entail the cessation of the US Dollar as reserve currency.

    Hegemony is succumbing to variegation. There are other globally-aware approaches. Pope Francis’ polyhedral globalism for example combines comparative advantage with the inherent dignity of each nation’s native culture. Monoculture is a Unipolar aim. Global economies-of-scale seek to arbitrage away –to flatten– indigenous human character. Uniqueness is the lumpy stew that bedevils rote, commodity pricing.

    The sanctioned nation makes a calculation that its interests are better served relinquishing the benevolent gaze of Washington. In so doing, it embarks on a path alone.

    But not so alone as to be lonely. Not anymore. Other diasporees have preceded it. As will a re-nationalized America in due course.

  • "It's All About Space": Trump Says Russia And China Are Ahead Of US Space Force

    The US needs its own space force because China and Russia have already gotten a head start, but American ingenuity and the ability to make the “greatest rockets” in the world are right here at home, President Trump said at a rally in Richmond, Kentucky Saturday night.

    Russia has already started, China has already started. They’ve got a start, but we have the greatest people in the world, we make the greatest equipment in the world, we make the greatest rockets, and missiles, and tanks, and ships in the world.” 

    He said his record $700bn+ military budget that would “fully rebuild the American military” and vaunted that creation of the Space Force, first announced last June, is already underway. 

    “You know it’s all about space. It’s all about space. Defense, offense, everything is going to soon be all about space,” Trump said before a packed audience in Kentucky.

    Based on details from comments made by Vice President Mike Pence in August, the US Space Force is set to become the sixth branch of the Military as well as to help ensure “American dominance in space” by 2020.

    Trump was echoing Pence’s prior emphasis, that moving forward on a US military space program is ultimately in response to other nations’ advances in the area. Pence had pointed out, for example, that Beijing’s People’s Liberation Army (PLA) Strategic Support Force is overseeing the developing and maintaining of the PLA’s space capabilities.

    The White House previously said the above logos are up for consideration to represent what will be a sixth US military branch. via Tennessee Star

    In response to President Trump’s Saturday night remarks invoking Russia as having “already started” its program, Russian state-funded media channels were quick to respond that Moscow is not seeking the militarization of space

    RT News’ commentary on Trump’s statement included the following:

    The key difference is in the mission statements. The Russian ‘space force’ exists to “observe space objects, detect threats to Russia in space and from space, and counter them if necessary,” launch satellites for military and dual (military plus civilian) use, obtain satellite intelligence, as well as maintaining them in working order. In short, nothing any country with reasonable satellite-launching capability, including the US, doesn’t already do.

    Cartoon via Rachel Gold

    Ultimately what Trump is proposing is of a different nature, seen in the following, according to RT:

    What Trump wants to do with his space force is to have the ability to degrade, deny, disrupt, destroy, and manipulate adversary capabilities to protect US interests, assets, and way of life.”

    When Trump first shocked the world by announcing the program on June 18, he expressly said at the beginning of his comments that “we must have American dominance in space.” And followed with: “Very importantly, I am hereby directing the Department of Defense and Pentagon to immediately begin the process necessary to establish a Space Force as the Sixth Branch of the Armed Forces.”

    But there is evidence to suggest Trump’s words about a Russian leg up in military space capabilities are accurate. Per a recent report in Axios, “Russia has had sophisticated launch systems for decades, in addition to another that tracks objects more than 30,000 miles above the Earth, according to the CSIS 2018 Space Threat Assessment.”

    And further a separate February report from the Director of National Intelligence found that both China and Russia are working to develop anti-satellite weapons “that could blind or damage sensitive space-based optical sensors, such as those used for remote sensing or missile defense.”

    The Pentagon and Air Force have put estimates for the new Space Force at $8 billion and $13 billion, respectively. This includes initiating a new US Space Command by the end of this year. 

    But perhaps the more interesting question that remains is who will be picked by the White House to assume the title and awesome responsibility of “Commander of Space”?

  • James Comey And The Unending Bush Torture Scandal

    Authored by James Bovard via The Future of Freedom Foundation,

    The vast regime of torture created by the Bush administration after the 9/11 attacks continues to haunt America. The political class and most of the media have never dealt honestly with the profound constitutional corruption that such practices inflicted. Instead, torture enablers are permitted to pirouette as heroic figures on the flimsiest evidence.

    Former FBI chief James Comey is the latest beneficiary of the media’s “no fault” scoring on the torture scandal. In his media interviews for his new memoir, A Higher Loyalty: Truth, Lies, and Leadership, Comey is portraying himself as a Boy Scout who sought only to do good things. But his record is far more damning than most Americans realize.

    Comey continues to use memos from his earlier government gigs to whitewash all of the abuses he sanctified. “Here I stand; I can do no other,” Comey told George W. Bush in 2004 when Bush pressured Comey, who was then Deputy Attorney General, to approve an unlawful anti-terrorist policy. Comey was quoting a line supposedly uttered by Martin Luther in 1521, when he told Emperor Charles V and an assembly of Church officials that he would not recant his sweeping criticisms of the Catholic Church.

    The American Civil Liberties Union, Human Rights Watch, and other organizations did excellent reports prior to Comey’s becoming FBI chief that laid out his role in the torture scandal. Such hard facts, however, have long since vanished from the media radar screen. MSNBC host Chris Matthews recently declared, “James Comey made his bones by standing up against torture. He was a made man before Trump came along.” Washington Post columnist Fareed Zakaria, in a column declaring that Americans should be “deeply grateful” to lawyers such as Comey, declared, “The Bush administration wanted to claim that its ‘enhanced interrogation techniques’ were lawful. Comey believed they were not…. So Comey pushed back as much as he could.

    Martin Luther risked death to fight against what he considered the scandalous religious practices of his time. Comey, a top Bush administration policymaker, found a safer way to oppose the worldwide secret U.S. torture regime widely considered a heresy against American values: he approved brutal practices and then wrote some memos and emails fretting about the optics.

    Losing Sleep

    Comey became deputy attorney general in late 2003 and “had oversight of the legal justification used to authorize” key Bush programs in the war on terror, as a Bloomberg News analysis noted. At that time, the Bush White House was pushing the Justice Department to again sign off on an array of extreme practices that had begun shortly after the 9/11 attacks. A 2002 Justice Department memo had leaked out that declared that the federal Anti-Torture Act “would be unconstitutional if it impermissibly encroached on the President’s constitutional power to conduct a military campaign.” The same Justice Department policy spurred a secret 2003 Pentagon document on interrogation policies that openly encouraged contempt for the law: “Sometimes the greater good for society will be accomplished by violating the literal language of the criminal law.”

    Photos had also leaked from Abu Ghraib prison in Iraq showing the stacking of naked prisoners with bags over their heads, mock electrocution from a wire connected to a man’s penis, guard dogs on the verge of ripping into naked men, and grinning U.S. male and female soldiers celebrating the sordid degradation. Legendary investigative reporter Seymour Hersh published extracts in the New Yorker from a March 2004 report by Maj. Gen. Antonio Taguba that catalogued other U.S. interrogation abuses: “Breaking chemical lights and pouring the phosphoric liquid on detainees; pouring cold water on naked detainees; beating detainees with a broom handle and a chair; threatening male detainees with rape … sodomizing a detainee with a chemical light and perhaps a broom stick, and using military working dogs to frighten and intimidate detainees with threats of attack, and in one instance actually biting a detainee.”

    The Bush administration responded to the revelations with a torrent of falsehoods, complemented by attacks on the character of critics. Bush declared, “Let me make very clear the position of my government and our country…. The values of this country are such that torture is not a part of our soul and our being.” Bush had the audacity to run for reelection as the anti-torture candidate, boasting that “for decades, Saddam tormented and tortured the people of Iraq. Because we acted, Iraq is free and a sovereign nation.” He was hammering this theme despite a confidential CIA Inspector General report warning that post–9/11 CIA interrogation methods might violate the international Convention Against Torture.

    James Comey had the opportunity to condemn the outrageous practices and pledge that the Justice Department would cease providing the color of law to medieval-era abuses. Instead, Comey merely repudiated the controversial 2002 memo. Speaking to the media in a not-for-attribution session on June 22, 2004, he declared that the 2002 memo was “overbroad,” “abstract academic theory,” and “legally unnecessary.” He helped oversee crafting a new memo with different legal footing to justify the same interrogation methods.

    Comey twice gave explicit approval for waterboarding, which sought to break detainees with near-drowning. This practice had been recognized as a war crime by the U.S. government since the Spanish-American War. A practice that was notorious when inflicted by the Spanish Inquisition was adopted by the CIA with the Justice Department’s blessing. (When Barack Obama nominated Comey to be FBI chief in 2013, he testified that he had belatedly recognized that waterboarding was actually torture.)

    Comey wrote in his memoir that he was losing sleep over concern about Bush-administration torture polices. But losing sleep was not an option for detainees, because Comey approved sleep deprivation as an interrogation technique. Detainees could be forcibly kept awake for 180 hours until they confessed their crimes. How did that work? At Abu Ghraib, one FBI agent reported seeing a detainee “handcuffed to a railing with a nylon sack on his head and a shower curtain draped around him, being slapped by a soldier to keep him awake.” Numerous FBI agents protested the extreme interrogation methods they saw at Guantanamo and elsewhere, but their warnings were ignored.

    Comey also approved “wall slamming” — which, as law professor David Cole wrote, meant that detainees could be thrown against a wall up to 30 times. Comey also signed off on the CIA’s using “interrogation” methods such as facial slaps, locking detainees in small boxes for 18 hours, and forced nudity. When the secret Comey memo approving those methods finally became public in 2009, many Americans were aghast — and relieved that the Obama administration had repudiated Bush policies.

    When it came to opposing torture, Comey’s version of “Here I stand” had more loopholes than a reverse-mortgage contract. Though Comey in 2005 approved each of 13 controversial extreme interrogation methods, he objected to combining multiple methods on one detainee.

    The Torture Guy

    In his memoir, Comey relates that his wife told him, “Don’t be the torture guy!” Comey apparently feels that he satisfied her dictate by writing memos that opposed combining multiple extreme interrogation methods. And since the vast majority of the American media agree with him, he must be right.

    Comey’s cheerleaders seem uninterested in the damning evidence that has surfaced since his time as a torture enabler in the Bush administration. In 2014, the Senate Intelligence Committee finally released a massive report on the CIA torture regime — including death resulting from hypothermia, rape-like rectal feeding of detainees, compelling detainees to stand long periods on broken legs, and dozens of cases where innocent people were pointlessly brutalized. Psychologists aided the torture regime, offering hints on how to destroy the will and resistance of prisoners. From the start, the program was protected by phalanxes of lying federal officials.

    When he first campaigned for president, Barack Obama pledged to vigorously investigate the Bush torture regime for criminal violations. Instead, the Obama administration proffered one excuse after another to suppress the vast majority of the evidence, pardon all U.S. government torturers, and throttle all torture-related lawsuits. The only CIA official to go to prison for the torture scandal was courageous whistleblower John Kiriakou. Kiriakou’s fate illustrates that telling the truth is treated as the most unforgivable atrocity in Washington.

    If Comey had resigned in 2004 or 2005 to protest the torture techniques he now claims to abhor, he would deserve some of the praise he is now receiving. Instead, he remained in the Bush administration but wrote an email summarizing his objections, declaring that “it was my job to protect the department and the A.G. [Attorney General] and that I could not agree to this because it was wrong.” A 2009 New York Times analysis noted that Comey and two colleagues “have largely escaped criticism [for approving torture] because they raised questions about interrogation and the law.” In Washington, writing emails is “close enough for government work” to confer sainthood.

    When Comey finally exited the Justice Department in August 2005 to become a lavishly paid senior vice president for Lockheed Martin, he proclaimed in a farewell speech that protecting the Justice Department’s “reservoir” of “trust and credibility” requires “vigilance” and “an unerring commitment to truth.” But he had perpetuated policies that shattered the moral credibility of both the Justice Department and the U.S. government. He failed to heed Martin Luther’s admonition, “You are not only responsible for what you say, but also for what you do not say.”

    Comey is likely to go to his grave without paying any price for his role in perpetuating appalling U.S. government abuses. It is far more important to recognize the profound danger that torture and the exoneration of torturers pose to the United States. “No free government can survive that is not based on the supremacy of the law,” is one of the mottoes chiseled into the façade of Justice Department headquarters. Unfortunately, politicians nowadays can choose which laws they obey and which laws they trample. And Americans are supposed to presume that we still have the rule of law as long as politicians and bureaucrats deny their crimes.

  • Shocktober's Not Over – McElligott Sees More "Rolling Minsky Moments" As "Pseudo-Stability" Unravels

    Just before last week’s interest-rate driven market selloff entered its most acute phase, we cited CTA positioning data from Nomura showing that systematic funds had not yet begun the painful process of deleveraging as certain “triggers” had not yet been met. But shortly after this commentary from Nomura’s cross-asset strategist Charlie McElligott had been distributed to Nomura’s clients, the selling pressure intensified, busting through trigger levels in a way that only exacerbated what became the most intense selloff in SPX since February (and the biggest for NDX since Brexit).

    With markets creeping higher again after Wednesday’s furious selloff, McElligott chimed in with an update to Nomura’s positioning models that incorporated this latest break. As of Wednesday’s close, McElligott acknowledged that the Nomura Quant Strategies CTA model was indicating that these systematic sellers had reduced down to “43% Long” from “100% Max Long” 1 week ago, resulting in an estimated $88BN in one day selling on the one day move from “97% Long”, the positioning at the start of Wednesday’s session, all the way down to “43% Long.”

    Leverage

    With his audience clamoring for more guidance about what, exactly, triggered the market wreck of this past week, McElligott made a brief appearance Thursday afternoon on the MacroVoices podcast, where he got “philosophical” during an interview with Erik Townsend and Patrick Ceresna, arguing that this week’s equities driven selloff actually had a deeper “macro origin.”

    Again, if I’m really stepping back and talking almost more philosophically, it’s the bigger picture here is that a higher real interest rate environment is resetting term premiums. And, with that, the cost of leverage, cross-asset correlations, asset price valuation – all of these constructs built into the post-crisis quantitative easing era are now ripe to tip over.

    And we’re seeing these rolling Minsky moments as the pseudo-stability of lower interest rates, flatter curves, and suppressed volatility breeds instability through the leverage. And the leverage that’s had to have been deployed on strategies over the past few years as yield was chased. And that’s what we’re coming out of right now.

    As McElligott explains, the market tantrum that was apparently triggered by the return of the bear steepener trade in long-term rates during the preceding week, is ultimately a factor of the “pseudostability” that has characterized market flows during the post-GFC era. As a result, investors can expect these “rolling Minsky moments” – instances where selloffs rapidly intensify as both systemic and discretionary bids evaporate – to become increasingly common.

    Charlie

    Fortunately for discretionary managers struggling to meet their P&L targets, this systematic selling has mostly subsided for now, as the market rebound (which really continued on Friday) moved these funds further away from the next big deleveraging target.

    So, with that 2,719 level that you spoke about, was the next deleveraging point per our projections in the S&P for the futures to close below that level. It’s not a one touch, but to close below that level would see our current S&P position break down from what went into the day as a 43% long. And, as of one week ago, that was 100% max long. If we were to have closed below 2,719 today, that would have then taken us down to just 9% net long. And would have triggered an additional selling of $57 billion S&P futures.

    As an aside, McElligott explained that selling, for now, has been concentrated in the CTA universe, as risk party funds – that other favorite market scapegoat – are typically much slower to move, and thus will take more time to react to the breakdown in the equity-bond correlation.

    So our model looks at windows from two weeks, to one month, to three month, to six month, to one year. And we see the different transitions and the different signals generated across those buckets for various asset classes. But when the bond equities correlation breaks down, as it is currently right now, people will jump to the risk parity side of the equation, which, per our construct, is a much slower moving vehicle.

    Ours, particularly, uses a two-year window. So there is a little bit of false attribution in my mind currently within the institutional marketplace as far as trying to pin responsibility on the risk parity community, when, in my mind, the much more powerful short-term force in the market are CTAs.

    Of course, any discussion of how options traders react to these vertiginous downdrafts like what happened last week would be remiss if it ignored the role played by gamma-hedging options dealers. And while JPM’s Marko Kolanovic, who failed to predict last week’s blowup, said that this type of hedging played an outsize role in the selloff, McElligott warned that dealers could crash the market if SPX were to hold below 2,750, which would leave dealers dangerously out of position.

    We saw an enormous jump day over day with the S&P futures options and SPY ETF options cumulative, both delta and gamma, on the day. So SPX net delta moves down $460 billion. That’s a 0.1 percentile move since 2013. The day prior, that net delta was negative $55 billion. So just impossible, almost nine times growth over the course of the day with regards to how much delta was kicked off for sale from the options community yesterday in just SPX and SPY.

    And what that means from the delta side of things is that – and this is as of yesterday’s numbers – but S&P gamma is now at $24 billion per 1% move plus or minus. And those big strikes there are 2,800 and 2,750. And I think, judging by today’s spasms where it looked like we were going to break out, and then it looked like we were going to break down, and it looked like we were going to break out, and then it looked like we were going to break down, those levels kept us pretty well pinned.

    But the danger here is that, on a close below that pretty heavy open interest line of 2,750, the more we start slipping below, the further out of position the short gamma is. And the more it slips, the more you have to sell to stay hedged. And that’s always the danger of the options market.

    Looking ahead, the most pressing question on every investors’ mind is whether this week’s selloff was merely another dip to buy, or the beginning of the long-awaited shift away from the QE paradigm into a pre-recessionary QT mode. For what it’s worth, McElligott is optimistic that the market could hold up a little while longer, as discretionary managers have taken the opportunity to shrink their positions over the past few weeks, sapping demand for hedges and allowing them more leeway to get back in at a better price. 

    Meanwhile, the two-week blackout period for corporate buybacks is almost over. Just as it did during the Feb. 5 blowup, the evaporation of the corporate bid often contributes to more price instability. And while some corporations have managed to circumvent these rules via ASRs, once the corporate buyer returns in earnest, McElligott expects they will provide an added bulwark against the type of market chaos witnessed last week.

    I want to be as black-and-white on this as possible, and totally clear. If there was going to be a period of pullback with this tape, it was going to come in this two-week window where we are at peak buyback blackout. And that is absolutely where we are right now. The vast majority of S&P sub-industry levels are at effectively 100% blackout as of this week. Now, 10B5-1 plans allow corporates to buy outside of the blackouts, but with a number of limiting factors there. The bottom line: There still is a reduction in net corporate flow.

    That is a critical facilitator allowing this risk-off trade to really proliferate. And, just like February 5, this move was precipitated for macro purposes. This isn’t purely a sentiment trade. This certainly is negligibly about trade wars.

    However, another looming risk is the evaporation in demand for long bonds, which sent long-term rates moving higher earlier this month. As McElligott noted, much of this selling could be attributed to a mysterious foreign trader, which begs the question: Has the PBOC stepped up liquidations of its Treasury positioning (to be sure, the yuan has continued to weaken, which suggests that any selling by China has likely been relatively muted)? And if so, is China deliberately trying to crash the US equity market?

    Now, the market can go two ways. If people are really getting nervous with regards to another October volatility shock, and if people start taking chips off the table, because these stocks that have been most affected – all these momentum longs, all these gross tech stocks – if that starts bleeding into retail, then, yes, this could very well perpetuate. I do think the other angle here is that there has been a massive seller of the US long-bond contract in the market the past few weeks. And there are a number of folks fearing that it could be somebody – an entity overseas – that would really cause the fixed income world to further wobble.

    If we see the long end continue to sell off and the curve continue to bear-steepen, I think all bets are off and equities could absolutely continue trading lower. I personally believe that we are seeing de-risking now. And the de-risking is actually seeing money flow back into Treasuries.

    In McElligott’s view, traders trying to mitigate their exposure to equity risk should revive the bid for long-dated Treasurys. But if yields continue moving higher, all bets are off…

    Listen to the interview with McElligott below. It begins at the 59 minute mark:

    The podcast targeting pro finance and sophisticated investors, hosted by Hedge Fund Manager Erik Townsend

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Today’s News 14th October 2018

  • International Relations: The Calm Before The Storm?

    Authored by Thierry Meyssan via The Voltaire Network,

    All international problems are currently suspended, awaiting the results of the US mid-term elections. The partisans of the old international order are gambling on a change of majority in Congress and a rapid destitution of President Trump. If the man in the White House holds fast, the protagonists of the war against Syria will have to admit defeat and move on to other battle fields. On the other hand, if Donald Trump should lose the elections, the war on Syria will immediately be revived by the United Kingdom.

    The current situation – extending from the Russian response to the destruction of its Ilyuchin-20 to the US mid-term elections on 6 November – is uncertain. All the protagonists of the war in Syria are waiting to see whether the White House will be able to pursue its policy of breaking away from the current international order, or if Congress will become the opposition and immediately trigger the process for the destitution of President Trump.

    The origins of the war

    It has become clear that the initial project by the United States, the United Kingdom, Israël, Saudi Arabia and Qatar will not be realised. The same goes for France and Turkey, two powers that entered the war against Syria somewhat later.

    What we need to remember is not the way in which we were informed about the start of the events, but what we have discovered about them since. The demonstrations in Deraa were presented as a « spontaneous revolt » against « dictatorial repression », but we now know that they had been in preparation for a long time.

    Syrian anti-government protesters demostrate in Daraa

    We also need to free ourselves of the illusion that all the members of a Coalition, united in order to achieve the same goal, share the same strategy. Whatever the influence of one or the other, each State conserves its own history, its own interests and its own war objectives.

    The United States pursued the strategy of Admiral Arthur Cebrowski, which was the destruction of the State structures in the Greater Middle East. For this they relied upon the United Kingdom, which implemented Tony Blair’s strategy aimed at placing the Muslim Brotherhood in power throughout the region. And also on Israël, which rebooted the strategy of Oded Yinon and David Wurmser for regional domination. The necessary weapons were stored in advance by Saudi Arabia in the Omar mosque. Qatar stepped in by inventing the story about the children whose nails were torn out.

    At that time, Saudi Arabia was not seeking to impose a new form of politics on Syria, nor even to overthrow its government. Riyadh’s intention was exclusively to prevent a non-Sunni from becoming President. By some strange historical evolution, the Wahhabites, who, two centuries ago, considered both Sunnis and Chiites as heretics and called for their extermination if they failed to repent, are today presenting themselves as the defenders of the Sunnis and the killers of the Chiites.

    As for the tiny emirate of Qatar, it was exacting its revenge after the interruption of its gas pipeline in Syria.

    France, which should have taken part in the conspiracy by virtue of the Lancaster House agreements, was sidelined because of its unexpected initiatives in Libya. The Minister for Foreign Affairs, Alain Juppé, attempted to push France into rejoining the conspirators, but the ambassador in Damascus, Eric Chevallier, who could see the distortion of facts on the ground, resisted as far as humanly possible.

    When France was once again admitted to the group conspiracy, it continued its 1915 objective of the colonisation of Syria, pursuing the Sykes-Picot-Sazonov agreements. Just as the French mandate over Syria was considered to be transitory compared with the lasting colonisation of Algeria, it is considered, in the 21st century, as secondary to control of the Sahel. Besides which, while attempting to realise its old engagement, Paris pushed for the creation of a national home for the Kurds, on the model used by the British in 1917 for the Jews in Palestine. In order to do so, it allied itself with Turkey which, in the name of Atatürk’s « national oath », invaded the North of Syria in order to create a State to which the Turkish Kurds could be expelled.

    While the war objectives of these first four aggressors are mutually compatible, those of the latter two are not compatible with the others.

    Besides which, France, the United Kingdom and Turkey are three old colonial powers. All three are now trying to impose their power over the same throne. The war against Syria has thus reactivated their old rivalries.

    The Daesh episode within the war against Syria and Iraq

    At the end of 2013, the Pentagon revised its plans within the framework of the Cebrowski strategy. It modified its initial plans, as revealed by Ralph Peters, and substituted the plan by Robin Wright for the creation of a « Sunnistan » straddling Syria and Iraq.

    However, in September 2015, the deployment of the Russian army in Syria, as an obstacle to the creation of « Sunnistan » by Daesh, ruined the projects of the six principal partners in the war.

    Free Syrian Army, Jabhat al-Nusra, Ahrar al-Sham flags in Syria

    The three years of war that followed had other objectives – on the one hand, to create a new state straddling Iraq and Syria within the framework of the Cebrowski strategy, and, on the other, to use Daesh to cut the Silk Road that Xi Jinping’s China were seeking to reactivate – thus maintaining continental domination over the « Western » part.

    The Syrian / Russian victory and the reversal of the United States

    The affair of the destruction of the Ilyuchin-20 on 17 September 2018 handed Russia the occasion to terminate this extended war and come to an agreement with the White House to stand against other aggressors. This is a rerun, on a smaller scale, of the Russian / US reaction to the Suez crisis of 1956.

    Moscow has not only given the Syrian Arab Army anti-aircraft missiles (S-300’s), but has also deployed an entire integrated surveillance system. As soon as this system is operational, and Syrian officers have been trained to use it, which will take three months at the most, it will be impossible for Western armies to over-fly the country without permission from Damascus.

    President Trump announced in advance that he intends to withdraw US troops from Syria. He went back on this decision under pressure from the Pentagon, then agreed with his general officers to maintain pressure on Damascus as long as the United States were excluded from the peace negotiations in Sotchi. The deployment of the Russian armies – for which the White House had probably given its agreement – provided President Trump with the occasion of forcing the Pentagon to back off. It would have to withdraw its troops, but it could maintain the presence of its mercenaries (as it happens, these would be the Kurds and Arabs from the Democratic Forces).

    The Syrian Minister for Foreign Affairs, Walid el-Mouallem, speaking before the General Assembly of the UNO, demanded the immediate and unconditional withdrawal of the foreign forces of occupation, US, French and Turkish.

    If the United States leave, then the French and Turkish troops will be unable to stay. The Israëlis would no longer be able to overfly and bomb the country. The British have already left.

    However, Tel-Aviv, Paris and Ankara still hope that President Trump will lose the elections of 6 November and will be fired. They are therefore awaiting the results of this fateful election before they decide.

    If it happens that Donald Trump should win the mid-term elections in Congress, another question will arise. If the Western powers give up on the battle in Syria, where will they go to continue their endless war? This is indeed a reality on which all experts agree – the Western ruling class has become so swamped in bad blood and hubris that it is unable to accept the idea of being geared back behind the new Asian powers.

    Wisdom would dictate that once the war is lost, the aggressors should withdraw. But the intellectual disposition of the West prevents them from doing so. The war here will cease only when they find a new bone to gnaw on.

    Syrian President Bashar Assad, Russian President Vladimir Putin and Russian Defence Minister Sergei Shoigu watch the troops marching at the Hemeimeem air base in Syria, on Monday, Dec. 11, 2017

    Only the United Kingdom has given its response any thought. It is clear by now that although London maintains its diplomatic pressure on Syria via the Small Group, its attention is already focused on the revival of the « Grand Game » which saw the Crown confront the Tsar throughout all of the 19th century. After having invented the Skripal affair, and on the model of the « Zinoviev Letter », London has just ’caught’ the Russian Exterior Intelligence Services red-handed in their attempt to discover what is being plotted against them by the Organisation for the Prohibition of Chemical Weapons (OPWC).

    This geopolitical doctrine is independent of the events which serve as its pretext. The « Grand Game » was the strategy of the British Empire. Its resumption by the current United Kingdom is the consequence of Brexit and the policy of « Global Britain ». Just as in the 19th century, this anti-Russian configuration will lead in time to an exacerbated rivalry between London and Paris. On the contrary, should Theresa May fail, along with the questions concerning Brexit and the maintenance of the United Kingdom in the European Union, all these projections will be cancelled.

    If France is now studying the possibility of leaving the Middle East in order to concentrate on the Sahel, the position of the United States is a lot more problematic. Since 9/11, the Pentagon has enjoyed a certain autonomy. The ten combat Commanders of the armed forces no longer receive orders from the president of the Joint Chiefs of Staff Committee, but only from the Secretary of Defense.

    With time, they have become the veritable « viceroys » of the « American Empire » – a function which they do not wish to see reduced by President Trump. Some of them, like the Commander for South America (SouthCom), intend to continue with the Cebrowski strategy, despite the admonitions of the White House.

    So there remains much uncertainty. The only positive step taken concerns Daesh – for three years, the Western powers pretended to be fighting this terrorist organisation, while at the same time supplying them with weapons. Today, Donald Trump has ordered the cessation of this experience of an explicitly terrorist state, the Caliphate, and the Syrian and Russian armies have pushed the jihadists back. The Westerners have no desire to see their friends, the « moderate rebels », now qualified as « terrorists », turn up in their countries en masse. Consequently, whether they admit it or not, they hope they will all be killed in Syria.

    It is the US mid-term elections which will decide whether the war continues in Syria or move on to another battle field.

  • Meet The New Air Force Helicopters Guarding Nuclear Bases 

    Boeing Co. was awarded a large contract to supply the US Air Force with new helicopters to guard intercontinental ballistic missile bases across the US, the Pentagon said. 

    The contract calls for 84 Boeing MH-139, a 15-seat medium-sized twin-engined helicopter developed and produced by AgustaWestland in Northeast Philadelphia, will replace the service’s aging Bell UH-1 Iroquois fleet, currently guarding nuclear bases in Montana, Wyoming, and North Dakota.

    The Pentagon announced the contract on Sept. 24, is worth more than $375 million and covers the first four MH-139 helicopters, which the Air Force expects to take delivery by 2021. If all goes well, the full value of the contract would unlock, an estimated $2.4 billion, and supply the Air Force with 84 new helicopters and other maintenance services through 2031. 

    “Strong competition drove down costs for the program, resulting in $1.7 billion in savings to the taxpayers,” Secretary of the Air Force Heather Wilson said in a separate statement. 

    “A safe, secure and effective nuclear enterprise is job one,” Air Force Chief of Staff General David Goldfein, said. “It is imperative that we field a capable and effective helicopter to replace UH-1Ns providing security for our ICBMs [interconniental ballistic missiles] and nuclear deterrence operations.” 

    According to The Drive, the MH-139 for the Air Force will have high-tech sensors and machine guns on either side of the craft, among other weapons that are classified. 

     

    Depending on the MH-139’s mission, there are sub-variants of the helicopter for different tasks, such as search and rescue, transport, surveillance, and even an attack version. 

    However, its most visible mission will be conducting surveillance operations at ICBM silos and responding to any threats to those sites with machine guns and laser-guided missiles. There are also reports that some of these helicopters will be transporting nuclear warheads around the country.

  • Brexit Negotiators Poised To Miss Deal Deadline As UK Hardliners Rebel

    In what has become a depressingly persistent undercurrent to the ongoing Brexit negotiation trainwreck, it appears that UK Prime Minister Theresa May and her European counterparts, led by chief negotiator Michel Barnier, have once again set themselves up for failure. As both sides scramble to produce the framework for a “backstop” transition agreement, a process that has been fraught with seemingly intractable conflict despite the fact that it would be explicitly nonbinding, it’s looking increasingly likely that the UK and EU will miss another self-imposed deadline on Monday, as Bloomberg reports.

    Investors had hoped that the backstop agreement, or at least a rough outline of a backstop agreement, would be finalized by Monday, allowing both sides more time to figure out what the economic relationship between the EU and UK will actually look like after the transition has begun.

    May

    The sticking point for May is the fact that the absence of a clear Parliamentary majority for the conservatives has put her in the uncomfortable position of trying to cater to a plurality of groups with different, sometimes opposing, demands, both in her own government and among the EU. In a piece published on its ‘Brexit Blog’ late last week, ING explained that the two most controversial aspects of any potential transition agreement involve what has been called the Irish border issue, and exactly how vague the wording on future trade should be.

    We start with the Irish border issue:

    Firstly, there’s the so-called Irish backstop, where discussions are beginning to get very technical. We dived into this in more detail last week, but ITV’s Robert Peston reports that the EU could be prepared to accept British demands for an all-UK customs union to be built into the Irish backstop solution. In exchange, the UK would need to accept that regulatory checks could arise between Northern Ireland and the British mainland if they leave the single market in future.

    Some reports indicate this could be settled in time for the EU Council meeting next week, but as ever the challenge is ‘wording’ it in such a way that will convince MPs to vote in favour of the agreement. That’s where the second part of the agreement comes in – the political declaration on future trade – and this is where there seems to be more disagreement on the way forward.

    Then there is the ‘wording’ on future trade that would include a “temporary customs arrangement.”

    The idea is that this declaration will set out a vision for what the future trading relationship might look like.

    Bear in mind; this is simply a political statement of intent – the nitty gritty details will be negotiated during the transition period after March 2019. And being a political statement, none of it will be legally binding. In other words, it’s going to be vague – but deciding exactly how vague seems to be proving a bit of a dilemma.

    Plan A – at least from the EU’s perspective – is to make this as vague as possible, with reports suggesting a draft version originally due for release this week could contain as few as four pages and will be little more than a series of “annotated headlines”. The recent optimistic tone struck by the EU – including in the run-up to the recent Salzburg summit gives us a flavour of the sort of language the document is likely to contain. It’s likely to be heavy on words like ‘ambitious’ and ‘unprecedented’, but short on details on exactly what this means in practice.

    Reports also indicate the EU is open to an ‘evolution clause’ that would leave Brussels open to an improved offer if the UK changes its mind on what it wants. The hope is that all of this will be enough to convince MPs from across the Brexit divide that whatever the declaration ends up saying is not set in stone, and that their own aspirations for the future agreement are still alive.

    However, the UK government appears concerned that this vague approach will not be enough to win over lawmakers from the Northern Irish Democratic Unionist Party (DUP). DUP leaders are concerned about reports that the government now accepts the backstop would lead to regulatory barriers between Northern Ireland and the British mainland, and the party is reportedly considering voting against the forthcoming budget if the Prime Minister doesn’t change course.

    With that in mind, a government spokesman said on Monday that the UK is looking for more “precise” wording on future trade in the declaration, presumably in a bid to reassure DUP MPs that the Irish backstop will never be needed.

    Still, EU leaders bluntly informed May during last months’ Salzburg summit that her Chequers plan wouldn’t work. Yet, the EU’s push for a more vague ‘political statement’ might be accepted by hardline Brexit MPs, who also objected to Chequers…the whole situation is effectively one giant gordian knot of a problem.

    What’s worse for May, early Sunday in London, the Brexiteer hardliners published an open letter signed by 63 Conservative MPs, including David Davis, the former Brexit secretary, Jacob Rees-Mogg, the chairman of the European Research Group of Eurosceptic backbenchers and former Brexit minister Steve Baker, the former Brexit minister. At the same time, Anne-Marie Trevelyan, a pro-leave MP, published an editorial in the Sunday Telegraph demanding that any possibility that the UK could remain in a “temporary customs arrangement” after the Brexit transition period ends in December 2020 be stricken from the final agreement – because leaving open the possibility would be tantamount to ignoring the political will of the 17.4 million Britons who voted for Brexit.

    Meanwhile, Davis demanded in an editorial in the Sunday Times that Cabinet ministers should “exert their collective authority” and rebel against Theresa May’s proposed Brexit deal. All of this is happening amid even more conflicting reports, citing sources from the EU and sources from No. 10 Downing Street, affirming and denying that a deal had been reached.

    Underscoring the hostility to a deal, the leader of Northern Ireland’s Democratic Unionist Party said Sunday that she would prefer a “no deal” Brexit to a “backstop” transition agreement that would require any borders between Northern Ireland and the UK, arguing that this would amount to the “annexation” of Northern Ireland by the EU, per CNBC.

    Brexit

    While much work clearly remains ahead – and the eventuality that Parliament could at the last minute sink whatever backstop deal is “finalized” between May and the EU remains a very real possibility – analysts from ING still believe the backstop agreement will be reached. While that likely won’t happen this week, ING said, an agreement could be reached by an upcoming summit in November, with a Parliamentary vote taking place in December.

    As a reminder, here’s a timeline of important Brexit-related events, and an outline of four possible post-Brexit Day scenarios.

    One

    Brexit

    Still, after pricing in the backstop deal’s success in recent weeks, traders might not feel comfortable with the two sides blowing a deadline set for this coming week, as it could cause some to question whether Barnier was being unrealistically optimistic in September when he predicted that a deal would be reached by the end of this month because so far, negotiators have failed to prove to the market that they can square the circle and create an agreement that is palatable both to the EU and to the many opposing factions in the UK’s Parliament.

  • Cannabis Set To Disrupt $500 Billion Market Amid DEA Approvals And Canadian Legalization: Canopy Growth CEO

    The CEO of Canadian marijuana producer Canopy Growth says that marijuana is set to disrupt $500 billion in global markets.

    Bruce Linton – whose company recently shipped cannabis from Canada to the United States using a yet-undisclosed “DEA-approved partner,” told CNBC‘s Jim Cramer that the “back-of-the-envelope math” pencils out – between therapeutic cannabinoid treatments to a cultural shift from alcohol and tobacco to recreational pot use. 

    We disrupt alcohol potentially, cigarettes potentially, in terms of smoking cessation,” he told Cramer. “We really disrupt pharmaceutical, because whether or not you’re geriatric care, you’re dealing with arthritic conditions, you’re someone who can’t sleep, you’re going through an oncology treatment, I think you’re going to find cannabinoid therapies really hit there.”

    “And so you add all that together, plus the existing $200 billion illicit market, that pretty quickly gets you up around $500 billion,” Linton continued. “It sounds like a ‘How could it be?’ but just do a bit of the back-of-the-envelope math. It’s not crazy.

    Canopy made headlines last week after announcing several-billion-dollar investments from Corona parent company, Constellation Brands, as well as legal shipment of marijuana, a Schedule 1 drug, into the United States. 

    “Under [Drug Enforcement Administration] approval, we shipped, for the first time, legally — and I highlight ‘legally’ — cannabis from Canada to the U.S,” Bruce Linton, the co-founder, Chairman and CEO of Canopy Growth, told CNBC’s Jim Cramer.

    “The DEA-approved partner, which we haven’t announced yet, can actually begin to do medical research, clinical trials if necessary, [and] create the data set that enables people to know when, what, where, and maybe it can become federally regulated in the U.S. with some input that way,” Linton said in an interview on “Mad Money.” –CNBC

    The positive news for Canopy comes on the heels of competitor Tilray announcing DEA approval to import cannabis into the United States for medical research at the University of California San Diego’s Center for Medicinal Cannabis Research. As CNBC notes, California is one of eight states to fully legalize medical and recreational marijuana use, while thirty states currently legalize some form of medical marijuana. 

    Canada will fully legalize adult marijuana use next Wednesday, October 17, which is expected to result in a massive windfall for producers such as Canopy. 

    Linton says that Canada’s legalization has forced governments worldwide to consider how they can get in on the action. 

    “Last week I was in the EU, the U.K. They know about Oct. 17 intimately and they’re trying to figure out, ‘Hm, if we’re a government or businesses, how do we quit ignoring cannabis and govern it, regulate it, tax it and turn it into something that might be medicinal and for sure a much better formatted product for a party?'” he said.

    “And so what’s going to be the big bump isn’t just Canada,” he said. “If we do it right, Canopy leads. That gives us the position globally that then, all of a sudden, you add a zero or two to the number of people we’re trying to serve.”

    Watch: 

  • S-400s Don't Solve India's Geostrategic Dilemma

    Authored by Pepe Escobar via The Asia Times,

    …but Modi emphasizes that Russia has always ‘stood shoulder-to-shoulder with India in the energy sector and our goals’…

    The 2018 India-Russia summit may have turned out to be one for the ages. The stakes superficially centered on whether India would seal the acquisition of five S-400 missile defense systems from Russia for $5.43 billion.   

    The deal was clinched immediately after Indian Prime Minister Narendra Modi and Russian President Vladimir Putin finalized their get-together in New Delhi. Negotiations started in 2015. The S-400s will be delivered in 2020.

    So what’s next? Trump administration sanctions against India under the Countering America’s Adversaries Through Sanctions Act (CAATSA)?

    If only such a geopolitical game-changer was that clear-cut.

    This is a weapons deal that involves Russia, India and China – a key, if not the key BRICS and Shanghai Cooperation Organization (SCO) triad. The new reality is that all of these BRICS/SCO members are now able to deploy the highly effective S-400s.

    But that does not mean that two of them – India and China – would necessarily have to deploy S-400s against each other in case of a unilateral attack. 

    Putin was adamant to stress that Russia will turbo-charge bilateral cooperation with India not only in the SCO but at the UN and the G20 as well. Modi for his part reaffirmed both India and Russia favor a multipolar world.

    Modi hopes Russia would help India develop its space program – which includes New Delhi possibly sending Indian astronauts into space by 2022. He emphasized Russia has always “stood shoulder-to-shoulder with India in the energy sector and our goals.”

    “Our goals” crucially include Russia and India in synch in terms of preserving the JCPOA, known as the Iran nuclear deal. An inevitable consequence is that India will not refrain from buying Iranian oil and gas, even if threatened with American sanctions. 

    The Trump administration might even waive sanctions against India if – according to the National Defense Authorization Act – President Trump decides that New Delhi has not undermined US strategic interests by buying Russian missiles.

    The verdict, of course, remains absolutely open. 

    Make your mind up, New Delhi

    At the Russian-Indian Business Forum, Economic Development Minister Maksim Oreshkin was adamant that India and Russia are bound to increase trade and investment towards a “trade turnover of $30 billion… and increasing investments to $50 billion by 2025.”

    New Delhi suggested last month the creation of a special economic zone (SEZ) for Russian business – on top of an already discussed “green corridor” for smoother trade.

    All that fits the framework of historically warm Russia-India relations. Yet the Big Picture is way more nuanced as it highlights the finer points of Eurasia strategic balance between the three big BRICS/SCO partners.

    Putin and Xi Jinping have already established that the New Silk Roads, known as Belt and Road Initiative (BRI) and the Eurasia Economic Union (EAEU) will be merging in multiple fronts. 

    That would leave New Delhi as the odd partner out. India is not aligned with BRI and is frankly opposed to one of BRI’s flagship projects; the China-Pakistan Economic Corridor (CPEC). Nothing that could not be solved by Beijing, for instance, fine-tuning the CPEC route bordering Kashmir.

    Moscow and Beijing for their part are extremely aware that India may be used by Washington as a Trojan Horse to undermine Eurasia integration.

    Evidence to support it include the recent Communications Compatibility and Security Agreement (COMCASA) which de facto converts New Delhi into a US military ally; the new status of India as Washington’s only “major defense partner”; and India’s role in the Trump administration’s revival of the Quad (alongside Japan and Australia), something interpreted by Beijing as an attempt to encircle it in the South China Sea. 

    The problem is the ultra-nationalist Hindus in Modi’s BJP party actually support encirclement and/or containment of China. The never enounced key reason is economics. Were India to join BRI, the BJP fears a Made in China onslaught would simply destroy Indian domestic industries, much as what happened to some industry sectors in BRICS member Brazil, China’s top trade partner in Latin America. 

    What Beijing and Moscow want is for their comprehensive strategic partnership – and synergy – to advance a BRI/EAEU-led Eurasia integration process. It’s not clear this is India’s strategic priority. 

    Washington’s strategic priority is quite clear: divide and rule, by all means, the BRI-EAEU-BRICS-SCO concerted drive for Eurasian integration and global multipolarity.

    So, with the S-400s a done deal, the ball really is in New Delhi’s court. A much vaunted, official  “multi-alignment” policy still leaves the fundamental geostrategic question up for grabs; will India lean towards American-style Divide and Rule, disguised as Balance of Power, or in favor of a multi-polar drive for Eurasia integration?   

  • Meet The Finance Professor Exposing Rigged Markets One Academic Paper At A Time

    Finance professor John Griffin, along with his doctoral student companion, Amin Shams, were the two academics that drew market-moving conclusions about bitcoin last year, while the digital currency was trading around $20,000. After sifting through 2 terabytes of trading data, they alleged that bitcoin was being manipulated by someone using the cryptocurrency Tether to purchase it. Tether remains a relatively little-known crypto, which is pegged to one US dollar. Part of its appeal is that it can “stand in” for dollars when necessary, according to Bloomberg.

    Griffin and Shams authored a paper in June, with the results of their findings ultimately catalyzing many digital assets to move lower, despite the fact that the CEO of Tether publicly denied that its currency was used to prop up bitcoin.

    Griffin works at the University of Texas at Austin, and has become quite an unpopular figure on Wall Street for similar work he has done in the past on ratings companies, the VIX and investment banks. In most of his findings, he claims that these well-known financial instruments and players are, in one way or another, rigged. And the professor seems to enjoy exposing precisely that: rigged, manipulated markets and shady players.

    “I not only want to understand the world, but make it better,” he told Bloomberg.

    Griffin’s work has become popular reading within the DOJ and the Commodity Futures Trading Commission, according to Bloomberg. These regulators – many of them low on resources, time and staff – welcome any additional help they can get (the SEC’s budget has forced it into a hiring freeze and the CFTC budget was cut by Congress in March of this year).

    John Reed Stark, a former attorney in the SEC’s enforcement division, stated: “It’s incredibly helpful to have an expert of Griffin’s caliber.”

    After spending the beginning of his tenure as a professor tackling little-known and inconsequential parts of the market, he started to feel the need to take on bigger tasks. In fact, he claims that part of the Bible spoke to him, when he read a passage that motivated him. It stated “Have nothing to do with the fruitless deeds of darkness, but rather expose them.”

    His targets – like the VIX index, owned by CBOE Global Markets – say that he misreads data. In response to work that he did on the VIX, CBOE stated his “…academic paper’s analysis and conclusions are based upon a fundamental misunderstanding about how VIX derivatives are traded and settled.”

    In 2017, Griffin’s work revealed that one or more market participants had been trading S&P 500 options in a way to artificially boost or depress the VIX, which would then have an impact on VIX futures. They argued that the volume of S&P 500 options would spike suspiciously at times, but only in the contracts that were used to help price the VIX. He claimed these trades simply didn’t make sense unless somebody was trying to manipulate the VIX.

    And he’s not buying the explanation given to him by the CBOE: “There is no doubt we understand how the market works,” he said.

    As a result, the CBOE has been sued many times over for this supposed manipulation. Meanwhile, riffin says he’s not going to work with any individual plaintiffs, but he does not rule out the possibility that he may work as a consultant in the future – if he can get paid.

    Every time he publishes a new paper, he gets more attention. His paper on the alleged bitcoin manipulation has been downloaded more than 20,000 times and was cited by the SEC when the regulator rejected a bitcoin ETF that would have made it easier for retail investors to trade the crypto.

    And as he continues to expose one fraud after another, Griffin – unlike Goldman – is truly doing God’s work. 

  • The New 'Disappeared'

    Authored by Nina L. Khrushcheva via Project Syndicate,

    From China to Saudi Arabia, today’s authoritarian regimes are suddenly and covertly abducting people, including well-known figures and high-ranking officials, to be detained or worse. It’s an old and effective tactic for silencing opponents, but those reviving its use may end up regretting their decision.

    From the military juntas that ruled Argentina and Chile in the 1970s and 1980s to Joseph Stalin’s iron-fisted regime in the Soviet Union, dictatorships have a long history of making their detractors “disappear.” Today, this sinister practice seems to be making a comeback.

    Under the military regimes in Chile or Argentina, a person might be tossed into the sea from a helicopter, never to be found. They might be killed and then burned beyond recognition or coated in lime, to accelerate decomposition, and buried in an unmarked grave.

    In Stalin’s Soviet Union, someone could be picked up and taken to the Lubyanka (the KGB headquarters) or some other nightmarish facility at any moment. During the purges of the 1930s and later, members of the Communist Party were particularly vulnerable, and millions of Soviet citizens disappeared forever in prisons or the gulag.

    Today, modern authoritarians are reviving such behavior, suddenly and covertly snatching people, including well-known figures and high-ranking officials, to be detained or worse. In many cases, the “vanished” do eventually resurface, but with an apparently transformed perspective on their past work or the government that detained them. Here, China and Saudi Arabia stand out – though they are by no means alone – for orchestrating a series of increasingly brazen abductions or vanishings of their detractors.

    China was behind last month’s disappearance of Interpol President Meng Hongwei on a trip from France, where Interpol is based, to Beijing, where he also served as vice minister of public security. Meng’s abduction was particularly shocking, because many Chinese trumpeted his 2016 appointment to Interpol’s highest post – which made him the first Chinese citizen to lead a major global institution – as a sign that the country had finally arrived at the top tier of the international order.

    Yet Chinese President Xi Jinping was willing simply to throw away that public relations victory. Eventually, it was announced that Meng had been detained and was being investigated for bribery. The decision, justified as part of China’s ongoing anti-corruption campaign – an endeavor that critics say is a cover for eliminating political figures disloyal to Xi – revealed an utter lack of regard, or even contempt, for world opinion.

    In fact, Xi is something of a serial kidnapper. Since he came to power in 2012, all sorts of people – from small-scale book publishers in Hong Kong (including some holders of non-Chinese citizenship) to Chinese business leaders – have been covertly kidnapped and returned to China. After a long period of silence and seclusion, they emerged to renounce their past work.

    That is what happened to Fan Bingbing, China’s biggest movie star, who disappeared last July, when her previously very active account on the Sina Weibo social media platform (China’s answer to Twitter) suddenly went silent. No one knew what happened, but it was assumed that the government had something to do with it, and businesses with which she had spokesperson deals cut ties with her.

    Finally, Fan resurfaced earlier this month, issuing a groveling apology for having evaded taxes, for which she will now face massive fines. Tellingly, her statement included plenty of praise for the Communist Party of China, which she credited for her success as an actress. It was all depressingly familiar, recalling as it did the pathetic confessions of Nikolai Bukharin, the editor of the Communist Party newspaper Pravda, and others during Stalin’s purges.

    Saudi Arabia has also executed a series of high-profile, politically motivated kidnappings. Last year, Saudi Arabia’s Crown Prince Mohammed bin Salman ordered the detention of Lebanese Prime Minister Saad Hariri, who was on an official visit to Riyadh. Hariri was isolated even from his bodyguards and forced to resign. Weeks later, and evidently enlightened to his captors’ satisfaction, he was permitted to return to Lebanon and resume his role as its elected leader.

    Then, last week, Jamal Khashoggi, an exiled Saudi journalist, vanished after entering Saudi Arabia’s consulate in Istanbul to obtain a document confirming his divorce, so that he could marry a Turkish woman the next day. His fiancée waited at the consulate’s entrance; he never reemerged.

    Khashoggi’s disappearance is further evidence of how little regard today’s authoritarians have for national borders when it comes to silencing their detractors. Precisely what happened to Khashoggi is still unknown, but Turkey’s government, led by President Recep Tayyip Erdoğan, has insisted that he was killed while in the consulate.

    According to the Turkish authorities, two teams, totaling 15 people, flew from Riyadh to Istanbul on the day of Khashoggi’s appointment and left within hours. This, too, is grimly familiar to Russians: Stalin also had special assassination teams, one of which carried out the murder in Mexico of his archenemy, Leon Trotsky. Unsurprisingly, the Saudis have denied any wrongdoing. Khashoggi, they claim, left the consulate.

    Russia’s own experience with government-orchestrated disappearances is not limited to the past. President Vladimir Putin’s regime has also been known to target detractors for elimination on foreign soil, as allegedly happened with the nerve-agent attack on the former Russian spy Sergei Skripal and his daughter Yulia in the United Kingdom in March.

    The question is whether autocrats’ contempt for borders or sovereignty in silencing opponents is worth the cost. In the majority of the Western world, Putin is regarded as an outcast, Xi is flirting with a similar loss of credibility, and Prince Mohammed’s reputation as a reformer has been severely damaged, perhaps beyond repair. All of them may soon face a realization like that of Joseph Fouché, Napoleon’s police chief, after the abduction and sham trial of the Duke of Enghien: “It was worse than a crime; it was a mistake.”

  • The Perfect Storm: Trade War Could Have "A Catastrophic Effect" On Toy Industry

    The American toy industry is headed for turmoil as the Trump administration has placed tariffs of up to 25% on about half of all goods shipped from China. 

    Barbie dolls, Spider-Man action figures, and Transformers have so far escaped the wrath of President Trump’s new tariffs but could be affected if a full-blown trade war erupts next year between the world’s two largest economies. 

    According to the South China Morning Post, the latest round of trade tariffs has already affected children’s dress-up clothing, board games, and art item, with the US imposing a 10% tariff on those items last month. There are indications that these tariffs could rise to 25% on January 01. 

    If a full-blown trade war breaks out, it would cut nearly $10.8 billion out of the US economy and lead to a devastating loss of 68,000 American jobs, said Rebecca Mond, vice-president for federal government affairs at the Toy Association, a US-based trade organization. 

    She said tariffs would have a much more significant impact on China.

    “About 85% of all toys sold in the US annually are produced in China.” 

    “China is an established manufacturing base. The infrastructure is there. It’s not a base that’s easily moved,” said Mond. 

    “Even with the increased duty rate, it’s still more expensive to bring manufacturing here in the United States than it would be to stay in China.” 

    A full-blown trade war has been forecast for 2019 by JPMorgan. 

    Mond said many toy companies are taking a wait-and-see approach for the remaining months in 2018. She added that shifting supply chains is not an easy task. 

    She added: “Are these tariffs going to last?” If they’re not, it certainly doesn’t make sense to change manufacturing for a short-term issue.” 

    Toys are one of the largest exports to the US from China, on a per annum basis. 

    Finished toys were the fourth largest product category imported into the US from China last year, accounting for $12.2 billion in products, according to the International Trade Commission. 

    Toys accounted for $24.3 billion in US sales in 2017, according to Euromonitor International. 

    The threat of a full-blown trade war could bring severe stress to toy producers at a time when the American toy industry is still recovering from the collapse of Toys “R” Us. 

    “The imposition of tariffs would come at a historically inopportune time for our industry considering the recent bankruptcy” of Toys “R” Us, Corinne Muray, director of government affairs at Mattel said in an open letter to the US Trade Representative in August, indicating that tariffs on children toys would be disastrous for the industry. 

    The Perfect Storm: The liquidation of Toys “R” Us “is already having a devastating impact on juvenile products and toy industries. Levying what is tantamount to an additional tax on the US industry at this time could have significant negative ramifications,” Muray added.

    Mattel, the manufacturer of Barbie dolls and DC Comics characters, noted the company would have a tricky time rerouting its supply chains, and tariffs would ultimately punish the consumer by higher prices and reduced choice. 

    Last month, the Toy Association sent a letter to the Office of the US trade Representative indicating that Chinese producers have adapted to the “seasonal nature” of the industry, in which they make toys for six months of the year and produce other goods in the other half.

    “Of even greater importance to US consumers, the US toy industry has invested in ensuring that Chinese suppliers produce toys that comply with strict US safety standards that protect America’s children and families while at play,” the Toy Association said in its letter. “Establishing a new manufacturing base elsewhere could thus force companies to move hastily (and at significant cost) to identify and educate new manufactures of these requirements and develop relationships with them to ensure that toys are, in fact, compliant.”

    Hasbro CEO Brian Goldner spoke to analysts about shifting production away from China, but he made it clear that the shift would be to other low-wage countries — not back to the US. He said it would take many years to shift a small fraction of its supply chain in China elsewhere. 

    “There is absolutely no way that Hasbro can shift from China to another low-cost country overnight,” said Lutz Mueller, CEO of Klosters Trading, an expert on the industry. “They do not have infrastructure or supply chain in place.” 

    Lutz said small to medium-sized toy companies do not have the financial mobility to rework supply chains out of China; they could quickly go out of business if a full-blown trade war develops. 

    As for the mega toy companies, Mattel was already struggling before the Toys “R” Us implosion. Its stock is down -5.59% YTD with short-interest growing to about 16.40%. 

    Lutz also said Mattel would not file for bankruptcy, but a full-blown trade war would revive talks about it being acquired by its rival, Hasbro.

    “Mattel is already teetering on edge,” he said.

    “Hasbro has been trying to buy it for a while. Whether it can survive as an independent company with tariffs is a question mark.”

    Here is how the story could play out: Multinationals reworking supply chains from China would likely disrupt trade flows. Already, global growth momentum is slowing from trade uncertainty and will continue into 2019. What comes next you ask? Well, a global growth scare sometime next year, and it could be just enough to reprice US risk assets.

    As for the toy industry, if a full-blown trade war breaks out in 2019, like JPM, thinks, then it could spell disaster for yet another industry that is struggling to survive in President Trump’s trade war. To note, America’s farmers just received a bailout. Storm clouds are gathering. 

  • America, From Sears To Google (Or Why Silicon Valley Is Set Up For "The Mother Of All Government Smack-Downs")

    Authored by Peter Zeihan via Knowledge Leaders Capital blog,

    Today’s story begins with the once-behemoth that is the American retail firm, Sears. In the last week of September Sears’ stock dipped below $1 a share, reducing the company’s market value below $100 million. Sears may still linger on a bit, but when a big firm falls into penny-stock territory, its outright liquidation is a foregone conclusion.

    Sears (originally Sears, Roebuck and Company) is the iconic store of the American modernization experience. As a relative latecomer to the world stage, Americans got in on the industrial revolution significantly after most Western European nations. The vast majority of Americans lived on farms until late in the 19th century. Urban Americans had access to manufactured goods, but in rural regions most people made their own clothes and tools – or tapped the expertise of craftsmen in local towns. Most of these in-town purchases were managed via general stores where managers, knowing farmers had no alternatives, gouged on pricing, credit terms and selection.

    Enter Sears.

    Sears sourced manufactured goods from American cities (and abroad) and built a distribution network deep into every nook and cranny of the American territories. Starting with luxury goods in 1886 and rapidly moving into everyday products, by the turn-of-the-century Sears’ 500+ page mail order catalogues had become ubiquitous not just in cities, but in farmhouses. It was Walmart and Amazon all in one. Sears completely overhauled what Americans considered to be centuries-old economic norms and pushed cheap, high quality manufactured goods into every single home. Sears quickly became America’s largest firm and largest employer. Quite unwittingly, Sears started the United States on the long path to urbanization, the industrial age, and the destruction of the local retail store.

    (Incidentally, when the British Empire brought its manufactures to German lands, the economic dislocation helped start a German civil war. So anytime you think Americans can’t handle transformative economic stress, please try to keep it in perspective.)

    Sears’ near-death today is part of a similar economic transformation. Just as Sears was a physical manifestation of the Industrial Revolution, Sears’ end is part of the Digital Revolution. Gathering, processing and distributing information has been the bugaboo of corporate systems as long as there have been firms with a reach further than they could see. The steamship and telegraph obviously helped, but managing anything big first and foremost requires an information system.

    The Digital Revolution thus far has reduced the cost of storing information to nearly zero. In the early 1980s storing a gigabyte of data cost roughly $500,000 and I think that’s without accounting for inflation (economists and techies don’t always have the best relationships when it comes to data comparisons). Today storing that same volume of data costs roughly three cents. Information transfer costs follow a similar path (part of why all publicly available email clients are available at no-cost).

    With information now being in effect free, the biggest restraint on industrial expansion became … humans. Someone still needs to analyze and distribute the data, and then check up on the results. Humans in the data chain have become the general store managers of our time, gatekeepers to the consumers that escalate prices. Enter algorithms, designed from day 1 to remove humans from the data management equation. With the elimination of those pesky human barriers, the Digital Revolution reached out into the real world of sales and distribution and killed the job-destroying monster that preceded it. That’s remade how we design, order, manufacture, transport and warehouse goods. It allows us to instantly transmit architectural plans, military orders, payroll, and cat videos as well as get two-day (or less) deliveries for free.

    The problem with algorithms is twofold. First, we have yet to figure out how to program in value judgments and ethics. Second, anything that introduces a hiccup into the information flow – say, fact-checking – increases the cost to something above zero. Just as Sears’ systematically cut out costs, algorithms and the human decision-makers who design and manage them see the human element as a block on progress. Something to be ruthlessly excised.

    Photo courtesy of Peter Zeihan

    That has set up Silicon Valley for the mother of all government smack-downs.

    Let’s divide the American political spectrum into four rough blocks: the center-left, center-right, populist-right, and populist-left – and then look at how their view of Silicon Valley has radically shifted during the past three years.

    America’s center-left originally adored Silicon Valley because they were corporate titans with social agendas that matched the center-left’s general political views – particularly when it came to social policies on issues such as education, gay rights, and multiculturalism. The center-left – epitomized by politicians such as Chuck Schumer and Diane Feinstein – saw Silicon Valley as remaking corporate America from within.

    But as information transmission became free, this happy marriage collapsed. Silicon Valley resisted anything that might infringe upon information flow, including flows that harmed issues the center-left valued. For example, Russian attempts to spawn race riots or shift the direction of a presidential campaign, or the ISIS live-streaming of executions, or disinformation campaigns blaming train derailments on Hilary Clinton after she lost the election. Consequently, the center-left hasn’t simply dropped its support for the Valley, it now sees the Valley as a threat to democracy itself. The Valley’s chronic misogyny in the age of MeToo doesn’t help the Valley’s case with the center-left either.

    America’s center-right – represented in Washington by folks such as Paul Ryan and Mitch McConnell – similarly were wedded to Silicon Valley’s aura. In the Valley the center-right saw a heavenly manifestation of what could be achieved with American know-how and new technology and a spirit of entrepreneurship in a low-regulatory environment.

    This happy marriage has also ended. At first it was about politics: Valley CEOs started to get a bit too public with their enthusiasm for left-leaning issues, and charges erupted that some in the Valley were censoring right-leaning political viewpoints on platforms they controlled. But the center-right’s concerns soon deepened to something much more fundamental: much of the Valley committed to never working for the American government – most notably the intelligence community and the Defense Department. But Valley services remained fully available for sale so their work could benefit other government’s programs.

    The idea that the political liberalism of Silicon Valley is better served by allying with Xi Jinping’s dissident eradication systems or Vladimir Putin’s systematic repression than the U.S. military requires mental contortions the center-right considers unfathomable. The center-right now doesn’t merely question the Valley’s ideology or even its patriotism, but its sanity. The most pro-business part of the American political spectrum is now firmly anti­-Silicon Valley. Concerns about cybersecurity and the regulations those concerns will likely spawn is only the icing on the cake.

    But as much credence as there is to the points of America’s centrist politicians, the concerns of the American populists are actually more valid.

    The populist right started out furious with Silicon Valley. Whether the politician is Ted Cruz or Donald Trump, the Main Street verses Wall Street discourse is not only a powerful one, it is broadly accurate. The current manifestation of Silicon Valley is fundamentally designed to remove as much human labor from the economy as possible. It – statistically – is the greatest job-destroying machine in American history.

    The populist left is, if anything, even more angry at the Valley. Algorithms and robots don’t pay taxes, but their profitable outputs still accrue. This concentrates the income of what used to benefit human laborers to the operators and designers back in San Jose. Politicians like Bernie Sanders and Elizabeth Warren are fundamentally correct when they assert this is a leading reason for America’s deepening economic inequality.

    All four factions are correct.

    All four factions are edging toward policies that would revoke the Valley’s unlimited license via some sort of constraining regulation.

    Photo courtesy Peter Zeihan

    Tesla is probably in the greatest danger. Technically, Tesla is a car firm, but its valuation and finance-raising systems mirror Silicon Valley rather than Detroit. That gives it access to ridonkulous amounts of cash – something necessary to pioneer fundamentally new technologies – but lands it with the metrics of a conventional automotive firm. Therein lies the rub.

    When it comes to evolving ethics in a dynamic regulatory environment, most investors go with what they know. They know Tesla is a badly-run company that has yet to figure out how to move metal around its own factory floor. They know Tesla has almost never met a production goal. They know Tesla cannot break into the mass market (the cheapest available Model 3 is at fifty grand, with the subsidy). They know Tesla’s technology and materials science is insufficient to its goals. They know Tesla faces stiff, rising competition from more experienced market players.

    They know Tesla is led by a CEO whose social media strategies mirror a broadly-disliked president. They know Tesla’s CEO has bet the firm’s future on a political ideology that provides subsidies that will not last. They know Tesla’s CEO sees no problem cross-subsidizing the firms of family members. And they know Tesla’s CEO has settled with the SEC on charges of stock manipulation which cost the firm that has never made a profit $20 million. There is no shortage of preexisting business norms and regulations that could bring Tesla down. Should the investment community ever believe Washington is coming for Silicon Valley, they will ditch the weak players first. It doesn’t get weaker than Tesla – ergo why the short-selling of Tesla is already so intense.

    Facebook comes in second, and not simply for the role they’ve played in Russiagate. The firms’ unfettered and enthusiastic raping and selling of customer data has not simply shown no ethical constraints, but we now know Facebook actively markets its user data to scammers. Not via the web – dark or otherwise – but by sending sales reps to scammers’ convention and closing deals in person. The public trust has been lost. The question in my mind isn’t will Facebook be eclipsed and displaced by a rival, but will there be prison time for some of its executives?

    Twitter may have a brighter future. Unlike Facebook, TeamTwitter admitted the role it played in Russiagate fairly early on and has taken steps to roll back the damage. Such public admissions combined with a sense of genuine regret – or at least a reasonable digital facsimile of regret – stand in stark contrast to Facebook whose grudging, plodding steps have the feel of a six-year-old who thinks moving a single pair of underwear to the hamper has cleaned up his room and thus should be allowed to go back outside to play. Are Twitter’s actions and contrition deep and fast enough? That’s a political question, but I give points for effort.

    One likely path forward in regulation is the modification of Section 230 of the Communications Decency Act. To make a very long and technical legal explanation short, Section 230 stipulates information technology platforms are not publishers, and so are not responsible for any content they pass along. Without 230 we’d not have an Internet economy since all our infotech platforms would be liable for the accuracy of everything in every web page, blog post, pop-up ad and email.

    To date, there have only been three carveouts: copyright infringement, child pornography and sex trafficking. Silicon Valley fought those carveouts tooth and nail, asserting first-amendment rights issues, but mostly being concerned about costs. The hilarity of deliberate inaccuracies currently punctuating American political information systems – Russiagate being the prime example – are pushing many political factions to consider a fourth carveout for foreign election interference. And while with some very skilled coding an algorithm can be taught to look for prostitutes, I’m guessing that determining whether an ad that slams or celebrates Hillary Clinton or Donald Trump is accurate will require the sort of judgement call only a human can make. And humans don’t work for free.

    Amazon probably faces less pressure, and probably has more time. Yes, Amazon Prime and related subsidiaries are a very visible part and parcel of the whole job-destroying ethos that motivates Silicon Valley. But three issues pop up:

    First, the damage to American retail is largely done. A stiff roll-back at this point would probably be counterproductive. And this is hardly the first American retail revolution: general stores to Sears to Walmart to Amazon. At each step the process is more capital intensive but less labor intensive with slimmer margins. Where do you draw the line? Do you draw a line? (A change to how Amazon is taxed, however, is an excellent idea).

    Second, Amazon would operate in the red if not for a single unit that has nothing to do with getting a hairdryer to you: Amazon Web Services. AWS is the data management portion of Amazon which is wrapped up in nearly every data flow for every business in the country. It is well-run, faces competition, and has next to nothing to do with the retail arm. Splitting the two so that the wildly-profitable AWS cannot cross-subsidize the barely profitable (and until recently, unprofitable) Amazon Retail makes a wildly great deal of sense for all players. It would certainly preserve the value-added portion of Amazon that generates lots of new sources of economic activity rather than gutting old sources.

    Third, Amazon is everywhere. I don’t say this to imply U.S. government entities cannot bring it down, but instead that Amazon’s retail activities are in every American county, complete with dozens of distribution centers and tax relationships. Should the regulatory floodgates open the result will be a thick, self-ambulatory tangle of regulations at the city, country, state and national level. It will be a rancid mess that Amazon leadership will be able to exploit to buy time and – most importantly – to shape in a way to mitigate end-impacts upon the firm.

    Of the big boy digital firms, that leaves Google, whose recent actions put it into a category all its own:

    Recent defections from Google’s development teams have exposed the firm’s work on a project they call Dragonfly, a search engine product for the Chinese market. Allegedly, Dragonfly tags certain search terms the Chinese government chooses that it thinks might indicate dissident behavior such as “how do I get a Canadian visa?” or “what happened in Tiananmen Square in 1989?” or “what is Falun Gong?” It then packages the request with other search data on the person in question, complete with IP and physical addresses and phone numbers and forwards the information on to the Chinese state. It’s a degree of privacy violation and government monitoring of civilians that would have disgusted Orwell.

    If – and I emphasize the word “if” because I do not have a Dragonfly-style program covering Google HQ – Dragonfly is real, Google is in serious trouble. Collaborating with a dictatorship that is sliding into a cult of personality so complete Hitler would have salivated over the program violates every ethical and political norm of every political faction in the United States. Anything that puts Elizabeth Warren and Ted Cruz on the same side during Senate hearings should get everyone’s attention. And Google’s executives’ refusals to confirm or deny Dragonfly’s existence while under oath before Congress tends to shift my thinking that this is less bureaucratic bungling and more greed so all-consuming it constitutes treasonous behavior. It is exactly the sort of massive corporate miscalculation that has triggered catastrophic government crackdowns on major American firms in the past. The breakups of Standard Oil and Bell come to mind.

    And it would happen under President Donald Trump. Make no mistake. Trump is no longer part of the party of the businessperson. Things in America have changed in politics too…

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Today’s News 13th October 2018

  • America's Disastrous Occupation Of Afghanistan Turns 17

    Authored by Doug Bandow via The American Conservative,

    …And the Taliban are in their strongest position in just that many years.

    America has now passed the 17-year mark in Afghanistan. U.S. troops have been fighting there for longer than the Revolutionary War, Civil War, World War I, and World War II combined. Yet Washington is further away than ever from anything that might pass for victory.

    More than 2,300 American military personnel and 3,500 contractors have died in Afghanistan. The latest death occurred last week – Specialist James A. Slape from Morehead City, North Carolina. Another 1,100 allied soldiers have been killed, almost half of them from the United Kingdom. More than 20,000 Americans have been wounded. The direct financial cost has amounted to $2 trillion, with another $45 billion budgeted for this year.

    And for what?

    After so many years of senseless combat, Erik Prince’s proposal to turn the conflict over to contractors almost sounds reasonable. His lobbying efforts in Kabul have not been notably successful, but some day American personnel will come home. And then Washington’s friends in Afghanistan will find themselves on their own.

    Seventeen years ago the Bush administration was forced to act. After the 9/11 attacks, it was imperative to disrupt if not destroy al-Qaeda and punish the Taliban regime for hosting terrorist training camps. Washington quickly succeeded: al-Qaeda was degraded and dispersed, the Taliban was overthrown and punished. Washington should have left as quickly as it came. But the Bush administration had other hopes: to create a friendly, liberal, democratic state in Central Asia.

    If there was ever a chance to establish a stable regime in Kabul, it was right after the Taliban’s ouster. However, the Bush administration immediately turned to Iraq, which had nothing to do with 9/11. That shift allowed for a Taliban revival. Even after twice increasing force levels—which peaked at 110,000 U.S. and 30,000 allied troops in 2011—the Obama administration was only able to limit the insurgency’s reach. Around that time I twice visited Afghanistan, and found that private, off-the-record opinions of allied military personnel, civilian contractors, and Afghan officials were uniformly pessimistic.

    Most saw the operation as a staying action at best. Since then allied troop levels have fallen precipitously, but the large Afghan security forces are an inadequate substitute. Afghan officials figure that as many as a third of soldiers and police are “ghosts,” existing only for payroll purposes. Attrition rates and desertions are soaring. Reported Anthony Cordesman of the Center for Strategic and International Studies, the Afghan National Security Forces “performance will probably worsen due to a combination of Taliban operations, ANSF combat casualties, desertions, poor logistics support, and weak leadership.” To make up for that failure, “U.S. Special Operations troops increasingly [are] being deployed into harm’s way to assist their Afghan counterparts.”

    Over the last four years, U.S. officials figure the number of Taliban fighters has trebled to 60,000; Afghan sources put the number closer to 80,000. Estimates of government control are inflated by counting areas where the district headquarters is in Kabul’s hands, even if the rest of the territory is not. A January BBC survey estimated that the Taliban controlled 4 percent of the country and was active in another 66 percent of Afghanistan: the insurgents have “pushed beyond their traditional southern stronghold into eastern western and northern parts of the country.” Cordesman reported that the “Taliban now holds more territory than in any year since 2001.”

    The insurgents are using night vision equipment to mount attacks in the dark. Indeed, observed Cordesman, “Injured Afghan soldiers say they are fighting a more sophisticated and well-armed insurgency than they have seen in years”

    Even Kabul is unsafe: Washington now takes personnel to the airport via helicopter, avoiding the roads that I took as NATO’s guest in 2011. Of Taliban activity this summer, Al Jazeera reports: “The scale and intensity of these attacks have not been seen since 2001. The Taliban never had the capability to launch such massive offenses and never succeeded in taking over any major cities.” Civilian casualties are on the rise, hitting 2,258 during the first quarter of 2018. Although the Taliban is responsible for most of the deaths, as Kabul relies more on air support the UN reports that casualties from U.S. and Afghan airstrikes are rising.

    One need look no further than the Department of Defense for bad news. In May, the Pentagon’s inspector general reported that “available metrics showed few signs of progress.” And results are usually worse than what is admitted. For instance, Cordesman concluded that official U.S. data “provide highly suspect analysis.” Moreover, “official U.S. and Afghan data seem to sharply understate the level of growing threat presence, influence, and control.” Worse, official testimony estimates offered in testimony “seem more spin than objective.” Overall, Cordesman said, “the ‘surge’ in U.S. forces in Afghanistan failed to have a lasting effect and the levels of violence have grown sharply.”

    Money offers no answer. The Afghan government is incompetent, divided, and corrupt. The Special Inspector General for Afghanistan Reconstruction continues to issue reports detailing massive waste and ineffectiveness of programs for everything from development to security. A recent analysis of Washington’s stabilization program concluded: “The U.S. government greatly overestimated its ability to build and reform government institutions in Afghanistan.” Whatever success it had won’t outlive the U.S. presence: “successes in stabilizing Afghan districts rarely lasted longer than the physical presence of coalition troops and civilians.”

    In short, the future looks dismal. Cordesman cited the Director of National Intelligence in concluding, “The overall situation in Afghanistan will very likely continue to deteriorate, even if international support is sustained.” Best would be a swift exit, bolstered by a simple understanding with the Taliban: create an Islamic state and Washington will stay away, but host terrorists who attack America and Washington will come back bigger and badder than the first time. The Taliban likely would respect that deal.

    But reality has little influence on U.S. policy. Both old and new military commanders, as well as administration officials led by Secretary of State Mike Pompeo, claim that administration strategy is succeeding. The president bumped up troop levels to some 15,000 U.S. and 7,000 allied personnel. “Our troops will fight to win,” he said. “We will fight to win. From now on, victory will have a clear definition: attacking our enemies, obliterating ISIS, crushing al-Qaeda, preventing the Taliban from taking over Afghanistan, and stopping mass terror attacks against America before they emerge.” Alas, this is errant nonsense. The most the new policy will do is put off failure until the next president takes office.

    None of the arguments for permanent war are persuasive. As a matter of geopolitics, Afghanistan is irrelevant to U.S. security. Russia, China, India, Pakistan, and Iran all have a greater interest in regional stability. Washington should encourage a Central Asian conclave, perhaps under the auspices of the Shanghai Cooperation Organization. Far better for Washington to leave and allow Afghanistan’s neighbors to reach a modus vivendi reflecting their relative interests. The result wouldn’t be a liberal, Westminster-style democracy allied with America. But it might be the best possible outcome in a messy, ugly world.

    A stable Pakistan is in America’s interest, but the war is highly destabilizing. Rather than push Islamabad to act against its perceived interests, Washington should exit and allow Islamabad to work with neighboring states in forging an acceptable compromise for those most concerned.

    Advocates of Afghanistan-forever cite terrorism. They contend that if we don’t fight the terrorists in Kandahar, we will have to fight them in New York. Really. For instance, the ever-hawkish Senator Lindsey Graham argued, “Last time we ignored Afghanistan we got 9/11.” Even the normally sober Defense Secretary Jim Mattis said America was in Afghanistan “to prevent a bomb from going off in Times Square.”

    Yet this tragic nation has little to do with terrorism. The Taliban are Islamic fundamentalists, interested in ruling at home, not killing abroad. In 2001, Afghanistan served as a convenient base for Osama bin Laden. After the U.S. intervened, he moved to neighboring Pakistan, where he was later killed. The architect of 9/11, Kalid Sheikh Muhammed, spent time in Bosnia, Kuwait, Pakistan, Qatar, and Pakistan – but never Afghanistan. Al-Qaeda morphed into a group of national franchises. These days the most vibrant branch is al-Qaeda in the Arabian Peninsula, which has been empowered by the U.S.-backed Saudi and Emirati onslaught against Yemen.

    Why else sacrifice U.S. lives and wealth in Afghanistan? There are many Afghans, especially women, who support creation of a liberal society. But that is beyond Washington’s ability to deliver, at least at reasonable cost. Afghanistan always has been ruled at the village and valley level. Someday it might become something different. But that is not Washington’s responsibility today.

    For some, to leave suggests failure by those who fought courageously. But it is not American or allied military personnel who are at fault. They have done everything they were asked to do and more. The blame falls primarily on three successive presidents who embraced a quixotic crusade to remake Afghanistan.

    In contrast to his predecessors, Donald Trump seemed to understand how hopeless the Afghanistan war is. Before announcing his candidacy, he said simply: “Let’s get out of Afghanistan.” A gaggle of establishment advisors has since pressed him to suppress his instincts, but he still has time to do the right thing. At 17 years and counting, it is far past time to bring America’s bravest home.

  • Dramatic Footage Captures Hypersonic Nuclear Aircraft Streaking Across China Sky 

    A mysterious light in the sky was spotted over China on Thursday, sparking panic. Witnesses shared pictures and videos of the unidentifiable object lighting up the night sky on Chinese social media channels, the object was seen above regions of Beijing, Chongqing, Shanxi and Inner Mongolia at about 6:45 pm local time. 

    According to Metro, the footage is of a hypersonic plane. The paper said the plane is owned by the Chinese People’s Liberation Army (PLA) and is capable of Mach 10 (7,672 mph) while carrying a nuclear warhead.  Although there has been no official statement by Chinese, military bloggers claim the footage was caused by a hypersonic glide vehicle (known as DF-ZF). 

    Chris Bergin, managing editor of NASASpaceFlight.com, questions if the footage is just the “death throws” of the Soyuz rocket mishap from Thursday. Some Twitter users responded to his tweet and said, they think the “timing doesn’t match,” and it is, in fact, a hypersonic missile launch. 

    “Timing just don’t match. It happens that there was an airspace closure zone indicating something like a missile test from TSLC towards west earlier today, and while that one doesn’t match either (7am -ish UTC), it’s an indication that something else is responsible,” tweeted @cosmic_Penguin. 

    Another Chinese defense and security observer notes that “the PLARF seems to have conducted 2 test shots today at the Taiyuan space center, the 1st around 06h04 and the 2nd at 10:35 UTC. The latter is confirmed as a shot from base 65, formerly base 51. There have been many testimonies and 1 notice from the Local Government (Translated from French by Microsoft),” tweeted @HenriKenhmann.

    China’s Ministry of National Defense unveiled the DF-ZF in 2014 and has been tested a known seven times. 

    The images below were taken by residents Thursday: 

    “Residents in Chinese capital Beijing as well as in the northern regions of Inner Mongolia and Shaanxi province recorded videos showing the bright white plumes in the sky, which were also likened to SpaceX’s recent Falcon 9 launch after it created similar images.

    As the DF-ZF’s test launches have all been from the Taiyuan Satellite Launch Center in North China’s Shanxi province — and because no other satellite launchers were reported on the day — the sightings seem to corroborate suggestions that it was indeed the plane’s eight flight test to date,” said the Metro. 

    Finally it’s worth noting that if China wanted to censor the images, it would have; it did not. Instead, it appears that the footage may have been an explicit warning to the Trump administration, as trade and currency wars are rapidly “heating” up to whatever comes next.

  • The Self-Defeating US Empire

    Via The Strategic Culture Foundation,

    Trump is trying to square a globalized world through a national-based American capitalism. It won’t work…

    Former President Teddy Roosevelt (1901-09) described the essence of US foreign policy as “speaking softly while carrying a big stick”.

    Under the incumbent president, Donald Trump, it seems to be all about “speaking loudly”.

    What Trump is carrying in reserve is a moot question.

    The difference comes down to a question of credibility. A century ago, America was a formidable military, diplomatic and economic power. Hence, Roosevelt could afford to speak softly because there were other indisputable means at his disposal to reinforce US power.

    Today, the US is still a formidable military power, that’s for sure. But as for its economy and the role of the American dollar as a global payment mechanism the evidence suggests that it has lost much of its former dominance.

    President Trump seems to be trying to compensate for the decline in US power overall by way of adopting more bellicose and foghorn rhetoric for others to comply with American demands.

    This week saw a record fall in the American stock market. That suggests that the supposed strength of the US economy is not what it has been cracked up to be under Trump. A major factor in the collapse of the US stock market is reported to be the uncertainty prompted by the growing US trade war with China.

    Last week, Russian President Vladimir Putin lamented the US policy of imposing sanctions against other nations and its over-reliance on the dollar as the main global currency exchange tool. Putin said the US was making a “strategic mistake” by using the dollar as a weapon with which to punish other nations to comply with Washington’s diktats.

    “This is a typical mistake of any empire,” he said at the Russian Energy Week Conference, in Moscow.

    Implicit in Putin’s comments was that the US is acting like a failing empire. Unsure of its former dominance, the US is resorting to brute force to shore up its otherwise declining power. But in doing so, America is acting above its credibility and thereby compelling others to seek ways around Washington’s overextended writ.

    When the dollar replaced gold as the global financial standard in the early 1970s, the American currency assumed a privileged position in international trade. But with such a privilege comes the responsibility to be a universally respected banker, which entails a certain apolitical character of the dollar.

    America’s loss of national economic power has resulted in the US abusing the global dollar system for its own selfish interests. That in turn results in loss of confidence by other nations. Washington is politicizing the dollar system in order to pursue its national interests.

    The over-reliance by Washington on economic sanctions against other nations is forcing them to seek ways of circumventing the US-dominated global system of trade and commerce.

    We see this in the European Union setting up a non-dollar system to continue trade relations with Iran after Trump abandoned the international nuclear accord with Tehran. We see it in the way Russia and China are setting up a payment system for oil and other commodities which obviates the use of dollars.

    So much for “free-market capitalism” for which America is supposed to be the global exponent. If America doesn’t get its way over markets then sanctions are imposed to “correct” the way. The gas energy supply from Russia to Europe is a classic example. Russian-suppled gas is commercially viable to meet European demand. Yet the US wants to supplant that market with its own more expensive gas, and the only way it can do that is to slap sanctions on Russia and European companies. That is not market economics. It is imperialist hegemonic diktat. That undermines the US dollar and principles of supposed American capitalism.

    Slowly but surely the world is moving away from the dollar as a universal currency. Because of Washington’s abuse of the dollar and its preeminence in banking as a political weapon to exert its national objectives.

    Putin said that US sanctions policy towards many countries and abuse of the dollar as global reserve currency is a “strategic error” committed by a waning empire. As more countries increasingly drop the dollar to circumvent US sanctions, the result will be a continual undermining of international standing of the US currency and banking system. A classic case of over-reach by Washington leading eventually to its own economic demise.

    If history tells us one thing it is that every empire has its day. Imperial over-reach is the sign of a declining empire.

    President Trump is clashing loudly over trade with China and almost every other nation, including the Europeans and Canada. Trump is shouting about “unfair” trade because he doesn’t have a big stick in reserve in terms of inherent American strength. The dollar is no longer the only show in town.

    Russia is “de-dollarizing” its economy, meaning it is moving towards trade with other nations in bilateral currency exchange. The same goes for China and other nations. The upshot is the dollar is losing its international power, and, with that, the US economy is losing its former standing. The empire is waning. And the only one to blame for that is the US itself from its abuse of power.

    The ominous resort is the only stick left to Washington – military power. That is why the world is facing a dangerous situation. If America doesn’t get its way, it seems to be pushing the world to war.

    It could be all be very different of course. If the US were to stop trying to assert itself as a unipolar power and begin to engage with others on the basis of a multipolar world.

    Trump is trying to square a globalized world through a national-based American capitalism. It won’t work.

    And the more the US government tries to achieve that the more the dollar and American power falls into decline. Which makes US militarism a greater compensatory danger.

  • Woman Booted Off Flight For After Refusing To Leave With Her 'Emotional Support Squirrel'

    The ongoing controversy surrounding passengers’ demands to take their ’emotional support animals’ with them on long flights took a hilarious turn on Tuesday when a woman was forcibly removed from a Frontier Airlines flight after she was told that her “emotional support” squirrel wouldn’t be allowed on board.

    Passengers were forced to deplane from flight 1612 from Orlando, Fla., to Cleveland on Tuesday when the woman refused to obey a request to leave the flight with her squirrel, at which point the airline called the Orlando Police, who escorted the woman off the plane. The woman argued that she included in her reservation notes that she would be traveling with an emotional support animal – though the airline argued that she did NOT indicate that said animal would be a squirrel, according to the Cleveland Fox affiliate. 

    Frontier said it doesn’t allow rodents on its fights.

    The airline said the passenger noted in her reservation that she was bringing an emotional support animal, but she did not specify that said animal would be a squirrel.

    Airlines have been struggling to tighten restrictions on so-called “emotional support animals”, with Delta saying earlier this year that all requests for passengers to travel with ESAs would be “thoroughly vetted” (no pun intended, we think).

    Video of the incident is going viral:

    Southwest airlines has  banned all ESAs except for emotional support dogs, cats and, oddly enough, miniature horses. Meaning that travelers will need to leave their spiders, snakes and peacocks at home, as the following animals have all been banned from US flights.

    Two

    ESA

    Three

    4

    5

    6

    7

    8

    And now this guy…

    Squirrel

     

  • Multi-Polar Political Project Pushed Forward By Putin In India

    Authored by Tom Luongo,

    I have to wonder when Russian President Vladimir Putin sleeps.  He’s busier than any other leader, traveling the globe while consistently changing the board state geopolitically.

    While everyone, including me, has had their eye on the turmoil in U.S. political circles over the past couple of weeks, Putin visited India and in a little less than two days ended most speculation as to where India stands in the emerging multi-polar world that Putin and Chinese Premier Xi Jinping are building.

    Putin and Indian Prime Minister Narendra Modi inked deals with huge future consequences for both countries.  So, while the headlines were all about the Trump Administration trying to pressure India into not buying S-400 missile defense systems from Russia, Putin and Modi put the final touches on Russia building India no less than six more nuclear power plants.

    One of the things holding India back as a first-world economy is a reliable electricity grid.  Having eight Russian-designed and built plants operating around the country will upgrade the landscape for India’s electricity usage immensely.

    Part of the reason India is such a large oil and gas importer is their electricity base load needs are being met with expensive hydrocarbons.  Shifting that to nuclear,more like France and the U.S., changes everything, especially in the long run, from a foreign exchange perspective.

    Bernard at Moon of Alabama was first on interpreting what the scope of these deals mean for the U.S.’s attempt to cleave India from the BRICS alliance.  He rightly linked the western media’s finally picking up the Rafale fighter jet corruption scandal dogging Modi as a sign that the U.S. is very angry over these deals and is beginning the process of undermining Modi’s government.

    Modi in every way declared India’s independence from the U.S’s “Quad” strategy aligning Japan, Australia and India with U.S. interests versus that of the BRICS and China’s Belt and Road Initiative (BRI).

    Magnum IPI

    Remember, last year I told you about the early stage talks between Gazprom and the principle countries to resurrect the Iran-Pakistan-India pipeline, or IPI.  A small note in RT last year was all we heard of this until recently.

    FROM RT: Moscow and Tehran are about to sign a memorandum of understanding to back a new gas pipeline project, according to Russian Energy Minister Aleksandr Novak.

    The countries will build a 1,200-kilometer long pipeline from Iran to India with the Russian energy major Gazprom developing several Iranian deposits along the route of the future pipeline.

    So, the IPI pipeline, long sought-after by all players and fought against by the forces of Hillary Clinton and the U.S. geopolitical guiding lights, is finally going to get done.

    And will likely get done before the TAPI pipeline – Turkmenistan Afghanistan Pakistan India – gets built across Afghanistan.  Right now Turkmenistan is building their section, Field of Dreams-style (if you build your section, they will build theirs).  But there are no plans at this point for a start date on construction of the Afghan or Pakistani legs of this boondoggle, no less the Indian.

    Note that last year’s announcement only involved Moscow and Tehran.  Now Pakistan is officially on board, which, again, went unnoticed because the reporting on it was sans-information.  It took me no less than ten articles to finally find what they were talking about:

    Even most Pakistani sources omitted any reference to Iran in the announcement.   That, in and of itself, makes you wonder.

    Energy Dominance or Glutton?

    So, while the Trump administration continues to pursue its ‘energy dominance’ strategy to put us in the driver’s seat producing the marginal barrel of oil, Putin continues to make deals that undercut that and strengthen his central Asian partners.

    I’m beginning to think ‘energy dominance’ is stillborn before it even gets going.  U.S. oil production is accelerating and reaching all-time highs but so what if you can’t get the oil to market or have the refinery capacity to add value before exporting it around the world.

    Look no further than the spread between West Texas Intermediate (WTI) and Brent Crude prices.  WTI is trading now at a $10 discount to Brent.  While that looks good from a ‘market share’ perspective, the reason for that is that the pipeline infrastructure in the U.S. cannot bring the oil pouring out of the Permian Basin to market.

    We’re in a different era while the oil market remains tight.  So, if the market is so tight, why is WTI trading at such a steep discount to Brent?  Sure some of this is worry over Iran being cut out of the market, but that explains the total oil market being up $10-15 over where it should be.

    It doesn’t explain the change that began last summer.

    This infrastructure problem is real.  The slowdown in drilling is here.  Multiple Frac Sand producers are looking at layoffs or contract terminations based on the Permian Basin boom turning quickly to bust, not because there isn’t demand for the product but because there’s too much oil overwhelming the market.

    If the entire supply chain isn’t tightly aligned then the project to marginalize Iran in the oil market will fail when November 4th rolls around and demand is still there but the suppliers can’t meet them.

    That’s why BP’s CEO is going after the Saudis saying they have spare capacity they aren’t bringing on line.  No one wants to take the blame for the disruptions in the crude oil market on the horizon.

    Which brings me back to India, Pakistan and Iran.  India will talk a good game to Secretary of State Mike Pompeo about cutting back on imports, but at the end of the day India will buy as much Iranian oil as they need, so will China.

    There may be some virtue signaling, cutting back ten percent or so, but there is no way this market can take 2.8 million barrels of Iranian exports off the market and be in balance.

    And if you want to know why Modi finally made the decision to get off the fence about the BRICS look no further than the U.S. not being able to control the flow of energy like it has in the past.

    With each little victory across central Asia, Putin makes it easier and easier for other leaders to say yes to him and no to the U.S.

    One can only hold a system out of balance for so long.   And “The Heartland” of Central Asia has been in a constant state of upheaval for more than a hundred years thanks to first the British and then the U.S.’s imperial demands.

    But, the economic incentives are too big for countries like India to not make peace with its neighbors. Modi finally came to the conclusion that it is time to stop playing into the geopolitical games stoked via cultural and border conflicts by the U.S.  That going it alone as a buffer state only holds India back in the long run now that there is a resurgent Russia ready to work with China to knit the entire region together.

    We are witnessing, bit by bit, the end of our ability to implement the Brzezinski Doctrine of Central  Asian chaos.  Putin gets this and plays the game very well.

    And he just took a big piece off the board.

    *  *  *

    To support more work like this and get access to exclusive commentary, stock picks and analysis tailored to your needs join my more than 190 Patrons on Patreon and see if I have what it takes to help you navigate a world going slowly mad.

  • Boston Dynamics Terrifying Humanoid Robot Can Do Parkour Now

    Boston Dynamics’ “nightmare inducing” robots are seemingly becoming more human-like with each passing month. Whereas just a few years ago, the company’s “Atlas” robot could barely manage walking on uneven ground, the terrifying humanoid android can effortlessly run and leap over obstacles – or on to platforms and boxes. This latest upgrade follows an update from last year where BD demonstrated Atlas’ newfound ability to perform standing backflips with ease. Can you do that? We thought not…

    In one recently uploaded demo, Atlas does parkour – bounding over obstacles, running across platforms and picking up boxes.

    In other words, if you were looking for more evidence that the long-prophesied robot uprising is drawing closer with each passing day – well, here it is.

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

     

  • Google Vs. Trump: "The Good Censor" On Collision Course With The Patriot President

    Authored by ‘Washington Watcher’ via VDare.com,

    The leaked internal Google briefing “The Good Censor” [PDF] has received suspiciously little attention from the Main Stream Media, but it represents the crassest statement yet of the Tech oligopolies’ intention to impose Silicon Valley Political Correctness on the U.S.

    As American Thinker Editor Thomas Lifson puts it:

    “I congratulate Breitbart.com for the scoop, and I urge everyone -I am looking at you, President Trump and Congress – to read and ponder the fate of the Republic unless this company is defanged, most likely by antitrust action, but possibly also via civil courts.” [Stunning 85-page Google memo ‘The Good Censor’ leaked to BreitbartOctober 10, 2018]

    What are Trump’s options? He’s certainly thinking about the issue.

    The Washington Post reported recently that the White House was backing off a proposed executive order that would have required federal agencies to “investigate and/or prosecute” tech giants for bias. Administration officials told WaPo:

    “Although the White House is concerned about the conduct of online platforms and their impact on society, this document is not the result of an official White House policymaking process.” [White House distances itself from reports that Trump could target Facebook, Google and Twitter with a new executive order, by Tony Romm and Josh Dawsey, September 22, 2018]

    WaPo reported Trump has demanded an executive order on this matter for some time, but all of the drafts have been deemed “unworkable.” Sources tell the Watcher that the fallout from the leak deterred the President but he still considers the issue a top priority for his base and he wants it addressed.

    Of course, first, we have to shoot down True Conservative notions that it’s not the government’s job to resolve tech censorship. Dogmatic Conservatism Incers insist the free market will magically fix the problem and government intervention would somehow be worse than suppression of right-wing views. Some—such as The Weekly Standard’sJonathan Last—have even celebrated this censorship as a necessary measure against “repugnant” voices. [The Case for Banning Alex JonesAugust 8, 2018]

    All of these opinions are absolutely ridiculous and predicated on the notion that Big Tech won’t go after “respectable” conservatives, which isn’t even the case. PragerU, a mainstream conservative outlet, has been censored numerous times by Facebook and YouTube, in spite of its painfully respectable brand. And others will soon face the same treatment once the T ech Totalitarians realize they can continue this malfeasance with impunity. [Facebook Censors PragerU Videos And Shadow Bans Posts, by Kyle Perisec, The Daily Caller, August 17, 2018]

    The “free market” can’t do anything about it. Google has cornered over 92 percent of the search engine market—a higher market share percentage than Standard Oil at its peak. Big Tech has made sure that Gab, a free speech alternative to Twitter, is barredfrom ever posing a serious challenge. And no one wants to use a “conservative” Facebook. [Hate speech crackdown spreads to behind-the-scenes tech, by Tony Romm and Elizabeth Dwoskin, Washington Post, August 10, 2018]

    Big Tech has manipulated the free market to benefit its own interests and power. Tech execs know they don’t have to worry about conservative competition putting an end to their malpractices.

    That leaves only one serious alternative: government intervention.

    It is in America’s interest for this to happen. The public forums and printing presses of our day are Facebook, YouTube and Twitter. If you are barred from these platforms, you are effectively eliminated from the public square. Big Tech wants to ensure right-wing viewpoints are consigned to the dustbin and no one has the freedom to share those views in public.

    This is where Donald Trump can step in and halt these disturbing efforts.

    Here are the two things the President can do without issuing an executive order.

    1. Continue Calling Out Tech Censorship

    Something as basic as Trump tweeting out criticism of Facebook and Google is actually remarkably effective. Tech giants are worried sick the President may target the industry and are wary of doing anything radical enough to draw his ire.

    Corporate executives are cowards. They live in fear of bad publicity. It’s why so many companies cave to Leftist pressure campaigns—no corporation wants to be branded as inadequately “woke.”

    This tactic hasn’t been as effective for conservative activists, but the President of the United States is a different matter. One tweet from him can impact market shares, inspire support for government regulation, inspire dozens of segments on cable news, and encourage congressional scrutiny. Big Tech does not want this.

    In the past, they actually have taken steps placate conservative complaints. One such example is Facebook laying off the Leftist journalists who ran its Trending section over criticism it was too biased against conservative news sources. [Facebook Lays Off Journalists From ‘Trending Topics,’ Replaces With Algorithm, by Leif Walcutt, Forbes,August 26, 2016]

    The power of the tweet is a strong weapon for Trump in his fight against tech censorship. Putting constant pressure on these companies to safeguard free speech increases the chances they will do so. Sources tell the Watcher that the Trump campaign plans to make this issue a central part of its agenda, as evidenced by campaign manager Brad Parscale’s op-eds and tweets [Big Tech is becoming Big BrotherWashington Examiner, August 16, 2018]

    What we need is for Trump to tweet and talk about this on a weekly basis. He should call out Google and Facebook for their pernicious practices at every rally. He should tweet out stories showcasing their bias every time one is published. The pressure must be relentless and constant until these platforms decide to take up reform on their own.

    If that fails or is insufficient, there is one direct action Trump can take:

    2. Target Section 230

    Section 230 of the Communications Decency Act is a sacred privilege for social media companies. This law protects Facebook, Twitter, and other platforms from liability over the material published on their websites. One of the reasons these services are granted this privilege is the Congressional finding, embodied in legislation, that they “offer a forum for a true diversity of political discourse.” [47 U.S. Code § 230 – Protection for private blocking and screening of offensive material] In contrast, newspapers are subject to libel actions over Letters to the Editor, because they are assumed to have exercised editorial judgement in publishing them.

    Since it is highly questionable these platforms provide politically diverse forums anymore, it is arguably time for Congress to revisit Section 230. Not only is Big Tech’s censorship violating its spirit, so is their shifting claims on not being publishers. Indeed, Facebook’s lawyers have already paradoxically claimed that in some circumstances the company is a publisher, undermining the mega-platform’s numerous public claims that it is not a publisher. [Is Facebook a publisher? In public it says no, but in court it says yes, by Sam Levin, Guardian, July 2, 2018]

    Both Google and Twitter have also undermined their own claims not to be publishers in litigation, according to court documents provided to the Watcher. Google claimed in its legal defense against PragerU’s lawsuit over censorship that it can exercise “editorial control and judgment” as a publisher. Twitter argued in court that it was similar to the New York Times and must have “exercise of editorial control and judgment” over the content it publishes.

    Congress has an obligation to investigate these companies over their apparent Section 230 violations, and Trump should encourage them to do so. Nothing will terrify Big Tech more than having the President cheer on stripping them of their Section 230 protection.

    Legislation amending Section 230 to explicitly state these companies may not engage in political discrimination would protect free expression for years to come.

    All Trump has to do is suggest the idea to allies like House Majority Leader Kevin McCarthy to get this done.

    Regardless of whether legislation would pass, it would be guaranteed to inspire serious reform in Silicon Valley. Every tech company would be desperate to prove it doesn’t censor conservatives and patriots and feel a chill at the prospect of suppressing popular right-wing views. Taking away Section 230 protection would make a serious dent on their businesses. They would want to do everything possible to keep it.

    Even though we may not see an Executive Order to tackle tech censorship this year, we shouldn’t lose heart. Trump isn’t going to forget about this issue and he will see more headlines on the dastardly behavior of tech giants. We just need him to speak out more on this problem and press Congress to do something about it.

  • Poopocalypse – San Francisco Is Now 'Doo-Doo Capital' Of USA

    RealtyHop, a website dedicated to helping millennials find smart home investments, released a new report on their blog which looked at poop complaints data of metropolitan cities across American and discovered that San Francisco received ten times more poop complaints than New York City, the largest city in the US. 

    “San Francisco, as small as it is, is covered by poop, dog and human poop. According to the San Francisco Department of Animal, there are around 120,00 dogs in San Francisco, making it one of the most dog-friendly cities. In addition to our furry friends, there are over 7,000 homeless individuals in San Francisco. Sounds a lot better than New York and Los Angeles, you might say. But the lack of shelters and a better system is putting the city in danger,” warned RealtyHop. 

    The report labels the Californian city as the “Doo-Doo Capital in the U.S.”  

    Data compiled by Realtyhop reachers showed 455.89 pop sightings reported per square mile in 2017.

    “Living in a s—ty neighborhood has a whole new meaning for San Franciscans,” RealtyHop states. “Unlike what we saw in Chicago and New York, the city center of San Francisco is, sadly, covered by poop, and neighborhoods away from the city center see fewer complaints (except for Golden Gate Park).” 

    Here are the Shittest Neighborhoods: 

    1. Golden Gate Park – 3218.75 Average Yearly Complaints/Per 10,000 Households – 23 complaints in 2017, 18 complaints in 2018 as of August 31st. 
    2. South of Market – 2492.90 Average Yearly Complaints/Per 10,000 Households – 4,436 complaints in 2017, 3,782 complaints in 2018 as of August 31st. 
    3. Tenderloin – 2272.61 Average Yearly Complaints/Per 10,000 Households – 4,035 complaints in 2017, 2,211 complaints in 2018 as of August 31st. 

    “While one would assume that lower-income neighborhoods might experience worse poop issues, that is not the case in San Francisco,” according to the website. “It seems that the poop crisis in San Francisco is unlike what we see in other cities (where you can just blame it on the cute furry little friends of ours), it reflects more so a social crisis.” 

    San Francisco’s comfortable climate has made it a mecca for the country’s homeless. Out of the 7,499 homeless people recorded in 2017, about 58%, or 4,353 people, were masked as unsheltered, which has spurred tent cities across the downtown. 

    Data compiled by RealtyHop shows the number of poop complaints has jumped from 2011 to 2018, and the number almost tripled — from 5,606 to 20,899 — from 2011 to 2017. Researchers say 16,310 complaints have been logged in so far this year, which may indicate 2018 could be the shittest on record. 

    In response to the very shitty situation, city authorities launched a six-person crew, under a new pilot program called the Poop Patrol, with the mission of cleaning up poop before anyone has a chance to complain about it. 

    However, none of this is surprising as the cost of living in the region continues to soar, leaving many residents left behind in the broken economy. Rising wealth, health, and education inequalities have driven the city to a breaking point, where low-income people have now been forced to live in tent cities and or their automobile. 

    “It’s a kind of middle-class homelessness,” writes Steve Lopez in an article for the Los Angeles Times. 

    San Francisco covered in poop seems to be the result of a widening wealth inequality crisis. There are no indications the wealth gap will normalize in the region, as the shit storm is expected to get worse.  

     

  • Johnstone: We're "Trapped In An Orwellian Oligarchy"

    Authored by Caitlin Johnstone via Medium.com,

    Facebook, Twitter Purge More Dissident Media Pages In Latest Escalation

    Facebook has purged more dissident political media pages today, this time under the pretense of protecting its users from “inauthentic activity”. In a statement co-authored by Facebook Head of Cybersecurity Nathaniel Gleicher (who also happens to be the former White House National Security Council Director of Cybersecurity Policy), the massive social media platform explained that it has removed “559 Pages and 251 accounts that have consistently broken our rules against spam and coordinated inauthentic behavior.”

    This “inauthentic behavior”, according to Facebook, consists of using “sensational political content — regardless of its political slant — to build an audience and drive traffic to their websites,” which is the same as saying they write about controversial things, and posting those political articles “in dozens of Facebook Groups, often hundreds of times in a short period, to drum up traffic for their websites.”

    In other words, the pages were removed for publishing controversial political content and trying to get people to read it. Not for writing “fake news”, but for doing what they could to get legitimate indie media news stories viewed by people who might want to view it. The practice of sharing your material around in Facebook groups is common practice for most independent media content creators; I did it myself a lot in late 2016 and early 2017, and pretty much all my indie media peers at the time did too.

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

    “For those of you who read what I write, you know that I did not violate any standards,” writes Terresa Monroe-Hamilton, whose personal profile and Facebook page for her political blog NoisyRoom.net were both deleted. “In fact, I don’t send out most of what I write. I send on big news links and a few memes. It was enough to get me banned and the pages are simply gone.”

    “Facebook took down my page with nearly 70,000 followers, labeling it as ‘spam,’ when I have spent 4 years working to build that page up and using it to post the articles I wrote and videos of my reporting,” tweeted RT America’s Rachel Blevins. “This is so incredibly wrong and is affecting hundreds of similar pages.”

    “And just like that 5 + years of hard work promoting ideas of peace and freedom have been erased,” wrote a Facebook user called John Liberty, who lost multiple pages about police accountability, cannabis legalization and libertarianism.

    Two of the most high-profile pages which were shut down have probably been seen at some point by any political dissident who uses Facebook; the Free Thought Project, which had 3.1 million followers, and Anti-Media, which had 2.1 million. I’ve found useful information on both sites before, and despite disagreeing with them ideologically in some areas have found them both vastly more legitimate than anything you’ll find on Google News.

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

    As if that wasn’t creepy enough, some of the accounts purged by Facebook appear to be getting censored on Twitter as well, bringing back memories of the August cross-platform coordinated silencing of Alex Jones. The aforementioned Anti-Media has now been suspended from Twitter just hours after tweeting about being removed from Facebook, along with one of its top writers Carey Wedler, and a Unicorn Riot activist named Patti Beers who had more than 30,000 Twitter followers has just been removed from both sites as well.

    I have said it before and I will say it again: in a corporatist system, wherein there is no clear line between corporate power and government power, corporate censorship is government censorship. You can’t have a system wherein corporate lobbying and campaign finance amount to legalized bribery of elected officials, wherein massive Silicon Valley corporations form extensive ties with secretive government agencies in order to eclipse their competition, and then claim this is a matter of private corporations enforcing their own rules on their own private property. This is just what totalitarian government censorship looks like in a corporatist oligarchy.

    Do you want a few Silicon Valley plutocrats determining what political speech constitutes “inauthentic activity” for you? Do you want a world in which the masses are herded into massive government-allied social media stables which are then regularly brought before the US Senate to pledge more iron-fisted censorship of problematic political speech? Do you want a world in which social media corporations are forced to make alliances with existing power structures in order to be allowed to grow? Do you want a world in which venues of political discourse are increasingly sterilized to favor the agendas of the ruling class? If not, the time to act is now.

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

    Regardless of where you’re at on the political spectrum, if you oppose the status quo then opposing internet censorship of any political speech is now a matter of simple self defense. If this wasn’t obvious to you when they shut down Alex Jones, it should damn well be obvious to you now. If you want to change the existing system in any way which takes power away from those currently in power, your voice is next on the chopping block. They’re locking all the doors down as fast as they can to keep us trapped in this Orwellian oligarchy until they get us all killed by war or ecocide. If they shut down the public’s ability to share dissident information, they’ll have locked the final door. Don’t let them.

    UPDATE: Free Thought Project has, like Anti-Media, now been removed from Twitter as well as Facebook. There definitely appears to be some kind of coordination or overlap between Twitter and Facebook censors.

    *  *  *

    Thanks for reading! 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. 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, checking out mypodcast, throwing some money into my hat on Patreon or Paypal,buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers.

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Today’s News 12th October 2018

  • What Will Europe's Internet Look Like After Passage Of Orwellian Directive?

    Last month, members of the EU Parliament voted to advance a controversial copyright directive that contains provisions forcing tech giants to install content filters, while also setting in place a potential tax on hyperlinking. 

    The bill, known as Article 13, would filter everything anyone posts online and match it to a crowdsourced database of “copyrighted works” which anyone can add or change. 

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

    Another portion of the directive, Article 11, is a “link tax” that would ban a quoting more than one word from an article which links to another publication – unless you are using a platform which has paid for a linking license. The link tax does however allow member states to create limitations and exceptions in order to protect online speech. 

    What comes next?

    Now that the directive has passed through Parliament, the next step, according to the Electronic Frontier Foundation, is the “trilogues,” which are closed-door meetings between European government officials, the European commission and the European Parliament – which will be the last time that the Directive’s language can be substantially changed without a second debate in Parliament. 

    That said, one woman is committed to shining light on the secret discussions: 

    Normally the trilogues are completely opaque. But Julia Reda, the German MEP who has led the principled opposition to Articles 11 and 13, has committed to publishing all of the negotiating documents from the Trilogues as they take place (Reda is relying on a recent European Court of Justice ruling that upheld the right of the public) to know what’s going on in the trilogues).

    This is an incredibly important moment. The trilogues are not held in secret because the negotiators are sure that you’ll be delighted with the outcome and don’t want to spoil the surprise. They’re meetings where well-organised, powerful corporate lobbyists’ voices are heard and the public is unable to speak. By making these documents public, Reda is changing the way European law is made, and not a moment too soon. –EFF

    That said, Articles 11 and 13 “are so defective as to be unsalvageable,” writes the EFF, adding that “when they are challenged in the European Court of Justice, they may well be struck down.” 

    The trilogues, meanwhile, will struggle to clarify all of the terms contained within the directive in order to resolve the inevitable potential for abuse and ambiguity. The trilogues can expand on the Directive’s broad brush strokes and proeduce quantifiable terms that will minimize negative effects of the law while it works its way through the courts. 

    Gaming the system

    As the EFF notes, existing copyright filters such as YouTube’s ContentID sytstem are designed to block users who attract too many copyright complaints – but what if people are making false claims in order to punish ideological opponents? The platforms must be able to identify and terminate the accounts of such individuals who repeatedly make false or inaccurate claims concerning copyrights. 

    A public record of which rightsholders demanded which takedowns would be vital for transparency and oversight, but could only work if implemented at a mandatory, EU-level.

    On links, the existing Article 11 language does not define when quotation amounts to a use that must be licensed, though proponents have argued that quoting more than a single word requires a license.

    The Trilogues could resolve that ambiguity by carving out a clear safe-harbor for users, and ensure that there’s a consistent set of Europe-wide exceptions and limitations to news media’s new pseudo-copyright that ensure they don’t overreach with their power. –EFF

    Meanwhile, the trilogues must absolutely safeguard against internet behemoths such as Facebook, Google and MSM news websites from creating licensing agreements that would exclude everyone else. 

    News sites, for example, should be able to opt out of requiring licenses for sites which would like to link to them without fear of lawsuits – however these opt-outs should be universally applied to websites big and small, so that the law doesn’t give unfair leverage to companies like Google, which could simply allow partners to negotiate an exclusive exemption, while punishing smaller players who would be drowning in license fees.  

    The Trilogues must establish a clear definition of “noncommercial, personal linking,” clarifying whether making links in a personal capacity from a for-profit blogging or social media platform requires a license, and establishing that (for example) a personal blog with ads or affiliate links to recoup hosting costs is “noncommercial.”

    These patches are the minimum steps that the Trilogues must take to make the Directive clear enough to understand and obey. They won’t make the Directive fit for purpose – merely coherent enough to understand. Implementing these patches would at least demonstrate that the negotiators understand the magnitude of the damage the directive will cause to the Internet. –EFF

    Meanwhile, the organizers of the trilogues are under the impression that they can iron out the wrinkles in the Directive within a few weeks of closed-door meetings. We have our doubts. 

  • 'Trident Juncture 2018' About To Kick Off: NATO's Big War Games Near Russia's Borders Never End

    Authored by Alex Gorka via The Strategic Culture Foundation,

    The NATO-led Trident Juncture 2018 (TRJE18) exercise that is to be held in October and November is the largest coordinated show of force since the Cold War. It will primarily be hosted by Norway. The training event will largely take place in the central and eastern parts of this Nordic country that neighbors Russia, as well as over the skies and in the seas of  Sweden and Finland. The maritime component will be conducted in the surrounding areas of the North Atlantic and in the Baltic Sea. TRJE18-related activities will take place as far away as Iceland. Russia has been invited to send observers to watch the exercise.

    Actually, TRJE18 consists of three parts. The deployment phase has been underway since August. A live field exercise will be held from October 25 to November 7 with six brigades fighting each other right in the heart of Norway. A command post training event will be conducted from November 13 to November 24.

    The drill will involve 45,000 participants from over 30 nations, including 10,000 rolling or tracked vehicles, 150 aircraft, and 60 ships. The main goal is to test the ability of NATO’s new Response Force to rapidly deploy. Norway will evaluate its ability to receive and handle reinforcements sent by its allies.

    There are 700 US Marines stationed in Norway. That’s not a huge force, but as Adm. James Foggo, who heads all US naval forces in Europe and Africa and commands the Allied Joint Force Command in Naples put it, “that’s 300 Marines today. 3,000 Marines tomorrow.” The American pre-positioned forward storage sites in Norway, a complex of caves, have been upgraded to store weapons and equipment for roughly 15,000 Marines. That Scandinavian country has become the source of a threat to Russia’s national security.

    The Harry S. Truman Carrier Strike Group is also taking part. The aircraft carrier returned to its home base in Norfolk in July following a three-month deployment. It was back in Europe in mid-September. Normally, US carrier groups operate according to a standard seven-month cycle. Now they are being shifted to “dynamic force employment” in order to improve flexibility.

    Finland will contribute significantly to this exercise that is based on a simulated Article 5 scenario, with its troops operating in their home region, in Sweden and Norway. It will also lead and host the naval exercise Northern Coasts 18 (NOCO18) in the Baltic Sea, which is linked to Trident Juncture. Finland is sending about 2,000 troops to TRJE18. The size of that force is comparable to the contributions made by leading NATO members. For example, Germany is sending 4,000 troops, the UK — 3,500 troops, France – 3,000, Canada — 2,000, Denmark — 1,000, Italy — 1,500, Spain — 1,000, and the Netherlands — 1,500. The US contribution will be 12,000 soldiers, and the primary host is sending 6,500 servicemen. There were only about 160 Finnish troops participating in the last Trident Juncture held in 2015. Three years ago, the drill was held in southern, not northern Europe.

    Sweden, another non-NATO active participant, is sending about 2,200 troops, along with four Gripen fighters that will be based in Norway. Before the TRJE kicks off, US, Swedish, and Finnish forces will conduct their own exercises in Sweden. Both Finland and Sweden participate in NATO’s Response Force.

    Until now, both Scandinavian nations have shied away from holding Article 5 exercises. The Trident Juncture 2018 is a drastic shift in that policy, which is being carefully evaluated by Russia.

    At an unofficial level, Sweden and Finland have already joined NATO through other groups and agreements, such as their trilateral cooperation with the US. The militarization of Norway, as well as all of the Scandinavian Peninsula and the Baltic states is being perceived by Russia as a provocation and a threat that demands a response. The Baltic states continue to request an increased military presence on their soil. NATO is stockpiling weapons, military equipment, and ammunition in the Baltic region and Poland.

    There is a backstory to the Trident Juncture 2018 exercise. In early October, US Envoy to NATO Kay Bailey Hutchinson said Russia had been put on “short notice,” due to its alleged violations of the 1987 Intermediate Nuclear Forces Treaty. She warned that the US might “take out the missiles” before they could be deployed if Russia did not back down.

    This year, NATO has already coordinated approximately 100 exercises, 20% more than during the same period in 2017. Poland will invite NATO members and partners for another large-scale, officially “national” exercise, Anaconda 2018, which will be held at roughly the same time as some smaller NATO drills, such as Citadel Bonus-18, Iron Wolf-18, and Baltic Host-18. The hidden aim of the exercises is to keep those forces ready to close in on Russia’s borders. That’s why the alliance is creating this “military Schengen zone,” in an effort to minimize the time needed for troop deployment. Anaconda 18 will be a cover for the deployment of a US Army brigade in Europe, in addition to the deployment of the US 2nd Armored Brigade Combat Team. Next month, we’ll see an entire US mechanized division in operation in the Old World. Four NATO multinational battalion-size groups are already stationed in the Baltic states and Poland.

    These never-ending exercises adjacent to Russia’s borders show that the terrorist threat has been forgotten. The North Atlantic alliance is too busy preparing for a large-scale invasion by Russia to even think about it. American strategists appear to have a short memory. It was not Russia who attacked the United States on 9/11. A different type of exercise would be needed to fend off a terrorist threat, but time, money, and efforts are being spent on war preparations against Moscow, which is fighting against the very same Islamic fundamentalists who threaten the West. Last month, Russia held a very large-scale training event dubbed Vostok 2018, but it was held in Russia’s Far East region so as not to provoke NATO, although that alliance did not seem to appreciate this thoughtful gesture.

    It is true that the terrorist threat is no big prize for the defense industry. Opposing such big potential foes as Russia or China promises huge financial benefits for companies involved in military production. These never-ending and provocative exercises are needed to keep tensions high and justify the allocations of funds. This state of constant confrontation with Russia and China rakes in profits. The ends justify the means.

  • US Army Wants 250,000 Next-Gen Combat Rifles And 150 Million Bullets 

    The US Army’s chief of staff said Monday that the next-generation squad weapon would fire faster, farther than previous infantry rifles and penetrate the most advanced body armor technologies in the world. 

    “It will fire at speeds that far exceed the velocity of bullets today, and it will penetrate any existing or known … body armor that’s out there,” Gen. Mark Milley told Military.com at the 2018 Association of the US Army’s Annual Meeting and Exposition. “What I have seen so far from the engineers and the folks that put these things together, this is entirely technologically possible … It’s a very good weapon.” 

    Textron/AAI Next-Generation Gun (one of five firms submitted prototype weapons for the program) 
    Textron/AAI Next-Generation Gun 

    Military.com said Gen. Milley’s comments come days after an Oct. 04 draft solicitation which announced the Army’s plan to “award up to three prototype Other Transaction Agreements … with each offeror developing two weapon variants and a common cartridge for both weapon, utilizing government-provided 6.8-millimeter projectiles,” according to FedBizzOpps. “The weapons include the Next Generation Squad Weapon-Rifle (NGSW-R) and the Next Generation Squad Weapon-Automatic Rifle (NGSW-AR).” 

    The contract solicitation on FedBizzOpps states the Army plans to award production for up to “250,000 total weapons system(s) (NGSW-R, NGSW-AR, or both), 150,000,000 rounds of ammunition, spare parts, tools/gauges/accessories, and engineering support.” 

    The contract award would be valued at “$10 million the first year and $150 million per year at the highest production rates,” it adds. 

    In July, we documented how the Army selected five firms to build next-generation squad automatic rifle prototypes. The contracts were the result of a prototype opportunities notice that we also covered in March for the small-arms industry to submit designs to replace the M249 light machine gun. 

    We also said the Army is preparing for decades of hybrid wars across multiple domains – space, cyberspace, air, land and maritime. Back in Oct. 2017, we examined the military’s latest Training and Doctrine Command report, which highlights how the next round of hybrid wars could begin somewhere around 2025 and last through 2040. 

    Military.com said Gen. Milley did not comment on the prototype contracts, but said there were “several prototypes that were advanced forward.”

    He said the Army is forbidden to “speak too much about its technical capabilities because our adversaries watch these things very closely.” 

    “It’s a very sophisticated weapon, very capable weapon. It’s got an integrated sight system to it, and it also integrates into the soldier’s gear and other equipment that we are fielding,” Milley said. “And not surprisingly with a weapon like that, it’s probably pretty expensive. We expect it to be expensive so we are probably not going to field the entire Army with the weapon.” 

    “The bottom line is we are committed to a new rifle and a new squad automatic weapon,” said Gen. Milley. “We hope to be able to shoot it on ranges down at Fort Benning, [Georgia], hopefully … maybe sometime next year late summer.” 

    So in case you are wondering what the next high-tech assault rifle could look like, well, watch this video: 

     

  • The Myth Of The Eternal Market Bubble And Why It Is Dead Wrong

    Authored by Brandon Smith via Alt-Market.com,

    Economic collapse is not an event – it is a process. I’ve been saying this since the initial 2008 crash, and I suppose I will keep saying it until it burns into people’s minds because I don’t think that it is a widely understood concept. When alternative analysts talk about financial collapse, we are not talking about something that suddenly happens out of the blue, we are talking about an ongoing decline that occurs in stages. This decline is happening today in the U.S. and around the world, and it has been accelerating since the chaos of 2008. When we bring up the reality of collapse, we are referring to something that is happening NOW, not something waiting on the distant horizon.

    The reason why some analysts can see it and others cannot is most likely due to the delusions surrounding market bubbles. These fiscal fantasy worlds are artificially created by central bank intervention and represent an attempt to mislead the populace on the true health of the system – for a limited time. People with foresight see beyond the false data of the bubble to the core economic reality; other people see only the bubble and nothing else.

    When it comes to stock markets, bond markets, forex markets and the general casino economy, much of the public has a terrible inability to look beyond the next month let alone the next year. If the markets appear good now, the assumption is that they will always be good. If the central banks have intervened for the past 10 years, the assumption is they will intervene for the next 10 years.

    There is no accounting for why the bubble exists in the first place. That is to say, many people including most economists do not consider that these bubbles serve a particular purpose for the banking elites and that this purpose has an expiration date. All bubbles collapse, and the reasons why they collapse are observable and predictable.

    Still, the delusion persists that all this talk of “collapse” is simply “doom and gloom,” an event that might happen many years or decades from now, but it’s certainly not a threat taking place right in front of our faces. I attribute this misconception to several popular fallacies and propaganda arguments, and here they are in no particular order…

    Fallacy #1: Central Banks Will Continue To Prop Up Markets Indefinitely

    The newest generation of market traders and economists were still in high school and college when the 2008 crash hit equities. For the entirety of their careers, they have experienced nothing but an artificial economy supported by ongoing stimulus from central banks. They know of nothing else and know little of history, and thus they cannot fathom the possibility that central banks will one day pull the plug on their fiat life support.

    The problem is that 10 years of stimulus is nothing more than a pause in the process of fiscal collapse of a civilization. In fact, the economic decline of nations could be represented as a series of imploding bubbles; each one lasting perhaps a decade, leading to more power and control for central banks and less prosperity for everyone else.

    Anyone examining the history of recessions and depressions in the U.S. since the inception of the Federal Reserve in 1913 can easily see a steady pattern of artificially inflated asset values followed by pervasive downturns that siphon wealth from the middle class. This wealth never really returns. Each new downturn cripples the financial independence of the citizenry a little more, while international banks absorb more and more hard assets.

    What mainstream economists don’t seem to grasp is that central banks and international banks are ALWAYS positioned to benefit from the crash of the bubbles they create. It is the reason why they inflated the bubbles from the very beginning. Central banks are not afraid to allow markets to plummet, they WANT markets to plummet. The banks simply want to be sure they are set up for optimum benefit when the system does crash.

    Fallacy #2: Central Banks Will Never Stop Stimulus Measures

    I’m not sure why this fantasy persists despite all evidence to the contrary, but it does. Even today, I still receive letters from people arguing that the Fed will “never” end stimulus, never raise interest rates and never cut their balance sheet. Yet, this is exactly what is happening.

    I heard the same arguments years ago in 2013 when I predicted that the Fed would in fact taper QE. I heard them in 2015 when I predicted that the Fed would raise interest rates. And I have heard them for the past year after I predicted the Fed would continue cutting assets from their balance sheet.

    There are some people that might claim that there is no way for us to know if the Fed is actually cutting off stimulus to the economy because we have no way to audit their activities. While it is true that we do not have access to their legitimate financial records, only the records they release to the public, we can still see the affects that their policies produce. Meaning, it is obvious that the Fed is in fact cutting support to the markets given the behavior of those markets the past year.

    Emerging market stocks are crashing as the Fed announced continuing balance sheet cuts. Treasury yields are spiking at historic speed and interest costs are rising on everything from car loans to mortgage loans as the Fed increases interest rates. Foreign investment in U.S. Treasuries (or lack of investment) has become a major point of concern because QE support for T-bonds is gone. Massive corporate debt loads not seen since 2007/2008 are becoming more expensive as interest rates expand.

    This month Fed Chairman Jerome Powell ended all speculation on the matter when he indicated that the Fed would not only continue raising rates up to the neutral rate (where interest meets inflation), but that they could continue raising rates well beyond that. The blind faith based market is truly over.

    All evidence suggests that fiscal tightening is indeed happening. Some people refuse to see it because their biases prevent them from doing so. Perhaps they are heavily invested in U.S. stocks and don’t want to believe that the party is over. Perhaps they are incapable of admitting when they are wrong. It is hard to say. They argued for years that the Fed would never take the punch bowl away and they have been proven incorrect, but until they suffer direct consequences to their pocketbooks, they will not accept reality.

    Fallacy #3: The Fed Will Return To Stimulus Japanese-Style

    This is a very common claim designed to build false hope in markets. Bull rally hucksters and their followers have become so used to the easy life of “BTFD!” (Buy The F#$&ing Dip!) that they will apply any rationalization no matter how absurd in order to keep the fantasy going.

    The claim is that because Japan’s stimulus measures have been “successful” in keeping their markets afloat for at least two decades, this is the most likely strategy for the Fed and other central banks as well. What these people have not considered, though, is the speed at which Japan’s central bank bought up assets versus the speed that the Fed has bought up assets.

    The Bank of Japan’s balance sheet reached around $4.7 trillion (U.S.) at its peak, and as mentioned, this took decades of accumulation. The Fed’s balance sheet hit $4.5 trillion in the span of only 8-10 years.

    There is a point at which asset purchases and stimulus simply do not have the same effect on markets as they did when those purchases began. Debt starts to weigh heavily on further market gains over time. There are multiple reasons why the Fed is choosing to implode the bubble now — one of them is that time is running out and they want a controlled demolition rather that a crash with a mind of its own.

    The printing press is not magical; the basic rules of economics and mathematics still apply.

    I’ve also heard the argument that because US GDP is so much larger than Japan’s, comparing their central bank balance sheets is “not practical.” Meaning, the U.S. has a larger GDP, therefore the Fed should be able to increase its balance sheet much further than Japan has. This claim obviously relies on the notion that “GDP” as it is calculated today is an accurate measure of how much debt burden a nation can carry.

    If you consider Japan’s manufacturing capability alone, the U.S. with all its outsourcing pales in comparison in terms of economic resiliency. If you also consider that every time the government spends tax dollars these programs are often added to GDP as a form of “production” (this includes Obamacare), then the idea of GDP becomes a joke. The point being, it does not matter how healthy a nation’s GDP appears to be, the central bank can only create so much debt before it begins to drag down the core economy. The Fed has reached that limit.

    Fallacy #4: The Fed Can Hyperinflate Markets Perpetually

    This is the last-ditch delusion used by stock market addicts and disinformation peddlers to assert that the current bubble can and will be propped up for many years to come, even after the rest of the economy is in dire regression. It is based partially on historic examples of fiscal collapses that led to inflation. Sometimes this inflation flows directly into stock markets while the rest of the system sinks due to investors looking for a safe haven, and also due to central banks manipulating asset prices. This occurred in Weimar Germany during the hyperinflationary route of the 1920s, however, people who make this argument do not know the actual history of that collapse.

    Germany did indeed see a considerable stock market rally just at the peak of the hyperinflationary crisis, but this period only lasted from 1924 to 1927. In 1927, the Federal Reserve, France and the German central bank intervened to deliberately crash the bubble. While central bankers today still assert the lie that the cause of this downturn was the gold standard, the truth is that it was central bank tightening of monetary policy into an already unstable economic environment that caused the crash.

    An interesting article on this issue for those that would like a better historical reference is ‘With a Bang, Not a Whimper: Pricking Germany’s “Stock Market Bubble” in 1927 and the Slide into Depression‘ by Hans-Joachim Voth.

    Does any of this sound familiar? It should. This is exactly what the Fed is doing today.

    In the U.S. for the past decade we have already witnessed our period of inflation in stock prices. Now, the central bank is collapsing the bubble, just as they did in Weimar Germany, just as they did here in the U.S. during the Great Depression as Ben Bernanke admitted in 2002, just as they have done in every market bubble for the past century.

    I predicted in February of this year in my article ‘Is A Massive Stock Market Reversal Upon Us?’that the early stock market drop would be followed by a period of mindless exuberance and a market bounce (which is what happened this past summer), followed by a return to an extreme stock plunge in the last quarter of 2018.  This seems to be occurring now.

    There is no eternal market bubble. There never will be. If not for the reason that economic fundamentals make it impossible, then for the reason that crashing these bubbles benefits globalists and banking elitists.

    The goal? I believe the goal is to consolidate total power over production and labor using the deliberate institution of a poverty-based civilization. Beyond that, the goal is to make the populace perpetually desperate to the point that they are socially malleable. In order for the bankers to establish what they call their “New World Order,” they need chaos to tenderize the masses, but they also have to be seen as saviors that deserve to be in a position of authority over the global economy. They need to create disasters so they can then ride in on their white horse and save us from those disasters.

    Why would central banks continue to perpetuate market bubbles when the destruction of those bubbles gives them opportunities for greater power?

    *  *  *

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  • China Trade Data Suggests Trump Is Not "Winning" The 'War'

    While most attention among global onlookers is focused on the almost unbelievable divergence between US and Chinese stocks this year, actual ‘real’ Chinese import and export data suggest President Trump is far from winning this trade war… in fact it’s never been worse.

    Headline trade figures show China exports to the rest of the world grew at 14.5% YoY in USD terms (almost double expectations) and imports rose 14.3% YoY in USD terms (below expectations and well below August’s 20% rise).

    However, all eyes were on the US-China interaction and that’s where the fun and games begin…

    Chinese exports to the US rose 14.0% YoY in USD terms – the most since February – but, Chinese imports from the US actually dropped 1.2% YoY in USD terms

    That pushed China’s exports to US to a new record high and saw China’s imports from the US sink to 6-month lows… sending China’s trade surplus with the US to a new record high…

    As Bloomberg notes, China’s exports rebounded, while imports remained robust, thanks to strong demand at home and abroad despite worsening relations with the U.S.

    China’s exports have been growing robustly all year, in the face of rising tariffs and increasing uncertainty over relations with the U.S. Companies front-loading trade to get ahead of the expected tariff increases might explain part of the growth in the third quarter, but that would likely wane as the relationship between the world’s two biggest economies deteriorates.

    “Chinese exports look set to weaken in the coming quarters as global growth slows,” wrote economists from Capital Economics in a note. “U.S. tariffs will also be a drag, although front-loading by US importers mean that much of the impact won’t be felt until next year.”

    In other words, by the metric that President Trump judges the trade relationship with China – things have never been worse…ever!

    However, trade growth may slow in the fourth quarter, the customs administration’s spokesperson said at a press conference, while cuts to import tariffs are boosting inbound shipments.

  • The Gold Standard: Protector Of Individual Liberty And Economic Prosperity

    Authored by Antonius Aquinas, annotated by Acting-Man’s Pater Tenebrarum,

    A Piece of Paper Alone Cannot Secure Liberty

    The idea of a constitution and/or written legislation to secure individual rights so beloved by conservatives and among many libertarians has proven to be a myth. The US Constitution and all those that have been written and ratified in its wake throughout the world have done little to protect individual liberties or keep a check on State largesse.

    Sound money vs. a piece of paper – which is the better guarantor of liberty? [PT]

    Instead, in the American case, the Constitution created a powerful central government which eliminated much of the sovereignty and independence that the individual states possessed under the Articles of Confederation.

    While the US Constitution contains a “Bill of Rights,” the interpreter of those rights and the protections thereof is the very entity which has enumerated them.  It is only natural that decisions on whether, or if such rights have been violated will be in favor of the State.

    Moreover, nearly every amendment which has come in the wake of the Bill of Rights, has augmented federal power at the expense of the individual states and that of property owners.

    History has shown the steady erosion of individual rights and the creation of “new rights” and entitlements (education, health care, employment, etc.) which have occurred under constitutional rule.  Instead of being a limitation on government power, constitutions have given cover for a vast expansion of taxation, regulation, debt, and money creation.

    As Murray Rothbard notes in Anatomy of the State: “All Americans are familiar with the process by which the construction of limits in the Constitution has been inexorably broadened over the last century. But few have been as keen as Professor Charles Black to see that the State has, in the process, largely transformed judicial review itself from a limiting device to yet another instrument for furnishing ideological legitimacy to the government’s actions. For if a judicial decree of “unconstitutional” is a mighty check to government power, an implicit or explicit verdict of “constitutional” is a mighty weapon for fostering public acceptance of ever-greater government power.”  Rothbard quotes Professor Black in several footnotes; one of them states: “Where the questions concern governmental power in a sovereign nation, it is not possible to select an umpire who is outside government. Every national government, so long as it is a government, must have the final say on its own power.” [PT]

    Elimination of the Gold Standard as a Check on Government Power

    While taxation has always been a facet of constitutional governments, it has been the advent of central banking and with it the elimination of the gold standard which has provided the means for the state to become such an omnipresent force in everyday life.

    Irredeemable fiat paper money issued by central banks has also led to the entrenchment of political parties which has allowed these elites to create and subsidize dependency groups which, in turn, repeatedly vote to keep the political class in office.

    Without the ability to create money and credit, the many bureaucracies, regulations, and laws could neither be created or enforced.  This would mean that the vast and powerful security and surveillance agencies could not exist or would be far less intrusive than they currently are.  With commodity money, debt creation would have to be repaid in gold, not monetized as it is currently done through the issuance of paper currency.

    Just as important, it would have been next to impossible for the two world wars to have been fought and carried to their unimaginable destructive ends.  None of the populations involved would have put up with the level of taxation necessary to wage such costly undertakings.

    Few of the wars which followed (most of which have been instigated by the US) could have taken place without central banking.  Nor could the level of “defense” spending – currently at a whopping $717 billion for fiscal year 2018 – be financed if the US was on a commodity standard.

    Total US federal debt streaks above USD 21 trillion. [PT]

    Under a gold standard, governments would have to rely on taxation alone.  Since citizens directly feel the effects of taxation, there is a “natural level” that it can be raised. 

    Punitive tax rates usually lead to a backlash and potential social insurrection which strike fear in the hearts of political elites.

    Recent projections by the Congressional Budget Office again demonstrate that constitutional government provides little restraint on spending.

    If present trends continue, the federal government will spend more on its interest serving its debt than it spends on the military, Medicare, or children’s programs.  It is also expected that next year’s interest on the debt will be some $390 billion, up an astonishing 50 percent from 2017. And, for the entire fiscal year of 2018, the gross national debt surged by $1.271 trillion, to a mind-boggling $21.52 trillion.

    Annual interest expenditures on US government debt: despite historically extremely low interest rates, the cost of servicing the public debt of the US has soared to new record highs. [PT]

    At one time, economists used to speak of the pernicious effects that “crowding out” had on the economy.  Since the onset of the “bubble era,” talk about deficits has almost dropped out of financial discussions.  Yet, the reality remains the same: public spending and borrowing divert scarce resources away from private capital markets to unproductive wasteful government projects and endeavors.

    Conclusion: Sound Money is the Solution

    For those who seek a reduction in State power, defense of individual rights, and economic prosperity, the re-establishment of a monetary order based on the precious metals is the most efficacious path to take.  Such a social system would not require elaborate legislation or fancy proclamations of man’s inalienable rights, but simply a return to honest money – gold!

  • Entire F-35 Fleet Grounded After South Carolina Crash

    The Pentagon has temporarily suspended F-35 flight operations in the wake of a Marine F-35B crash in South Carolina last month. All variants of the jet, including the “A” version used by the Air Force and the Navy’s “C” version are included. 

    The entire F-35 fleet will undergo inspections for a fuel tube within the engine, which are expected to be completed within 48 hours, according to Task & Purpose, citing a Pentagon spokesman. 

    “If suspect fuel tubes are installed, the part will be removed and replaced,” Joe DellaVedova, a spokesman with the Pentagon’s Joint Program Office, which oversees the F-35, said in a statement.

    “If known good fuel tubes are already installed, then those aircraft will be returned to flight status,” DellaVedova said.  “Inspections are expected to be completed within the next 24 to 48 hours.” –Task & Purpose

    “The primary goal following any mishap is the prevention of future incidents,” DellaVedova said. “We will take every measure to ensure safe operations while we deliver, sustain and modernize the F-35 for the warfighter and our defense partners.”

    The office said the grounding “is driven from initial data from the ongoing investigation of the F-35B that crashed in the vicinity of Beaufort, South Carolina on 28 September. The aircraft mishap board is continuing its work and the U.S. Marine Corps will provide additional information when it becomes available.”

    The grounding comes after the Pentagon announced that a Marine Corps F-35B conducted the platform’s first-ever combat mission on Sept. 27. The Marine Corps’ aircraft launched from the amphibious warship Essex, striking targets in Afghanistan.

    In April, a Marine Corps F-35B out the Marine Corps air station at Cherry Point, North Carolina, was forced to make an emergency landingwhen the aircraft fuel light came on. –Military Times

    The F-35B is a short takeoff, vertical landing variant of the design – which allows pilots to hover and land vertically like a helicopter. Since the problem which led to the grounding affects all models, it appears unlikely that the problem is connected to the VTOL capabilities on the Marines’ design. 

    The issue as described by the JPO indicates the issue is believed to come from a subcontractor who supplied the fuel tubes for engine manufacturer Pratt and Whitney.

    A spokesman for the F-35s manufacturer, Lockheed Martin, said Thursday morning that industry partners were working with the F-35’s Joint Program Office to investigate the problems. –Military Times

    “We are actively partnering with the Pentagon’s F-35 Joint Program Office, our global customers and Pratt & Whitney to support the resolution of this issue and limit disruption to the fleet,” said a Lockheed spokesman.

    Meanwhile, the grounding comes amid orders by Secretary of Defense James Mattis ordering military readiness on four planes above 80% – including the F-35, by next September. According to the most recent data, the F-35A has a 55% readiness rate at present. 

    While the Marines are the first US service to fly the joint strike fighter, the F-35 has been used by the Israeli air force – confirming that the plane had been used in May during two airstrikes. 

    The F-35 was declared operational in 2015 after working out most of the kinks in the most expensive program in the Pentagon’s history. The Air Force, Navy and Marines plan to purchase a total of 2,456 F-35s at an estimated cost of $325 billion. The program is expected to top around $1 trillion to “develop, produce, field and sustain” over its lifetime according to Military Times, citing the Government Accountability Office.

    Full statement from the Joint Program Office: 

    The U.S. Services and international partners have temporarily suspended F-35 flight operations while the enterprise conducts a fleet-wide inspection of a fuel tube within the engine on all F-35 aircraft. If suspect fuel tubes are installed, the part will be removed and replaced. If known good fuel tubes are already installed, then those aircraft will be returned to flight status. Inspections are expected to be completed within the next 24 to 48 hours.

    The action to perform the inspection is driven from initial data from the ongoing investigation of the F-35B that crashed in the vicinity of Beaufort, South Carolina on 28 September. The aircraft mishap board is continuing its work and the U.S. Marine Corps will provide additional information when it becomes available.

    The primary goal following any mishap is the prevention of future incidents. We will take every measure to ensure safe operations while we deliver, sustain and modernize the F-35 for the warfighter and our defense partners.

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

  • New Data Shows Federal Reserve Is Causing More Inequality

    Authored by Ryan McMaken via The Mises Institute,

    Back in August, Bloomberg interviewed Karen Petrou about her research on quantitative easing and the Fed’s policies since the 2008 financial crisis. What she has discovered has not been encouraging for people who aren’t already high-income, and in recent research presented to the New York Fed, she concluded Post-crisis monetary and regulatory policy had an unintended but nonetheless dramatic impact on the income and wealth divides.”

    This assessment is based on her own work, but also on a 2018 report released by the Minneapolis Fed.  The report showed that both income and wealth growth in the US have been much better for higher-income households in recent decades

    Notably, when indexed to 1971 (the year Nixon ended the last link between gold and the dollar) we can see the disparity between the top wealth groups and other groups:

    Petrou continues:

    What did we learn [from the Minneapolis Fed report]? This new dataset shows clearly that U.S. wealth inequality is the worst it has been throughout the entire U.S. post-war period. We also know now that the U.S. middle class is even more“hollowed out” than we thought in terms of income, with any gains made by the lower-middle class sharply reversed after 2007.

    Indeed, the report concludes: “…half of all American households have less wealth today in real terms than the median household had in 1970.”

    A closer look at income data also suggests that income growth has been especially anemic since 2007. Using data from the Census Bureau’s 2017 report on income and poverty, we find that incomes for the 90th percentile are increasingly pulling away from both the median (50th percentile) income and from the 20th-percentile income.

    The household income for the 20th percentile increased 70 percent since 1971, while it has only increased 20 percent at the 20th percentile.

    Of course, we might think, “we should be happy that the 20th-percentile income went up by 20 percent!” True enough, but as we can see by merely eyeballing the graph, most of that income growth at the lower income levels occurred before the year 2000. Incomes haven’t moved much since then.

    Indeed, since the year 2000, income increased 12 percent for the 90th percentile, but only 2.4 percent for the median household. It declined 3.7 percent at the 20th percentile.

    Moreover, Petrou notes,

    the latest census data show that U.S. median household income in 2016 rose in part because more families have more wage-earners. Two low-wage jobs may seem like more employment, but they are reflecting the ever-greater struggle lower-income Americans have making ends meet.

    Similarly, the overall wealth data offers little to get excited about. As noted here at mises.org last month, median wealth in the US is still well below the peak levels pre-2007.

    That’s according to Edward Wolff’s 2007 report. According to the Fed’s 2017 survey on consumer finances, median wealth reached $97,300, which is still down from 2007’s level of $139,700. Those in the 90th percentile experienced much more growth in wealth, with an increase from $1,054,000 in 2007 to $1,186,000 in 2016.

    What Role Does the Fed Have in All of This?

    As the Federal Reserve has become more interventionist, more inflationary, and more prone to regulate the private sector, incomes have stagnated. For example, gaps in wealth an income have been growing since the 1980s, but they worsen significantly over the past decade as monetary policy became more and more inflationary and activist.

    Petrou adds:

    It’s common knowledge that income inequality in the U.S. has been getting increasingly worse since 1980. But what I’ve been pointing out in some of my blog posts is that it became hugely worse after the financial crisis. Were there underlying issues pre-2008? Absolutely. But we had more of a middle class even in 2006 than we do now. … [I]f you look at the Minneapolis Fed data, as well as many other analyses, [growth in inequality] happens gradually prior to 2008. Then it actually flattens out in 2008 because rich people lost money in the crash, which narrowed the inequality gap. But starting in 2010, the gap widens dramatically.

    The Fed became far more active in its interventions after 2008, leading to a variety of consequences:

    The Fed did two things with huge inequality implications. First, with its massive quantitative easing, it sucked $4.5 trillion of assets out of the banking system. The idea was that it would empty out the bank balance sheets so that they would start to make loans. And that didn’t happen —initially the banks were too weak, and as they recovered, the rules created significant impediments. If you look at who is getting loans it is large corporations, not small businesses. Second, the Fed’s low-interest policy gave rise to yield-chasing. And what has the stock market done since 2010? Everybody who has money has seen their financial assets appreciate dramatically. Everybody who doesn’t have money, which is the bottom 90 percent, what is their principal source of wealth? Houses? House-price appreciation for expensive houses is way up since 2012. But overall, real U.S. house prices are down 10 percent.

    On the regulatory side, the Fed made it more difficult for banks to cater to small businesses and other borrowers who are less well-known and higher risk. At the same time, the Fed has made it so that lenders don’t have to worry about catering to a broad cross-section of borrowers precisely because the Fed’s regulation and its too-big-to-fail doctrine lower the relative opportunity cost of ignoring borrowers at the lower end.

    Meanwhile, ultra-low interest rate policy leads to yield-chasing which favors the already-wealthy at the expense of households of more ordinary means. Yield-chasing pulls money out of safer, more conservative investments — favored by people of modest means — and drives more investment toward riskier hard-to-access investment instruments.

    Petrou describes some of the effects of yield-chasing:

    As our research shows, QE exacerbates inequality because it takes safe assets out of the U.S. financial market, driving investors into equity markets and other financial assets not only to place their funds, but also in search of yields higher than those possible with ultra-low rates. The Fed hoped that soaking up $4.5 trillion in safe assets would stoke lending, and to a limited degree it did. However, new credit largely goes to large companies and other borrowers who have used it for purposes such as margin loans and stock buy-backs, not investment that would support strong employment growth. Growing household indebtedness in the U.S. is principally consumption or high-price housing driven and thus also a cause – not cure – of inequality.

    And then there is the problem of asset-price inflation. This contributes to economic inequality in more than one way.

    Asset price inflation is largely a result of inflationary monetary police in which newly created money continually enters the economy. This, in part, increases economic inequality through Cantillon effects.  As new money enters the economy, it benefits some people — usually high-income people — more than others. The new money does not enter the economy evenly and equally for everyone, but benefits certain politically-connected firms, institutions, and persons first. These people and organizations can then use the new money before prices in the economy adjust to reflect the new, larger money supply.

    But there’s more to asset-price inflation’s role in inequality.

    As Petrou notes above, “Everybody who has money has seen their financial assets appreciate dramatically.” For those who already own sizable amounts of stocks, for instance, there won’t be a problem. The same will be true of people who own real estate in fashionable and expensive markets.

    Stocks – Not Housing – Are Favored by Post-2008 Inflationary Policy

    And here’s the rub: moderate- and low-income people tend to have much more of their wealth in residential real estate than in the stock market.

    This can be seen in the Minneapolis Fed report which looks at how higher-income households have built wealth more in stock assets than in housing:

    Since 2007, wealth growth in housing has been negative while growth in stock-based wealth has remained positive:

    The overall effect here has been that higher-income investors, who have less of their wealth in homes — and more in stocks — have benefited more from the asset inflation of the past decade. The effect has been rising inequality.

    So we might then ask ourselves: “why don’t more moderate- and low-income people just buy more stocks?”

    Part is this is due to tax incentives, which reward putting money into housing rather than into stocks. Moreover, many people put money into homes rather than stocks because homes have the added perk of providing a place to live.

    While it may be prudent — all else being equal — to buy less house while buying more in stocks, the Fed’s ultra-low interest-rate policies make housing relatively more attractive as a place to park one’s wealth.

    And finally, investing in stocks remains something of a perk reserved to those with a surplus.  After all,  one can rarely elect to simply not spend money on housing. It’s easy, though, to just not buy stocks. In most cases, money must be spent on housing in some form. And many elect to purchase housing, since, in many cases, houses are often perceived  — often with good reason — as a fairly safe and stable investment.

    If we then add to this many deliberate efforts by both the Fed and the federal government to increase the homeownership rate, it’s not hard to see why so many have ended up with a sizable portion of their wealth in housing.

    While the central bank certainly can’t be blamed for all the factors at play here, it nevertheless plays a significant role. Through a combination of inflationary monetary policy, regulation, and asset purchases, the Fed has made a sizable contribution to an economy that favors certain types of investments, certain institutions, and certain purchasing patterns. Fed policy now favors high-income earners and investors over low- or moderate- income earners and investors. The result has been a rapidly widening wealth an income gap over the past decade.

  • "It's Not Such A Crazy Idea": The Hunt For Another Red October

    On Monday, Morgan Stanley’s equity strategist Hans Redeker made an ominous observation: highlighting the decline of easy monetary policy and the rapid shrinkage of central bank liquidity…

    … Redeker noted that the recent spike in bond volatility has been mostly a side-effect of the receding monetary tide.

    Why the focus on bond volatility, i.e., the MOVE Index? For one reason: while rising FX and equity volatility can remain isolated events, rising bond market volatility tends to steer other volatility indices too, Redeker said. Hence, rising bond volatility makes a difference when volatility for risky assets diverged on the back of liquidity concentration in the US.

    This led him to conclude that “in many aspects, the current constellation reminds us of what happened in autumn 1987”, which we recalled as follows:

    The Fed was hiking rates, deploying a hawkish tone. Chair Greenspan had just taken office, providing hawkish rhetoric, and the global economy seemed to trail the better US performance supported by the second Reagan tax package kicking in in 1986. The consensus assumed the rest of the world (RoW) – notably Europe – was running wider output gaps and hence was surprised when the Bundesbank withdrew liquidity in September 1987. In this sense, we would not dismiss hawkish remarks from ECB’s Knot, who said that ECB rate hikes could come earlier than markets are expecting.

    Just two days later, and the Dow over 1,400 points lower, it appears Redeker was on to something.

    But not everyone agrees. As Bloomberg’s latest macro commentator John Authers, who recently joined from the FT, writes in a note tonight, whereas there is a growing chorus that the market may be coming up against it own Black Monday moment – and historically half of the biggest market crashes in the US have taken place in October which is statistically significant…

    … Authers believes that despite the growing concerns, it’s not really quite as dire as what Morgan Stanley suggests.

    He explains why in the note below.

    The Hunt for Another Red October

    It is not such a crazy idea. The elements of a narrative that finds a parallel between the alarming sell-off in equities over the last few days and the epic disaster that was the Black Monday crash of October 19, 1987, do exist.

    Then, like now, stocks had been rising despite a menacing rise in bond yields. Then, like now, there is a new and untested chairman at the Federal Reserve (for Alan Greenspan then, read Jerome Powell now); and then like now, the U.S. economy had just enjoyed a big tax cut at the end of the previous year, after much drama involving Congress and the Republican president.

    So it should be no surprise that references to Black Monday, when U.S. stocks fell more than 20 percent, are proliferating ahead of its 31st anniversary. Earlier this week, Hans Redeker’s team at Morgan Stanley produced a note suggesting that the greatest risk from the parallel was the implication that European monetary policy would also now have to tighten, as happened in 1987. Similar arguments might apply to Japan, where the Bank of Japan has been aggressively expanding its balance sheet ever since the Fed desisted from doing so.

    Scott Minerd, the widely quoted chief investment officer at Guggenheim Partners, also drew the parallel, saying “Rising rates and declining stocks echo shades of October 1987.” Plenty on social media have been making similar comparisons.

    Any comparison to Black Monday is bound to set alarm bells ringing. And in any case, almost all of history’s most famous market crashes happened in October.

    However, even with the S&P 500 down more than 5 percent in four days, the comparison is overdone. Equities were overblown entering this sell-off, but looked nothing like as frothy as they did in 1987:

    Further, the international context is starkly different. In 1987, the party in the developed world outside the U.S., covered by the MSCI EAFE index, was just as intense as it was on Wall Street. The EAFE had gained 42 percent by October 14 that year, before it joined the subsequent sell-off to the full. This time around, the U.S. has stood alone; the EAFE is currently down 7.7 percent for the year, and has been moving gently lower for most of the year. The FTSE’s All-Word stock index, including all developed and emerging markets, entered this month up only 2 percent for the year. The ground for a dramatic short-term correction, therefore, is far less fertile than it was in the second week of October 1987

    If we turn to the move in bond yields, widely taken as a reason for the pressure on stocks, we can see that the rise this year is indeed roughly comparable with the rise that was experienced in 1987. There is a true tightening of financial conditions, and this can only be expected to have an effect on the stock market

    The problem with this, however, is that the bond market starts from a much lower and more accommodative level, and with cheap money available in the rest of the world. This move feels tight for traders who have grown accustomed to rates of virtually zero, but in absolute terms the rise in 10-year bond yields was far greater in 1987. At this point, the 10-year Treasury yield has gained some 70 basis points for the year; by the same point in 1987, it had risen by some 300 basis points

    This is already another Red October for the stock market, and there are indeed a few similarities with 1987. But on this occasion the historical comparison is unduly alarming. There are good reasons to fear that stock markets could fall a lot further from here, but there is no particular reason to think that we are primed for a massive financial accident on the scale of what happened in October 19, 1987

    Is Authers right? There are less than three weeks left in the month of October (and four until the midterm elections). We’ll know the answer in less than a month.

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Today’s News 11th October 2018

  • Saudi Prince Alwaleed's Net Worth Down 60% From 2014 Peak

    After being arrested and imprisoned by Saudi police during Saudi Prince Mohammad bin Salman’s corruption crackdown cash grab late last year, Prince Alwaleed bin Talal, Saudi Arabia’s richest man, was finally released (after reportedly being tortured and beaten) in January, having signed an agreement that would allow him to do more about freely.

    But his freedom didn’t come cheap.

    As we reported at the time, Saudi authorities reportedly demanded $6 billion in cash from the prince in exchange for his freedom. When he resisted, he was reportedly beaten and tortured at the Riyadh Ritz Carlton, where he was being held along with dozens of other royals and wealthy Saudi businessmen.

    Talal

    While negotiations were ongoing, WSJ reported at the time that Alwaleed had reportedly offered a piece of his holding company, Kingdom Holding Co., and that the Saudi government was considering accepting this as payment.

    Prince al-Waleed is talking with the government about instead accepting as payment for his release a large piece of his conglomerate, Kingdom Holding Co., people familiar with the matter said. The Riyadh-listed company’s market value is $8.7 billion, down about 14% since the prince’s arrest. Kingdom Holding said in November that it retained the support of the Saudi government and that its strategy “remains intact.”

    The terms of Alwaleed’s release were never disclosed, so we can’t say for certain what, if anything, he surrendered in exchange for his freedom. But in it’s latest update to its “billionaire’s list” Bloomberg has provided a few clues. According to Bloomberg, Prince Al-Waleed’s fortune has decreased by more than $3 billion over the past year – and more than $20 billion since 2014.

    While most of this decline can be attributed to a drop in Kingdom Holding shares (the stock, which trades on the Tadawul, took a hit on news that Alwaleed had been imprisoned), Al-Waleed’s family office said his personal holdings of real-estate, stocks and other assets took a nearly $800 million hit, which they blamed on “minor adjustments”.

    The fortune of Saudi Arabia’s richest person, Prince Alwaleed bin Talal Al Saud, has dropped to $15.2 billion, its lowest level since the Bloomberg Billionaires Index began tracking him in April 2012.

    The value of his portfolio of public equities, stakes in closely held companies and Saudi real estate fell by $760 million in the first three quarters of the year, according to an emailed document from his private office. The decline was due to “minor adjustments” in the valuation of assets and some disposals, including the sale last month of his stake in U.S. ride-hailing company Lyft Inc. to his investment company, Kingdom Holding Co.

    Meanwhile, Al-Waleed’s stake in Kingdom has lost 70% of its value since 2014.

    Alwaleed’s most valuable asset, a 95 percent stake in Kingdom Holding, has dropped 70 percent of its value since hitting a record high in 2014. The firm’s shares fell more than 20 percent following Alwaleed’s sudden detention in an anticorruption crackdown last November and have never fully recovered.

    While $800 million is a hefty fine, it appears Alwaleed did a decent job of advocating for himself: He managed to talk MbS and his cronies down from $6 billion to just under $1 billion.

  • S-300 Vs. F-35: Stealth And Invincible Are Not Exactly Synonyms

    Authored by Andrei Akulov via The Strategic Culture Foundation,

    How effective is the S-300 PMU-2 “Favorit” that Russia has just delivered to Syria? Especially when employed against the F-35 stealth fighters that Israel intends to make more use of when attacking targets in Syria? Who has the edge?

    This is truly a hot topic for the press right now. It would be better, of course, to avoid the military hostilities and leave this as a theoretical, unanswered question, because no definite answer is possible until a real shootout takes place. Stealth technology includes both active and passive measures that reduce visibility and the chance of detection. Some of those are classified, as are the specifications and capabilities of the S-300. This makes it much more complicated to offer predictions or conclusions. But the known facts can be considered impartially and objectively.

     Israeli officials play down the significance of the shipment of the S-300 to Syrian government forces.

     “The operational abilities of the air force are such that those (S-300) batteries really do not constrain the air force’s abilities to act,” said Tzachi Hanegbi, Israel’s regional cooperation minister.

    “You know that we have stealth fighters, the best planes in the world. These batteries are not even able to detect them.”

    Defense Minister Avigdor Lieberman said in April that “if anyone attacks us, we will retaliate, regardless of S-300, S-700 or any anything else’s presence there”. 

    The Pentagon has also cast doubt on the S-300’s effectiveness.

    Let’s give the devil his due. The F-35 is a fine example of low observable aircraft with extraordinary capabilities. It’s a formidable weapon, but so is the S-300. If the worst happens, Israel’s high-end F-35I Adir aircraft will be checkmated by this Russian-made, state-of-the-art air-defense system.

    A stealth aircraft is not invincible. It has its strengths and weaknesses. In Syria, Israeli F-35s will be up against a tight, integrated air-defense network with multiple radars trying to detect and track the target from different directions.

    Excessive use of stealth technology restricts the combat capabilities of an aircraft like the F-35. A plane based on stealth technology does not perform exceptionally well in combat. It cannot carry many weapons because everything is hidden inside the body. Its ability to remain invisible is reduced as soon as the radar is turned on. Low frequencies can detect a stealth aircraft. A bomb bay that has been opened to launch weapons will also give the plane away.

    The S-300’s 48N6E2 missiles boast single-shot kill probability of 80% to 93% for an aerial target, 40% to 85% for cruise missiles. and 50% to 77% for theater ballistic missiles. The Russian system uses the 96L6 all-altitude detector and acquisition radar, which works in L-band. It has a 300 km range and enhanced resolution. The S-300 PMU-2 version can detect and track 100 targets. The radar is said to be able to detect stealth targets.

    Large wavelength radiations are reflected by “invisible” aircraft. Radar that operates in the VHF, UHF, L and S bands can detect and even track the F-35 without transmitting weapons-quality track. It is true that no accurate targeting is possible, but at least you can tell where the plane is.

    The S-300’s vertically launched missiles can be re-targeted during flight. The explosion is so powerful that no kinetic kill is needed. Multiple killing elements will strike targets throughout the vicinity.

    The IAF F-35s still need to be integrated with other assets in order to enhance their chances of carrying out missions. Just to be on the safe side, they will probably be escorted by electronic warfare aircraft, which are not stealth, thus giving away their position and providing the enemy with enough time to take countermeasures. Israel has only 12 F-35s, with 50 more arriving by 2024. The price tag for each is about $100 million. It’ll be a long time before they are in place and integrated into the Air Force. And twelve are simply not enough.

    Besides, the aircraft still needs to be upgraded with the full operational capability of Block 3F and subsequent Block 4 software and hardware configurations.

    Once the S-300s are operational, all other Israeli non-stealth planes will face huge risks any time they fly an offensive mission into Syria. It should also be taken into account that Russia will jam the radar, navigation, and communications systems on any aircraft attacking targets in Syria via the Mediterranean Sea, as Russian Defense Minister Sergei Shoigu warned on Sept. 24, 2018. 

    Israel boasts a broad repertoire of standoff weapons, along with highly advanced electronic warfare systems and enhanced cyber capabilities. It also has very experienced and well trained personnel. Nevertheless, the S-300 in Syria is a deterrent to be reckoned with. Hopefully, the peace process in that war-torn country will move forward and there will be no escalation to provoke an S-300 vs. F-35 fight.

  • Imminent Trial Flights Expected Of Chinese Stealth Bomber – "Deterrence To Our Enemies" 

    Earlier this year, state-run Aviation Industry Corporation of China teased audiences worldwide with a promotional video offering the first official glimpse of the country’s first stealth bomber. 

    Now, it seems a popular daily Chinese tabloid newspaper has confirmed that the Hong-20, or H-20 is ready for trial flights. 

    Song Zhongping, a military expert and TV commentator, told the Global Times on Tuesday that trial flights of China’s next-generation stealth bomber would be immient. He said disclosing the new plane is a potential deterrence to our enemies.

    “Usually the development of equipment and weaponry of the People’s Liberation Army is highly confidential,” he said. 

    Shanghai-based news site thepaper.cn said, revealing the bomber’s name before trials show strength in the Chinese aviation industry.

    In August, state broadcaster China Central Television reported in a documentary that “the development of new long-distance strategic bomber, Hong-20, had made great progress.” The bomber marked the 91st anniversary of the founding of the People’s Liberation Army, which Chinese officials see the stealth plane as a “game changer,” could enter series production much sooner than estimated. 

    The documentary was the first time “Hong-20” appeared officially in the public domain. “Hong” is the first character of Honghaji, “bomber aircraft” in Chinese. 

    The public unveiling of the bomber suggested that Aviation Industry Corp. might have concluded testing of hydraulic pressure, electricity supply, and avionics systems, said song. 

    “The trial flight will come soon,” he added.

    Specifications of the new bomber are unknown, but it seems the Chinese did a great job copying the profile of the American Northrop Grumman B-2 Spirit stealth bomber, both look pretty similar. 

    “Observers say the design objective is for the long-range H-20 to remain airborne for some 8,000 kilometers to jet away beyond the second island china – formed by Japan’s Ogasawara and Volcano Islands as well as Guam and the US Mariana Islands in the middle portion of the Pacific — without aerial refueling,” said Asia Times. 

    News Corp. Australia Network speculated earlier this year that the stealth bomber could reach northern regions of Australia, after taking off from Chinese militarized islands in the South China Sea. 

    The Global Times quoted Fu Qianshao as saying the ultimate goal for the H-20 is to boost operational range to 12,000 kilometers with 20-tons of payload. 

    Asia Times pitched the idea that the stealth bomber could be the solution for China to fire missiles at American mainland targets. 

    Add next-generation stealth bombers to the list of military might that China is acquiring before a military conflict with the US breaks out. 

     

  • The U.S. Is "Morphing" Into The U.S.S.A. – The United States Of Soviet America

    Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

    We are experiencing an ever-increasing level of  surveillance over the citizenry, government censorship and closed-door policies, control and manipulation of the media, and a “hardline” shift of all institutions to the left. The institutions I’m referring to specifically are the educational system (better termed a system of indoctrination), the courts, the religious institutions…every one of them are all “leaning” toward (if not striving toward) full blown socialism. Let us recall a key quote:

    “The goal of Socialism is Communism.” – Lenin

    Just as recently as Tuesday, 10/2/18, we have this stunning announcement as quoted by the Washington Examiner by none other than the Secretary of the Department of Homeland Security. Here’s the excerpt:

    Homeland Security Secretary Kirstjen Nielsen warned Tuesday the public should steer clear of Russian-owned entities that pose as legitimate news outlets. “I encourage everybody, if you are reading something … and it suddenly takes you to RT and Sputnik, be aware. I mean, those are state-sponsored news outlets. They’re not independent,” Nielsen said at a cybersecurity summit in Washington, D.C.

    Yeah, can you imagine that? Those Russian news sources are “state-sponsored,” and “not independent.” So ABC, CBS, and the New York Times are independent? Freedom of the press, right?

    And how many White House press briefings would tolerate one person… one reporter from the Independent News Media? If it isn’t AP (Associated Press) sanctioned with a card, credentials, and lip balm, nobody is getting into those briefings. And how about all of the “Presidential Debates,” such as those modified by Cooper, Wolf Blitzer, and the like? The ones with the questions and their answers figured out a month in advance…with phony people and actors pretending to ask the questions spontaneously. The show must go on, right?

    What about the media bias and slant away from the President right now? We are not talking about policies instituted by the President. We are discussing policies of censorship and watered-down propaganda that eclipses Pravda and Isvestia of the Soviet Union for its Hollywood polish and panache.

    We have become as the Soviet Union, and worse: there is no freedom of speech, freedom of the press. We are in a “soft time” right now prior to the massive clamping-down that will occur when the globalists have their clawed-fingered control over the White House and all of Congress again. The clamping will be nothing more than the final evisceration of the Constitution and complete restrictions, martial law, and open enslavement being in place and out in the open.

    Now, once again, let me remind everybody that this is the DHS Secretary we’re talking about…so whoever writes about what she said or about the DHS will be scrutinized by that agency. Bradford Betz of Fox News wrote an article 4/7/18 titled Homeland Security database would track journalists, ‘media influencers’: report. I wrote an article about the spokesperson for the DHS subsequently. Here’s an excerpt from Betz’s piece:

    The Department of Homeland Security is seeking contractors for the creation of a database that would monitor news outlets around the world and collect information on journalists, bloggers and “media influencers.” The plan comes amid concerns of so-called “fake news” and its effect on U.S. elections, the Chicago-Sun Times reported. A DHS solicitation for bids on the project appears on the website FedBizOpps.gov. Prospective contractors are invited to contact two DHS staffers, whose email addresses appear in the post. DHS spokesman Todd Houlton tweeted Friday that despite what some reporters may suggest, the solicitation is nothing more than the standard practice of monitoring current events in the media. “Any suggestion otherwise is fit for tin foil hat wearing, black helicopter conspiracy theorists,” he said.

    The DHS Media Monitoring plan would grant the chosen company “24/7 access to a password protected, media influencer database, including journalist, editors, correspondents, social media influencers, bloggers etc.,” for the purpose of identifying “any and all media coverage related to the Department of Homeland Security or a particular event.” According to the document, the public activities of media members and influencers would be monitored by location and beat.

    As I explained in the earlier article, this would be for the DHS to carry out activities that would normally come under fire from an arm or agency of the government by “subbing” out the work to a subcontractor. The subcontractor would monitor with all of the sneaky secrecy as outlined in the paragraph and report their findings to the DHS. The contractor would have carte blanche protection from DHS and immunity from prosecution.

    This is the same method used by the “Five Eyes” to spy on their respective citizens: one nation “subs” out the tasks to another by “authorizing” it to do such things…and then the foreign “partner” feeds the information to that nation…effectively bypassing Constitutional protections for the citizens under the nation’s laws.

    All of the Congressional sessions and hearings are closed-door, just as the closed-door tribunals of the Soviet Union (read the Gulag Archipelago, all volumes). The President is fighting a completely uphill battle and is pitted against the pit-vipers remaining from the Obama regime. The world situation is still a mess. Has North Korea “de-nuclearized” yet? I think not.

    Check out the news that the U.S. may have a biological weapons facility in Georgia (the nation), and may be responsible for dozens of deaths. Check out the fact that we are slapping more sanctions on Iran, and China has just ceased buying our crude oil…the same oil we ourselves do not use domestically because of the Jones Act, and the lack of refineries.

    In the meanwhile, characters such as Soros and the other leftists are fomenting dissension between Americans on all fronts. Remember what Che Guevara said:

    “It is not necessary to wait until all conditions for making a revolution exist; the insurrection can create them.”

    You’re seeing it now, in the form of Antifa, and in the form of leftists and communists masquerading behind the label of “progressives.” You are seeing threats being made against members of Congress and their families. You are seeing a level of racial discord being pushed to its limits, and the laws being either flagrantly disobeyed (by Communist governors and oligarchs) or circumvented (through the puppet court system, improperly named the “Justice system.”).

    On a daily basis, the United States is “reshaping” itself, shifting the paradigm and molding the public consciousness to accept socialism…that final step prior to a full-blown totalitarian state. Surveillance on every citizen and control of every citizen is the key. Then they’ll bypass that “archaic” Constitution with its “pesky” 2nd Amendment, and come for the guns. Once they have the guns, the control, and the surveillance? The killing will begin. Just take a long look at Diane Feinstein, at Lisa Murkowski, at Schumer, Soros, Zuckerberg… just look at them and then ask yourself how you could doubt that they will all make the attempt. What attempt? The attempt to make the U.S. into an American version of the U.S.S.R. They are fighting that fight incrementally, and they are winning it.

  • Asian Markets Crushed By Capitulation Carnage

    No “National Team”… No “Plunge Protection Team”… No RRR Cuts… and not a word from Powell. The US equity market massacre is extending overnight as the liquidation crisis smashes into Asia

    The initial red box is the after-hours drop and the second drop is as Asian cash markets opened… (Nasdaq is now down over 6%)

    Nasdaq’s plunge led by a bloodbath in FANGs (NFLX -10% now)…

    From yesterday’s cash close at 26,449, Dow futures are now down almost 1300 points…

     

    AsiaPac markets are a sea of red…

    MSCI AsiaPac is plunging almost 4% to its lowest since May 2017…

    Taiwan is getting monkey-hammered…

    China is opening in freefall…

    And it’s not just equity markets.

    Currencies are tumbling…led by the Won and Taiwanese Dollar…

    Yuan is back near cycle lows…

     

    And cryptocurrencies are crashing too…

     

    There is some green in the world, however…

    US Treasuries are bid with 10Y now down 12bps from Tuesday’s highs…

    It’s going to be a long night.

  • "Nearly All" The Pentagon's Expensive New Toys Are Embarrassingly Easy To Hack, GAO Audit Finds

    The Pentagon’s next-gen weapons systems currently under development by the Department of Defense (DoD) are woefully vulnerable to cyberattacks, according to a Tuesday report by the US Government Accountability Office (GAO). 

    GAO testers “playing the role of adversary” discovered “mission critical cyber vulnerabilities in nearly all weapon systems that were under development.

    “Using relatively simple tools and techniques, testers were able to take control of systems and largely operate undetected, due in part to basic issues such as poor password management and unencrypted communications,” said GAO officials. 

    In one case, it took a two-person test team just one hour to gain initial access to a weapon system and one day to gain full control of the system they were testing.

    Some programs fared better than others. For example, one assessment found that the weapon system satisfactorily prevented unauthorized access by remote users, but not insiders and near-siders. Once they gained initial access, test teams were often able to move throughout a system, escalating their privileges until they had taken full or partial control of a system.

    In one case, the test team took control of the operators’ terminals. They could see, in real-time, what the operators were seeing on their screens and could manipulate the system. They were able to disrupt the system and observe how the operators responded.

    Another test team reported that they caused a pop-up message to appear on users’ terminals instructing them to insert two quarters to continue operating.

    Multiple test teams reported that they were able to copy, change, or delete system data including one team that downloaded 100 gigabytes, approximately 142 compact discs, of data. 

    Warnings ignored

    Despite years of repeated warnings, cybersecurity surrounding weapons systems has been surprisingly ignored. In 1991, the National Research Council reported “as computer systems become more prevalent, sophisticated, embedded in physical processes, and interconnected, society becomes more vulnerable to poor system design, accidents that disable systems, and attacks on computer systems. Without more responsible design and use, system disruptions will increase, with harmful consequences for society. “

    The warnings by the GAO began in 1996, when the auditing agency warned that the internet could provide enemies with a cheap and easy method to cause catastrophic damage to connected systems. In 2013, the Defense Science Board warned that “in today’s world of hyper-connectivity and automation, any device with electronic processing, storage, or software is a potential attack point and every system is a potential victim – including our own weapons systems.” 

    Perhaps worst of all; the GAO claims that despite documented instances of “mission-critical cyber vulnerabilities,” Pentagon officials who met with the GAO testers brushed off their concerns – insisting that their systems were secure, and “discounted some test results as unrealistic.” 

    The GAO acknowledge that the tests were performed on computerized weapons systems that are still under development – and that hackers are unable to infiltrate current weapons systems in the field. If and when the next-gen weapons are deployed, however, the threat becomes real according to the GAO. 

    “It looks grim unless they see this as a wake-up call and they start taking action in a serious manner,” said GAO employee and co-author of the report, Christina Chaplin. 

    Answering questions in a podcast, Chaplin said that one of the reasons these new computerized weapons systems are so vulnerable to hacks is because, until recently, the DOD didn’t prioritize “cyber” as part of the development process, “but it has begun to grasp the magnitude of the problem and taken a way of action.”

    One way was by instituting better testing procedures, and the second was by setting “cyber” as a focus during the acquisition process of the many components part of these new systems.

    But despite this, the GAO report warns that if the DOD doesn’t act on its own findings to patch the vulnerabilities its employees discover in their own software, then all their internal testing procedures are useless. –ZDNet

    The GAO report goes on to call out the DoD for their shoddy response to the vulnerabilities. 

    For example, one test report indicated that only 1 of 20 cyber vulnerabilities identified in a previous assessment had been corrected. The test team exploited the same vulnerabilities to gain control of the system. When asked why vulnerabilities had not been addressed, program officials said they had identified a solution, but for some reason it had not been implemented. They attributed it to contractor error.

    “There’s also a culture right now at the DOD were we feel like the extent of the problem isn’t really appreciated at the program level,” Chaplin said. “The DOD has a lot of work ahead of it to overcome some cultural issues.”

    While the GAO doesn’t specify the weapons systems involved out of national security concerns, they did say that the systems are heavily computerized and many of them networked together – making them attractive targets for enemies of the United States after they are deployed in the field. 

    Nearly every conceivable component in DOD is networked,” the report reads. “Weapon systems connect to DOD’s extensive set of networks–called the DOD Information Network–and sometimes to external networks, such as those of defense contractors. Technology systems, logistics, personnel, and other business-related systems sometimes connect to the same networks as weapon systems. Furthermore, some weapon systems may not connect directly to a network, but connect to other systems, such as electrical systems, that may connect directly to the public Internet.”

    We wonder how vulnerable China or Russia’s next-gen weapons systems are? 

  • Paul Craig Roberts: Erasing History, Diplomacy, Truth, & Life On Earth

    Authored by Paul Craig Roberts,

    One of the reasons that countries fail is that collective memory is continually destroyed as older generations pass away and are replaced by new ones who are disconnected from what came before.

    Initially, the disconnect was handled by history and by discussions around family tables. For example, when I was a kid there were still grandparents whose fathers had fought for the Confederacy. They had no slaves and owned no plantations. They fought because their land was invaded by Lincoln’s armies. Today if Southern families still know the facts, they would protect their children by not telling them. Can you imagine what would happen to a child in a public school that took this position?

    Frustrated by the inability of the Union Army to defeat the Army of Northern Virginia led by West Point graduate Robert E. Lee, Lincoln resorted to war criminals. Generals Sherman and Sherridan, operating under the drunken General Grant, were the first modern war criminals who conducted war against civilian women and children, their homes and food supply. Lincoln was so out of step with common morality that he had to arrest and detain 300 Northern newspaper editors and exile a US Congressman in order to conduct his War for Empire.

    Today this history is largely erased. The court historians buried the truth with the fable that Lincoln went to war to free the slaves. This ignorant nonsense is today the official history of the “civil war,” which most certainly was not a civil war.

    A civil war is when two sides fight for control of the government. The Confederacy was a new country consisting of those states that seceded. Most certainly, the Confederate soldiers were no more fighting for control over the government in Washington than they were fighting to protect the investment of plantation owners.

    Memory is lost when historical facts are cast down the memory hole

    So, what does this have to do with the lesson for today? More than history can be erased by the passage of time. Culture can be erased. Morality can be erased. Common sense can disappear with the diplomacy that depends on it.

    The younger generation which experiences threats shouted all around it at Confederate war memorials and street names – Atlanta has just struck historic Confederate Avenue out of existence and replaced it with United Avenue – at white males who, if they are heterosexual, have been redefined by Identity Politics as rapists, racists, and misogynists, at distinguished scientists who state, factually, that there are innate differences between the male and the female, and so on, might think that it is natural for high officials in the US government to issue a never-ending stream of war threats to Russia, China, Iran, and Venezuela.

    A person of my generation knows that such threats are unprecedented, not only for the US Government but also in world history. President Trump’s crazed NATO Ambassador, Kay Bailey Hutchison, threatened to “take out Russian missiles.” President Trump’s crazed UN Ambassador Nikki Hailey issues endless threats as fast as she can run her mouth against America’s allies as well as against the powerful countries that she designates as enemies. Trump’s crazed National Security Advisor John Bolten rivals the insane Haley with his wide-ranging threats. Trump’s Secretary of State Pompeo spews out threats with the best of them. So do the inane New York Times and Washington Post. Even a lowly Secretary of the Interior assumes the prerogative of telling Russia that the US will interdict Russian navy ships.

    What do you think would be the consequences if the Russians, the Chinese, and the Iranians took these threats seriously? World Wars have started on far less. Yet there is no protest against these deranged US government officials who are doing everything in their power to convince Russia and China that they are without any question America’s worst enemies. If you were Russia or China, how would you respond to this?

    Professor Stephen Cohen, who, like myself, remembers when the United States government had a diplomatic tradition, is as disturbed as I am that Washington’s decision to chuck diplomacy down the memory hole and replace it with war threats is going to get us all killed.

    More Cold War Extremism and Crises

    Overshadowed by the Kavanaugh confirmation hearings, US-Russian relations grow ever more perilous.

    By Stephen F. Cohen (via The Nation)

    October 3, 2018

    Stephen F. Cohen, professor emeritus of Russian studies and politics at NYU and Princeton University, and John Batchelor continue their discussions of the new US-Russian Cold War. (Previous installments, now in their fifth year, are at TheNation.com.)

    Emphasizing growing Cold War extremism in Washington and war-like crises in US-Russian relations elsewhere, Cohen comments on the following examples:

    Russiagate, even though none of its core allegations have been proven, is now a central part of the new Cold War, severely limiting President Trump’s ability to conduct crisis-negotiations with Moscow and further vilifying Russian President Putin for having ordered “an attack on America” during the 2016 presidential election. The New York Times and The Washington Post have been leading promoters of the Russiagate narrative, even though several of its foundational elements have been seriously challenged, even discredited.

    Nonetheless, both papers recently devoted thousands of words to retelling the same narrative—on September 20 and 23, respectively—along with its obvious fallacies. For example, Paul Manafort, during the crucial time he was advising then Ukrainian President Viktor Yanukovych, was not “pro-Russian” but pro–European Union. And contrary to insinuations, General Michael Flynn did nothing wrong or unprecedented in having conversations with a representative of the Kremlin on behalf of President-elect Trump. Many other presidents-elect had instructed top aides to do the same. The epic retellings of the Russiagate narrative by both papers, at extraordinary length, were riddled with similar mistakes and unproven allegations. (Nonetheless, a prominent historian, albeit one seemingly little informed both about Russiagate documents and about Kremlin leadership, characterized the widely discredited anti-Trump Steele dossier—the source of many such allegations—as “increasingly plausible.”)

    Astonishingly, neither the Times nor the Post give any credence to the emphatic statement made at least one week before by Bob Woodward—normally considered the most authoritative chronicler of Washington’s political secrets—that after two years of research he had found “no evidence of collusion” between Trump and Russia.

    For the Times and Post and other mainstream media outlets, Russiagate has become, it seems, a kind of cult journalism that no counter-evidence or analysis can dint, and thus itself is a major contributing factor to the new and more dangerous Cold War. Still worse, what began nearly two years ago as complaints about Russian “meddling” in the US presidential campaign has become for The New Yorker and other publications an accusation that the Kremlin actually put Trump in the White House. For this reckless charge, with its inherent contempt for the good sense of American voters, there is no convincing evidence—nor any precedent in American history.

    Meanwhile, current and former US officials are making unprecedented threats against Moscow. NATO ambassador Kay Bailey Hutchinson threatened to “take out” any Russian missiles she thought violated a 1987 arms treaty, a step that would risk nuclear war. The secretary of the interior threatened a “naval blockade” of Russia. In an unprecedented, undiplomatic Russophobic outburst, UN ambassador Nikki Haley declared that “lying, cheating and rogue behavior” are a “norm of Russian culture.”

    These may be outlandish statements by untutored appointed political figures, though they inescapably raise the question: Who is making Russia policy in Washington—President Trump with his avowed policy of “cooperating with Russia,” or someone else?

    But how to explain, other than as unbridled extremism, statements by a former US ambassador to Moscow and longtime professor of Russian politics, who appears to be the mainstream media’s leading authority on Russia? According to him, Russia today is “a rogue state,” its policies “criminal actions,” and the “world’s worst threat.” It must be countered by “preemptive sanctions that would go into effect automatically”—indeed, “every day,” if deemed necessary. [These are the words of Michael McFaul, who has appointments at Stanford University which has become a friendly home for warmongers.]

    Considering the “crippling” sanctions now being prepared by a bipartisan group of US senators—their actual reason and purpose apparently unknown even to them—this would be nothing less than a declaration of war against Russia; economic war, but war nonetheless.

    Several other new Cold War fronts are also fraught with hot war, but today none more than Syria.

    Another reminder occurred on September 17, when Syria accidentally shot down an allied Russian surveillance plane, killing all 15 crew members. The cause, as is known, was subterfuge by Israeli F-15s supplied by Washington that used the larger radar image of the Russian airplane to cloak their illegal attack on Syria. The reaction in Moscow was highly indicative—potentially ominous.

    At first, Putin, who had developed good relations with Israel’s political leadership, said the incident was an accident, an example of the fog of war. His own Ministry of Defense, however, loudly protested, blaming Israel. Putin quickly retreated, adopting a much more hard-line position, and in the end vowed to send to Syria Russia’s highly effective S-300 surface-to-air defense system, a prize both Syria and Iran have requested in vain for years. [Actually, Russia has now supplied both Iran and Syria the S-300.]

    Second, if the S-300s are installed in Syria (they will be operated by Russians, not Syrians), Putin can in effect impose a “no-fly zone” over that country, which has been torn by war due, in no small part, to the presence of several major foreign powers. (Russia and Iran are there legally; the United States and Israel are not.) If so, it will be a new “red line” that Washington and Tel Aviv must decide whether or not to cross. Considering the mania in Washington, it’s hard to be confident that wisdom will prevail. [Actually, it is likely that Putin will shift the responsibility of using the air defense system to Syria.]

    All of this unfolded on approximately the third anniversary of Russia’s military intervention in Syria, in September 2015. At that time, Washington pundits denounced Putin’s “adventure” and were sure it would “fail.” Three years later, “Putin’s Kremlin” has destroyed the vicious Islamic State’s grip on large parts of Syria, all but restored President Assad’s control over most of the country, and has become the ultimate arbiter of Syria’s future. President Trump would do best by joining Moscow’s peace process, though it is unlikely Washington’s mostly Democratic Russiagate party will permit him to do so. (For perspective, recall that, in 2016, presidential candidate Hillary Clinton promised to impose a US no-fly zone over Syria to defy Russia.)

    There is also this. As the US-led “liberal world order” disintegrates, not only in Syria, a new alliance is emerging between Russia, China, Iran, and possibly NATO member Turkey. It will be a real “threat” only if Washington makes it one, as it has Russia in recent years.

    Finally, the US-Russian proxy war in Ukraine has recently acquired a new dimension. In addition to the civil war in Donbass, Moscow and Kiev have begun to challenge each other’s ships in the Sea of Azov, near the vital Ukrainian port city of Mariupol. Trump is being pressured to supply Kiev with naval and other weapons to wage this evolving war, yet another potential tripwire. Here too President Trump would do best by putting his administration’s weight behind the long-stalled Minsk peace accords. Here, too, this seemed to be his original intention, but it has proven to be yet another approach, it now seems, thwarted by Russiagate.

  • Half Of American Renters Struggle With Unaffordable Housing Costs, Study Finds

    With economists expecting another frothy core-CPI print north of 2% when the BLS releases its September update on consumer prices later this week, shelters costs – and particularly rent – are expected to be a major contributor to these gains (particularly since the price impact from the Trump administration tariffs hasn’t materialized yet). As we pointed out over the weekend, home prices, according to at least one study, have reached peak unaffordability, as a lack of supply (and already exorbitant household debt) inflates prices and constrains consumers’ ability to buy.

    Renters

    As more members of the middle class have chosen to rent instead of becoming homeowners, the average national rent has soared, with housing costs rising across the US, particularly in costly urban markets clustered along the coasts. One consequence of this renting boom is that households that rent have become increasingly burdened by these higher costs. And in a report published this week, Apartment List analyzed publicly available Census data to determine how the cost burden of rents has shifted over the past decade.

    What it found is that, while the percentage of US renters who qualify as “cost burdened” – ie those who spend more than 30% of their total income on rent – has ticked lower since peaking in 2014 (it currently stands at 49.5%), a trend that was largely the result of higher-income professionals choosing to rent instead of buy, the total number of cost-burdened renters has increased by more than 3 million since 2007. 

    Renters

    Despite this meager improvement, roughly half of US renters are spending more than 30% of their income on housing costs, while nearly one in four are spending more than half their income on rent.

    Renters

    Renters’ median income increased more quickly than the median rent last year for the sixth year running. But just like with the drop in the percentage of “cost-burdened” renters, Apartment List found that this improvement was primarily driven by an influx of more affluent renters. Those toward the lower end of the income spectrum continued to struggle.

    Cost

    While poorer consumers in markets like New York City have been especially squeezed by rising rents driven by the uninterrupted upward trajectory in home prices since the crisis, the median renter qualifies for cost-burdened status in 20 of the 25 largest metro areas.

    Renters

    And nearly one in three cost burdened renters lives in California, New York, or Florida (interestingly, Florida has the highest percentage of cost-burdened renters, with Miami among the worst cities for rental affordability relative to income).

    Five

    Apartment List also charted the relationship between housing affordability and renter incomes in the largest metro areas.

    Renters

    The shortage of affordable housing in areas of economic opportunity remains one of the most pressing economic struggles facing US renters. And while signs of softness are beginning to emerge in the housing market (evidenced by a slump in home sales data) many middle-class renters, burdened as they are by an aggregate $1.5 trillion in student loans, one constituent of the record household debt burden facing Americans, are already drowning in debt, and unwilling – or unable – to take out a mortgage, particularly in an environment where interest rates are expected to rise.

  • John Whitehead Demands "Gimme Some Truth" – John Lennon Tells It Like It Is

    Authored by John Whitehead via The Rutherford Institute,

    You gotta remember, establishment, it’s just a name for evil. The monster doesn’t care whether it kills all the students or whether there’s a revolution. It’s not thinking logically, it’s out of control.” – John Lennon (1969)

    Long before Bette Midler was roundly condemned for tweeting “Women, are the n-word of the world,” John Lennon – never one to pull his punches – proclaimed in song “Woman Is the Nigger of the World.”

    Unlike Midler and the rest of the politically correct world, which refuses to say, let alone print, the word “nigger” lest they be accused of racism, Lennon didn’t just use the “n” word – he wrote a whole song about it and included it on his 1972 album Some Time In New York City.

    Titled “Woman Is the Nigger of the World,” the song – with lyrics inspired and co-written by Yoko Ono – has Lennon’s brand of truth-telling stamped all over it:

    Woman is the nigger of the world
    Yes she is, think about it
    Woman is the nigger of the world
    Think about it, do something about it

    We make her paint her face and dance
    If she won’t be a slave, we say that she don’t love us
    If she’s real, we say she’s trying to be a man
    While putting her down we pretend that she is above us
    Woman is the nigger of the world, yes she is
    If you don’t believe me take a look to the one you’re with
    Woman is the slave to the slaves
    Ah yeah, better scream about it.

    Blackballed by most radio stations, the controversial song was widely condemned as racist and anti-woman. 

    The song was neither.

    Initially released as a single in April 1972, a month after Congress voted to add the Equal Rights Amendment to the U.S. Constitution, “Woman Is the Nigger of the World” was Lennon’s way of calling out the hypocrisy of a world that claimed to recognized women as equals while treating them as less worthy of equal rights.

    That hypocrisy is still playing out today.

    As African-American civil rights activist Congressman Ron Dellums noted in his defense of the song, “If you define ‘nigger’ as someone whose lifestyle is defined by others, whose opportunities are defined by others, whose role in society is defined by others, the good news is that you don’t have to be black to be a nigger in this society. Most of the people in America are niggers.

    All these years later, not much has changed.

    Women are still treated like the niggers of the world: used, abused and conveniently discarded.

    And in the eyes of the American police state, most of the citizenry – black, white, brown and every shade in between—are still treated like slaves: brutalized, dehumanized, branded, chained, bought and sold like chattel, and stripped of their basic rights and human dignity.

    Truth is rarely comfortable. Nor is it palatable, or polite, or politically correct.

    For that matter, John Lennon, born on October 9, 1940, was rarely polite or politically correct.

    Lennon was a musical genius and pop cultural icon who also happened to be a vocal peace protester and anti-war activist and a high-profile example of the lengths to which the U.S. government will go to persecute those who dare to challenge its authority.

    Lennon never shied away from telling it like it is, and neither should we.

    Lennon dared to speak truth to power about the government’s warmongering, and as a result, he became enemy number one in the eyes of the U.S. government, his phone calls monitored and data files collected on his activities and associations.

    Until the day he died, Lennon continued to speak up and speak out.

    In honor of what would have been Lennon’s 78th birthday, here are some uncomfortable truths about life in the American police state:

    1. The government is not our friend. Nor does it work for “we the people.”

    2. We no longer have a government that is “of the people, for the people and by the people.” For that matter, our so-called government representatives do not actually represent us, the citizenry. We are now ruled by an oligarchic elite of governmental and corporate interests whose main interest is in perpetuating power and control.

    3. The U.S. is on the brink of bankruptcy, as many economists have been warning for some time now, with more than $21 trillion in debt owned by foreign nationals and corporations.

    4. Elections are not exercises in self-government. They are merely manufactured illusions conjured up in order to keep the populace compliant and convinced that their vote counts and that they still have some influence over the political process. No matter which party is in control, the police state will continue to grow. In other words, it will win and “we the people” will lose.

    5. Twenty years ago, a newspaper headline asked the question: “What’s the difference between a politician and a psychopath?” The answer, then and now, remains the same: None. There is virtually no difference between psychopaths and politicians.

    6. Far from being a benevolent entity concerned with the well-being of its citizens, whether in matters of health, safety or security, the government is concerned with three things only: power, control and money. 

    7. More than terrorism, more than domestic extremism, more than gun violence and organized crime, the U.S. government has become a greater menace to the life, liberty and property of its citizens than any of the so-called dangers from which the government claims to protect us.

    8. Not only does the U.S. government perpetrate organized, systematic violence on its own citizens, especially those who challenge its authority nonviolently, in the form of SWAT team raids, militarized police, and roaming VIPR checkpoints, but it gets away with these clear violations of the Fourth Amendment because the courts grant them immunity from wrongdoing.

    9. America’s shadow government—which is comprised of unelected government bureaucrats, corporations, contractors, paper-pushers, and button-pushers who are actually calling the shots behind the scenes right now and operates beyond the reach of the Constitution with no real accountability to the citizenry—is the real reason why “we the people” have no control over our government.

    10. You no longer have to be poor, black or guilty to be treated like a criminal in America. All that is required is that you belong to the suspect class—that is, the citizenry—of the American police state. As a de facto member of this so-called criminal class, every U.S. citizen is now guilty until proven innocent.

    11. By gradually whittling away at our freedoms—free speech, assembly, due process, privacy, etc.—the government has, in effect, liberated itself from its contractual agreement to respect our constitutional rights while resetting the calendar back to a time when we had no Bill of Rights to protect us from the long arm of the government.

    12. Private property means nothing if the government can take your home, car or money under the flimsiest of pretexts, whether it be asset forfeiture schemes, eminent domain or overdue property taxes. Likewise, private property means little at a time when SWAT teams and other government agents can invade your home, break down your doors, kill your dog, wound or kill you, damage your furnishings and terrorize your family

    13. If there is an absolute maxim by which the federal government seems to operate, it is that the American taxpayer always gets ripped off.

    14. Americans are powerless in the face of militarized police.

    15. Our freedoms—especially the Fourth Amendment—continue to be choked out by a prevailing view among government bureaucrats that they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.

    16. The U.S. is following the Nazi blueprint to a “t,” whether through its storm trooper-like police in the form of heavily armed government agents to its erection of an electronic concentration camp that not only threatens to engulf America but the rest of the world as well.

    17. The United States of America has become the new battlefield. In fact, the only real war being fought by the U.S. government today is the war on the American people, and it is being waged with deadly weapons, militarized police, surveillance technology, laws that criminalize otherwise lawful behavior, private prisons that operate on quota systems, and government officials who are no longer accountable to the rule of law. 

    18. And finally, as Lennon shared in a 1968 interview: “I think all our society is run by insane people for insane objectives… I think we’re being run by maniacs for maniacal means. If anybody can put on paper what our government and the American government and the Russian… Chinese… what they are actually trying to do, and what they think they’re doing, I’d be very pleased to know what they think they’re doing. I think they’re all insane. But I’m liable to be put away as insane for expressing that. That’s what’s insane about it.”

    These are truths about looming problems that cannot be glibly dismissed by political spin.

    These problems will continue to plague our nation unless and until Americans wake up to the fact that we’re the only ones who can change things for the better and then do something about it.

    After all, the Constitution opens with those three vital words, “We the people.”

    What this means is there is no government without us—our sheer numbers, our muscle, our economy, our physical presence in this land. There can also be no police state—no tyranny—no routine violations of our rights without our complicity and collusion—without our turning a blind eye, shrugging our shoulders, allowing ourselves to be distracted and our civic awareness diluted.

    While Lennon believed in the power of the people, he also understood the danger of a power-hungry government. “The trouble with government as it is, is that it doesn’t represent the people,” observed Lennon. “It controls them.”

    Stop being controlled.

    For the moment, the power, as Lennon recognized, is still in our hands.

    “The people have the power, all we have to do is awaken that power in the people,” concluded Lennon. “The people are unaware. They’re not educated to realize that they have power. The system is so geared that everyone believes the government will fix everything. We are the government.”

    For the moment, the choice is still ours: slavery or freedom, war or peace, death or life.

    As I make clear in my book Battlefield America: The War on the American People, the point at which we no longer have any choice is the point at which the monsters—the maniacs, the powers-that-be, the establishment, the Police State, the Deep State—win.

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Today’s News 10th October 2018

  • Africa Remains Unchartered Territory For U.S. Presidents

    This week, U.S. first lady Melania Trump has been visiting Africa.

    Even though she has visited Ghana, Malawi, Kenya and Egypt, her husband has not visited the continent since he became president.

    But, as Statista’s Niall McCarthy notes, Trump isn’t alone in neglecting Africa.

    The following infographic is based on a Quartz analysis of Office of the Historian data.

    Infographic: Africa Remains Unchartered Territory For U.S. Presidents | Statista

    You will find more infographics at Statista

    Out of the 54 countries on the continent, only 16 have been visited by a sitting American president, meaning over 70 percent of African nations have never played host to a U.S. presidential visit.

  • Britain, NATO Prepare For War On Russia In The Arctic

    Authored by Brian Cloughley via The Strategic Culture Foundation,

    On September 30 the UK’s foreign minister, Jeremy Hunt, delivered an astonishing tirade, saying “The EU was set up to protect freedom. It was the Soviet Union that stopped people leaving. The lesson from history is clear: if you turn the EU club into a prison, the desire to get out won’t diminish, it will grow — and we won’t be the only prisoner that will want to escape.”

    His comparison of the EU to gulags of former years played well with many people in Britain, but was understandably regarded as totally inappropriate by the EU, whose spokesman’s polite observation was “I would say respectfully that we would all benefit – and in particular foreign affairs ministers – from opening a history book from time to time.”

    The lunacy didn’t stop there. Not content with insulting the EU’s 27 countries, the government in London decided to whip up even more patriotic fervour by again trying to portray Russia as a threat to the United Kingdom.

    In June 2018 the UK’s Sun newspaper carried the headline “Britain will send RAF Typhoon fighter jets to Iceland in bid to tackle Russian aggression” and since then Mr Williamson hasn’t altered his contention that “the Kremlin continues to challenge us in every domain.” (Williamson is the man who declared in March 2018 that “Frankly Russia should go away — it should shut up,” which was one of the most juvenile public utterances of recent years.)

    It was reported on September 29 that Williamson was concerned about “growing Russian aggression ‘in our back yard’,” and that the Government was drawing up a “defence Arctic strategy” with 800 commandos being deployed to a new base in Norway. In an interview “Mr Williamson highlighted Russia’s re-opening of Soviet-era bases and ‘increased tempo’ of submarine activity as evidence that Britain needed to ‘demonstrate we’re there’ and ‘protect our interests’.”

    Mr Williamson has not indicated what “interests” the United Kingdom could have in the Arctic region, where it has no territory.

    The eight countries with territory north of the Arctic Circle are Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the United States. They have legitimate interests in the region which is twice the area of the US and Canada combined. But Britain has not one single claim to the Arctic. Not even a tenuous one like Iceland’s, which is based on the fact that although its mainland is not within the Arctic Circle, the Circle does pass through Grimsey Island, about 25 kilometres north of Iceland’s north coast. Britain’s Shetland Islands, its northernmost land, are 713 kilometres (443 miles) south of the Arctic Circle.

    So why does the UK declare that it has “interests” in the Arctic and that the region is “in our back yard”? How can it possibly feel threatened?

    The Arctic Institute observed in February 2018 that Russia’s “newer Arctic strategy papers focus on preventing smuggling, terrorism, and illegal immigration instead of balancing military power with NATO. These priorities suggest that Russia’s security aims in the Arctic have to do with safeguarding the Arctic as a strategic resource base… In general, the government-approved documents seem to have moved from an assertive tone that highlights Russia’s rivalry with NATO to a less abrasive tone based on securing economic development.”

    And economic development is what it’s all about. On September 28 “it was reported that “a Danish-flagged cargo ship successfully passed through the Russian Arctic in a trial voyage showing that melting sea ice could potentially open a new trade route from Europe to east Asia.” It is obviously in the best economic interests of the European Union and Russia that the route be developed for commercial transit. To do this requires avoidance of conflict in the region.

    So what’s your problem, Defence Minister Williamson?

    In August Britain’s Parliamentary Defence Committee published On Thin Ice: UK Defence in the Arctic which concluded that “There is little doubt that the Arctic and the High North are seeing an increasing level of military activity. There is much greater divergence in the evidence we have taken on what the reasons behind this are, particularly in relation to Russia. One view is that there is no offensive intent behind Russia’s military build-up and that it is simply trying to regenerate military capacity in order to reassert sovereignty. The opposite view is that this is just one more part of Russia’s aggressive reassertion of great power competition.”

    The Danish Government told the Committee that “Presently, Denmark sees no need for an increased military engagement or enhanced operative role for NATO in the Arctic”, and the Swedish Ambassador said “The Swedish Arctic is a limited part of Swedish territory. We are more a Baltic Sea nation than an Arctic nation… Obviously, the whole area around the Arctic, in particular the Kola Peninsula, is of strategic importance to Russia and they have a serious military presence there. We see all of that. Is that reason to call it militarisation of the Arctic?”

    In January Reuters reported that China had notified its Arctic strategy, “pledging to work more closely with Moscow in particular to create an Arctic maritime counterpart — a ‘Polar Silk Road’ — to its ‘one belt, one road’ overland trade route to Europe. Both the Kremlin and Beijing have repeatedly stated that their ambitions are primarily commercial and environmental, not military.” It couldn’t be plainer that Russia and China want the Arctic to be a profitable mercantile trade route, while Russia wants to continue exploration for oil, gas and mineral deposits, which are important for its economy.

    To develop the Arctic requires peace and stability. It would be impossible to reap the benefits of the new sea-route and potentially enormous energy and mineral riches if there were to be conflict in the North. It is obviously in the best interests of Russia and China that there be tranquillity rather than military confrontation.

    But Britain’s Defence Minister insists there must be a military build-up by the UK in the Arctic “If we want to be protecting our interests in what is effectively our own back yard.” He is backed by the Parliament’s Defence Committee which states that “NATO’s renewed focus on the North Atlantic is welcome and the Government should be congratulated on the leadership the UK has shown on this issue.”

    NATO is always on the lookout for excuses to indulge in military action (such as its nine–month blitz that destroyed Libya), and has announced it will conduct Arctic-focussed Exercise Trident Juncture in November, which Naval Today noted will be “one of the largest ever with 40,000 personnel, around 120 aircraft and as many as 70 ships converging in Norway.”

    The NATO military alliance is preparing for war in the Arctic, and deliberately confronting Russia by conducting manoeuvres ever-closer to its borders. It had better be very careful.

  • AI Drones And Force Fields Ward Off Shark Attacks

    Australian tech startups are using artificial intelligence, drones, and electric force fields to prevent sharks from attacking humans at beaches.

    Bloomberg says US officials are closely monitoring the technological advancements because climate change is altering shark migration patterns and threatening to push great whites closer to US shores. In the last month, a man was killed by a shark off Cape Cod, the first fatal shark attack in Massachusetts since 1936, and another incident left a 13-year-old who was diving for lobsters at a beach in California with traumatic injuries to his torso.

    Americans’ internet searches for “shark attacks” this summer has certainly been well above trend. A series of attacks have catapulted fear into many beachgoers, which is why Bloomberg was so compelled to find anti-shark technology.

    Florida Atlantic University Professor, Stephen Kajiura spoke with Bloomberg about why sharks are attacking humans. The reason: climate change of course! Kajiura said ocean waters are getting warmer thus driving sharks to higher latitudes to chase prey. “Apex predators at the top of the food chain, sharks will always follow their nourishment,” he said, which means 1,500 to 2,400 lbs. great white sharks are moving into new terrain, including America’s northeastern coast.

    “We are very aware of how close to shore great whites are now hunting,” says Cynthia Wigren, a chief executive officer of the Atlantic White Shark Conservancy. Wigren told Bloomberg she started searching for technology to thwart shark attacks after last month’s incidences on the East and West coast.

    Her research led her to Australia, where statistically Australians have a higher chance of being attacked (odds of being attacked one in 2,704,600) by a shark than in any other country in the world, where a handful of tech firms have been developing ways to prevent shark-human interaction. 

    A new smartphone app debuted last year called SharkMate, it uses artificial intelligence to analyze 13 environmental factors that affect shark behavior, including time of day, proximity to a river and recent rain. This is combined with other data, such as how many lifeguards on duty, to calculate a surfer’s odds of being attacked on a given day.

    The Ripper Group, a leading provider of strategy, training and deployment services for rescue drones in Australia, launched SharkSpotter, the world’s first autonomous shark detecting drone. The artificial intelligence algorithm uses sensors underneath the drone to detect animals based on their movement, speed, color, texture, shape and swimming patterns. When it spots a shark, the drone automatically sends an alert to all lifeguards. CEO Eddie Bennet told Bloomberg that the drones are operating along 15 beaches in New South Wales, and indicated the aircraft will patrol another 50 beaches in the coming quarters.

    While SharkMate and SharkSpotter influence human actions; Ocean Guardian’s Shark Shield casts a three-dimensional electrical field around a surfer. The device emits strong electrical pulses that cause the shark to experience safe but unbearable spasms in their sensitive electrical receptors, turning the shark away.

    Bloomberg said top leading shark researchers support these three technologies that could be the solution to prevent shark attacks at popular beach destinations.

    Dr. Gavin Naylor, director of the Florida Program for Shark Research, said the media’s obsession with shark attacks is warping reality.

    Naylor oversees the International Shark Attack File and confirmed the shark attacks across the world are below average.

    In 2017, there were 88 unprovoked attacks worldwide, and so far this year there have been 40.

    The “sensational reporting,” he said, stokes fear in the eyes of the public and crushes beach towns.

    Besides the massive housing bubble in Australia, its economy brings in nearly $120 billion from tourism. Australia has some of the best beaches and surf spots in the world. So the mention of shark attacks in the news tends to be negative for its tourism industry.

    British adventurer, writer and television presenter Bear Grylls, soaked himself with fish guts and blood for Discovery Channel’s Shark Week, dove into shark-infested North Atlantic waters (without a cage) and a Shark Shield. “I’m marinating in fish guts at their feeding time,” Grylls said.

    In the footage, massive bull sharks encircled him, he said: “This may have been a bad idea.” As the sharks got closer to Grylls, the Shark Shield was switched on and repelled the sharks — proving on national television that the technology works. 

    This is where technology meets the wild, what could possibly go wrong?

  • Retired Green Beret: What Can Be Done When They Come For The Guns?

    Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces ) via SHTFplan.com,

    One of the bad things about writing an article such as this one is that no matter what position it takes, it is attacked by an army of naysayers and protesters. This may seem innocuous, but it is not. In reality, it detracts from attempting to make a productive point of discussion. Their objective is to foster argument and conflict. Some are paid trolls and shills, and others genuinely feel the need to stand up and be heard…even if just to argue a point…whether that point has merit or not. Akin to Colin Kaepernick, protesting years after he lost in the Super Bowl to the Ravens and not during…after he was cut from the team…protesting an “injustice” that never existed.

    But they never include their E-mail addresses or identities, perhaps because their vitriolic comments may be interpreted by the authorities as threats that warrant charges. 

    In the end, they won’t be around to help you when you need it. You’ll need to think on your feet. Nothing that I’ve written for you has ever been to harm you or to not provide you with either information or “food for thought,” and I’m not about to reverse my position. We are at a juncture that most people do not recognize…on the precipice of tyranny. This piece is going to give you information that you can act on or choose not to act on. In the end, it is your decision and you’re on your own with it.

    What to do when they come for the guns. 

    In truth, there are many things you can do about it. I’ll put out some information, but I’m not telling you what to do, nor advocating doing it.

    1. Have some to “feed” them if they come: If you bought any semiautomatic rifles (erroneously and intentionally termed “assault rifles”) thorough Mr. Legal/Western Consumer Marketing procedures? There’s a record of your purchase…and that record is on file forever. They will not overlook whatever you purchased. For those “Davy Crockett” naysayers who will “defend until they’ve breathed their last?” Yes, that’s exactly what will happen: you will breathe your last. Christopher Dormer was a maniac on the run, but in the end, the cabin he holed up in burned to the ground…droned, no doubt. One thing is to “feed” them part of what you bought. Concept: “The Secret of Santa Vittoria,” with Anthony Quinn…where the town sacrificed 200,000 bottles of wine…to hide a million bottles from the German army in WWII.

    2. Disassemble, protect, stash: Take a weapon apart, and break it down into its groups…bolt, barrel, so on. Coat it with protectant/oil/grease, wrap it in plastic, and it could be stashed where it will not be found.

    3. Cache off-property: self-explanatory, but pick a national forest, a state forest, or a remote wilderness area. We have covered enough information on caches, and you will have to take the idea here and develop it.

    4. Cache on-property: here more care will be exercised, but if you follow step #1? Chances are your property will then not be searched…and I don’t mean Barney Fife walking around the grounds. I’m talking about teams with metal detectors, combing every inch of ground, and probably searching your house as well.

    5. Sewers: Yes, nobody likes going in the sewers…including the cops. After coating with protectant, wrap in 3 layers of waterproof plastic, and attach a line securely and where no one can find it or grab it.

    6. Sale or Trade: getting rid of what has been purchased under record, and either buying something to replace it or trading for it…outside of Happy Mr. Gun Store-Channels.

    7. Hidden spaces: House or Storage Unit: this would involve either some major “innovations” in “home improvement” or utilizing existing spaces and structures to accommodate your needs.

    This last one you would have to be especially careful with. The detection devices the State will use are not to be taken lightly. I’m giving you these ideas for starters. There are more, but I’m not going to give you what I would do.

    Understand what you’re dealing with. I write articles such as this one. If you think they don’t notice this, you better think again. They also notice that you read these articles. They know (and have recorded) all your e-mails, comments, and key strokes. This is the age where you must take extreme precautions, because what is coming down the pike will not be good. Food for thought with this article. Take the information and ideas, formulate your own plans, and run with the ball when you feel it’s the time.

  • Sears Preparing To File Bankruptcy As Soon As This Week

    The neverending saga of the world’s longest melting ice cube, that of Sears Holdings which has flirted with bankruptcy for years only to get bailed out in the 11th hour by its biggest investor and CEO Eddie Lampert each and every time, is finally coming to its logical end.

    With its stock crashing to a new all time low, and with a $134 million in debt due on Monday on a bond issue that is currently yielding over 1,000% in the 3 or so business days left to maturity…

    … the iconic if cash-strapped Sears Holdings, whose predecessor was the de facto originator of “online” retail with its innovative mail order catalogues, and which has been losing money for years, has hired M-III Partners to prepare a bankruptcy filing that could come as soon as this week, the WSJ reported citing people familiar with the situation, as the cash-strapped company that once dominated American retailing faces a debt payment deadline.

    The WSJ reports that employees at M-III Partners, a boutique advisory firm, have spent the past few weeks working on the potential filing, with M-III staff seen at the retailer’s headquarters in Hoffman Estates, Illinois. That said, a Chapter 11 may still be avoided as Sears “continues to discuss other options and could still avert an in-court restructuring.”

    Furthermore, Eddie Lampert, the hedge-fund manager who is Sears’s chairman, chief executive, largest shareholder and biggest creditor, may once again simply rescue the company, as he has done on many occasions in the past by making the payment. What’s different this time, is that Lampert is pushing for a broader restructuring that would include shaving more than $1 billion from Sears’s $5.5 billion debt load, selling another $1.5 billion of real estate and divesting $1.75 billion of assets, including the Kenmore appliance brand, which he has offered $400 million to buy himself. Said otherwise, Lampert hopes to shrink Sears back to profitability with the company already closing hundreds of stores in recent years.

    Unfortunately for the billionaire, a key stakeholder group is resisting efforts to continue business as usual: as a result of the company’s poor financial performance, its creditors have refused to support his out of court restructuring plan, which would leave bankruptcy as the only option.

    One can’t exactly blame the company’s lenders for being skeptical: Sears has lost more than $11 billion since 2011, and its annual sales have dropped nearly 60% in that period to $16.7 billion. Analysts say it needs to raise more than $1 billion a year to stay afloat.

    Desperate to avoid losing control of the company which he bought out of bankruptcy in 2005, Lampert – who in 2003 was kidnapped from the parking lot of his Greenwich office, but was able to persuade his captors to let him go after two days of captivity – has also sought advice, or perhaps magic, from distressed consulting firm AlixPartners, lawyers at Weil, Gotshal and Lazard, as he has tried to keep the company afloat and restructure out of bankruptcy court.

    Another hint that a bankruptcy now appears inevitable is that on Tuesday, Sears added restructuring expert Alan Carr as a director, expanding the six-person board to seven.

    Carr runs a restructuring advisory firm and previously worked as a restructuring lawyer at Skadden, Arps, Slate, Meagher & Flom LLP. He has also served on the board of companies—including wireless-networking business LightSquared Inc. and guitar maker Gibson Brands Inc.—that have recently navigated the bankruptcy process.

    As the WSJ puts it, Lampert, who was “once hailed as a genius investor for smart bets he made on AutoZone and AutoNation,” met his match in Sears, Roebuck. The retailer was struggling before he combined it with Kmart, which he rescued from bankruptcy, to create Sears Holdings Corp. in 2005.

    While Lampert rushed to cut expenses and close unprofitable stores, the business continued to deteriorate during the recession following the financial crisis, as more purchases were made online and rivals such as Walmart and Amazon grew stronger. Not helping was Lampert’s unconventional approach to retailing: he resisted investing in store upgrades and after becoming CEO in 2013, managed the company from Florida.

    According to the WSJ, Lampert wants to restructure Sears without filing for bankruptcy protection, because he views bankruptcy as risky for retailers who often enter Chapter 11 bankruptcy with the hope of restructuring but wind up in Chapter 7 liquidation instead, as was the case this year with Toys “R” Us Inc. More realistically, Lampert does not want cede equity control to the company’s creditors, which would be the most likely outcome in court.

    Lampert, whose hedge fund ESL Investments Inc. owns a majority of Sears shares, also believes the company can get more value for its assets by selling them while it is a going concern, this person added.

    And while critics have accused Lampert of stripping assets from the insolvent company, Lampert claims he has been selling assets to give Sears the cash it needs to stay in business, i.e., avoiding handing over equity control.

    As for those who have never heard of M-III Partners, it was founded by turnaround expert Mohsin Meghji, who in 2011 quit Loughlin Meghji to start his own company after working on restructurings for nearly 30 years. Sears, which still has nearly 900 stores if not for long, would be M-III’s biggest assignment. It recently served as chief restructuring officer of Real Alloy, an aluminum recycling company that sought bankruptcy protection in 2017.

    To be sure, none of the above will come as a surprise to anyone as Sears shares, which traded as high as $144 over a decade ago, closed Tuesday at 59 cents, confirming that investors were aware that a potential bankruptcy filing or restructuring is imminent. If there is one shared feeling among the various stakeholders, it is probably relief that the world’s most drawn out insolvency – on par with that of Greece – is finally coming to an end.

  • 7 Glimpses Into The Social Decay That Is Voraciously Eating Away At The Fabric Of America

    Authored by Michael Snyder via The American Dream blog,

    Everyone agrees that America is not the same place that it once was. 

    Our society is undergoing a fundamental transformation that is absolutely breathtaking, and some of the changes have been positive.  But many would argue that most of the changes have been negative, and the truth is that we can see evidence of this all around us.  Wikipedia defines social decay as “the tendency for society to decline or disintegrate over time, perhaps due to the lapse or breakdown of traditional social support systems.” 

    As a society, we are more disconnected from one another than we have ever been before, and perhaps this is one of the big reasons why so much anger and hatred are growing all around usAt this point, a large portion of the population doesn’t even seem to possess a basic level of empathy and compassion for their fellow citizens, and that has frightening implications for the future of our nation.

    Because we are so disconnected from one another, it is very easy for each of us to get intensely focused on the details of our own daily lives.

    But when we step back and take a broader view of things, the extent to which our society has deteriorated is quite stunning.

    Today, I would like to share with you 7 glimpses into the social decay that is voraciously eating away at the fabric of our country…

    #1 Long Island – Gang activity is spreading like wildfire all over America.  On Long Island, some homeowners in the Hamptons are actually installing “panic rooms” in their homes as MS-13 continues to move east on Long Island

    Wealthy Hamptons homeowners are securing their homes by installing luxury panic rooms to protect themselves from the dangerous MS-13 gang that has plagued Suffolk County.

    Billionaire Gristedes supermarket mogul, John Catsimatidis, told the New York Post ‘I sleep with a gun underneath my pillow: a Walther PPK/S, the same one James Bond carried.’

    ‘[My wife] Margo prefers a shotgun. Although, once, she thought she heard something, got the shotgun out and shot through the door,’ he added.

    #2 South Fulton County, Georgia – Law enforcement authorities recently discovered “more than 10 decapitated goats” in and around the Chattahoochee River.  Needless to say, this completely shocked the residents of South Fulton County

    Officials say they found more than 10 decapitated goatsin and around the Chattahoochee River.

    Channel 2’s Tom Jones was in South Fulton County, where the Chattahoochee Riverkeeper found the headless animals floating down the river near the Martin Luther King Jr. Drive bridge.

    #3 Baltimore, Maryland – The opioid crisis in America has never been worse than it is right now.  As a result, many babies are addicted to the drugs the moment that they are born.  In the city of Baltimore, approximately one out of every four babies is born as an opioid addict…

    Every 15 minutes, a baby is born dependent on opioids. In Baltimore, doctors at Mt. Washington Pediatric Hospital say babies born with Neonatal Abstinence Syndrome — a set of conditions caused by withdrawal from exposure to drugs — now account for 25% of the hospital’s admissions.

    #4 Birmingham, Alabama – Nowhere is social decay more evident than among our young people.  Not too long ago, a wild brawl in Birmingham involving approximately 30 teens made national headlines

    One of the gang appears to be brandishing a machete as he strikes the victim.

    West Midlands Police confirmed three people sustained stab injuries and were taken to hospital.

    Witnesses claimed there were “about 30” youngsters “aged around 16” involved in the incident.

    #5 Auburn, Washington – Do you remember what I said earlier about many Americans lacking basic empathy and compassion?  Well, an incident that just happened in Auburn, Washington is a perfect example of that.  It all started when a convenience store clerk confronted a pair of potential thieves

    The horrific incident occurred in Auburn, Washington Saturday, when two teenagers and an adult male got into an argument with a Shell station attendant who said the pair owed money for two pepperoni sticks that had arrogantly helped themselves to. After walking around the counter and confronting the group, clerk Zarif Kelada suddenly staggered forward and collided with a water bottle stand before collapsing to the ground.

    Instead of helping the clerk, the two boys decided that it was a great opportunity to rob the store.  As one of the boys was leaving, he even ripped a dollar bill out of the dying clerk’s hand

    Instead of physically helping the clerk, or at the very least calling 911, the two boys seize their opportunity and pounced on the unmanned checkout. The man chose not to participate in the robbery, but also failed to signal for help – he simply strolled out the door, leaving Zarif dying on the ground. After stealing cigarettes and over $150 from the register, one of the boys committed a final act of defiance, ripping a dollar bill out of Kelada’s hand as he lay on the ground, struggling for air.

    You can see video of this robbery right here.  If this is what the future of America looks like, we are all in really big trouble.

    #6 Portland, Oregon – Just recently, Antifa took over the streets of downtown Portland and actually started directing traffic.  Portland police monitored them the entire time, but they refused to intervene.  When one extremely frightened elderly man refused to follow Antifa’s directions, they attacked his vehicle, causing $3,000 in damage

    Video captured by Brandon Farley shows the driver inching forward, getting clear and driving away quickly. He stopped less than a block away, got out, looked at the damage to his car quickly, then got back in as protesters arrived and again began hitting his car.

    The driver, who spoke with KOIN 6 News but did not want to go on-camera, said he got out of his car earlier and asked protesters to move. But, he said, they grabbed him. He got back into the car, which is when they began beating on his car and smashed his driver’s side window.

    The person in front of the car was trying to lift up the front end as the driver was trying to get out of the area.

    The driver said there is $3000 damage to his car. He called the police to file a report after he left the area, which police confirmed.

    #7 San Francisco, California – One of the wealthiest cities in America has also become a cesspool of crime, drugs and human feces.  An Inside Edition news crew went down to one of the worst parts of San Francisco to report on the crime wave, but while they did that their own vehicle was broken into and “thousands of dollars worth of equipment” was stolen

    While the crew was interviewing the man captured on camera in the initial theft, their actual crew car was broken into via the “smash and grab” method, leaving “thousands of dollars worth of equipment” stolen.

    According to the San Francisco Chroniclemore than 31,000 people reported “smash and grab” robberiesin the city in 2017 alone.

    If 31,000 people reported “smash and grab” robberies in San Francisco last year, how many more went unreported to the police?

    What in the world is happening to us?  America was once “the shining city on a hill” that the rest of the world admired, but now the only example we are is a bad one.

    It doesn’t have to be this way, but we have got to be willing to go back to the values and the principles that made our country so great in the first place.

    If we continue down the path that we are currently on, how do we possibly expect to have any sort of a positive future as a nation?

    Change is desperately needed, but unfortunately real change does not appear to be anywhere on the horizon at this point…

  • Shunned By Democrats, Clintons Plan Post-Midterms Speaking Tour; Tickets Priced Up To $750

    Bill and Hillary Clinton, who have kindly been asked by fellow Democrats to make themselves scarce during midterms, will embark on a 13-city speaking tour beginning in Las Vegas on November 18, according to Bloomberg.

    Tickets won’t be cheap either – with prices for the first show ranging from around $72 to $750 on ticketmaster to watch the prototypical American power couple “sharing stories and inspiring anecdotes that shaped their historic careers in public service, while also discussing issues of the day and looking towards the future,” according to an announcement from Live Nation. 

    Bloomberg points out that the new speaking tour is likely to stoke criticism over the Clintons leveraging their political fame to give expensive speaking tours – including an infamous $500,000 speech to a Kremlin-linked investment bank amid the Uranium One deal (a trip during which Clinton and Putin hung out at the Russian president’s house). 

    The tour and ticket prices could reignite criticism of the former first couple for profiting from their former offices. During the 2016 campaign, Republicans blasted Hillary Clinton for giving highly paid speeches to corporate audiences after leaving public service.

    Indeed, the Clinton tour follows two years of declining popularity – between Hillary Clinton’s historic 2016 loss to Donald Trump, and Bill Clinton’s old rape allegations cropping up amid the #MeToo phenomenon. 

    Vanity Fair writes “The Trump era has not been kind to the Clintons, the prototypical American power couple who, after three decades in the public eye, have seen their political capital vastly diminished. Hillary, indelibly marked by her 2016 election loss, has played only a limited role in the midterms, given the Democratic Party’s newfound aversion to her brand of establishment politics. Bill, meanwhile, has undergone a belated reckoning with #MeToo.” 

    [T]he issue of Hillary’s “likability”—as Barack Obama so memorably put it—is now secondary to the #MeToo scandals hanging over Bill, and the awkward questions she has been forced to address. In a recent interview with CNN, she drew a painstaking line between Bill and the numerous allegations of sexual misconduct against the current president, noting, “There’s a very significant difference, and that is the intense, long-lasting, partisan investigation that was conducted in the 90s. If the Republicans, starting with President Trump on down, want a comparison, they should welcome such an investigation themselves.” That answer may be sufficient for the dwindling number of hardcore Clinton fans, but it is unlikely to win converts. –Vanity Fair

    Tickets for the Clinton tour go on sale Friday. It should be fun to compare crowd sizes between Trump rallies and Clinton appearances. 

  • Most Of America Is NOT Participating In The Hysterical Rage You See On The News

    Authored by Daisy Luther via The Organic Prepper blog,

    If you were to read about the United States of America from someplace else, you’d probably think it was a nation full of people who are gearing up to go to war. Anyone would think the same thing from what they saw in the media. You would see hysterical rage fueling terrible acts. You’d see the intense hatred between people who belong to different political parties. You’d believe this is nationwide.

    But it’s not. Sure, there’s some tension if you talk politics, but in most places, it isn’t crazy in a life-threatening kind of way. Mostly, it’s pretty friendly.

    But this isn’t the America of the media.

    When I went through the news today to search for a writing topic, it was like being hit with a wall of despair. Parts of the country are truly in bad shape. The venomous hatred is like nothing I’ve ever seen in this nation.

    There are absolutely pockets of rage – violent enclaves studded with people who are nothing more than domestic terrorists. Full-on fascists who unironically call themselves anti-fascists.

    In Portland yesterday, some people in masks (and some who brazenly went without them) took over a major intersection and “directed” traffic, shouting obscenities and racial slurs toward white drivers. An elderly man became fearful and drove through them. They chased him down and began striking his vehicle with batons and rocks. AN OLD MAN. They were within minutes of beating him, according to reports. Meanwhile, the police “monitored” the situation from a distance, allowing the mob free reign. (Read more at Zero Hedge.) Near Portland, arsonists actually set fire to a truck bearing a couple of pro-Trump stickers.

    In Kentucky, Senator Rand Paul’s wife sleeps with a gun. Fear is now a constant companion for her. She wrote an open letter to Senator Corey Booker that was published on CNN, calling him out for urging people to “get up in Congresspeoples’ faces.” Booker isn’t the only member of Congress who is inciting violence, either. Judicial Watch has filed an ethics complaint against Representative Maxine Waters for “inciting violence and assaults on the Trump Cabinet.”

    It goes on and on. writer for The Late Show tweeted “I’m just glad we ruined Brett Kavanaugh’s life.” A special education teacher in Minneapolis tweeted, “So whose [sic] gonna take one for the team and kill Kavanaugh?” An executive from Google tweeted, “You are finished, @GOP. You polished the final nail for your own coffins. F–K. YOU. ALL. TO. HELL.” And these are just this week. Wow, and we thought Trump’s tweets were a bit over the top.

    Lest it seem one-sided, there’s a whole language that angry conservatives use to insult liberals on Twitter. Twitter is a verbal war zone and there aren’t a lot of people taking the high road there.

    Over the past year, we’ve seen violence at a Unite the Right rallies, notably the one in Charlottesville, Virginia that left a woman dead when a car drove into a crowd.

    It’s impossible to find truly unbiased links for all of these and that leads me to my point.

    It isn’t like this in everyday America. The media is painting an ugly picture and putting that picture everywhere so it seems like this is our reality.

    It’s not.

    Rage is not the reality for most of us.

    Here’s the America I’ve seen.

    A couple of days ago, my neighbors were grilling and we chit-chatted over the fence. They shared some delicious southern barbecue with us, and I passed on some of the last, delicious late tomatoes to them. They had a Hillary Clinton sign in their yard when we moved in, but they still caught our dog Bella and brought her home when she escaped over the fence for a little walkabout.

    We helped the neighbors on the other side of our house when the husband had a heart attack last year. We couldn’t do much, but we went over while they were waiting for the ambulance and took care of their pets during the hospital stay. Later, the wife brought us a cake.  I have no idea for whom they voted and I don’t care. It was a delicious cake.

    My landlady has bumper stickers all over her car with which I disagree. Some of them make me cringe internally, but I don’t feel obligated to point out her errors in critical thinking. I gave her a nice plant to thank her for letting us move in and she gave us a couple of pumpkins for the front porch. She brings dog biscuits for our pets every time she swings by to do a repair or collect the rent.

    When I was in California, I was a part of the warmest network of homesteaders you can imagine. When there were wildfires, they opened up their fields and barns to others fleeing the flames with their livestock. We got together monthly to learn new skills and all “paid” the teacher with a homemade or homegrown goodie. When one homesteader broke her leg, we all took turns looking after her livestock until she recovered.

    This is the America that I see. Neighbors being kind to neighbors. Communities that care about one another. People who don’t want to participate in the hysterical rage that we’re seeing all over the media.

    I see an America that pulls together.

    In times of trouble, our communities are there for one another. We do this without government intervention and media urging.

    There’s the Cajun Navy, which formed after a bunch of guys who fish and hunt banded together and then went and rescued people who needed rescuing. There are the people in Hawaii who saw that the government wasn’t doing anything to help people displaced by a volcano, so they stepped in and built a tiny house community for their homeless neighbors.

    There was the guy in Puerto Rico who bought a utility truck with his neighbors and restored power to their neighborhood himself. After Hurricane Harvey in Texas, there were stories of community that would melt even the coldest heart. And remember how practically the whole internet stepped in to support the woman who got in trouble for rescuing abandoned dogs and cats after Hurricane Florence?

    We can and do pull together during hard times. And when those hard times happen, it doesn’t matter who somebody voted for or what they said on Twitter. That rage doesn’t matter anymore.

    A few ways to have a less outraged day

    First of all, I refuse to connect with any of my neighbors on social media. I won’t look up old friends there either. I just don’t need to know their deeply held political convictions that may or may not be ridiculous enough that I’d feel differently about them.

    I know how kindly they treat stray cats. I know they share the extra apples from their tree with the rest of us. I know how cute the kitchen is of the woman with the apple tree because I spent a pleasant afternoon in there teaching her how to can applesauce. These are the things that matter.

    I only use social media for business purposes, to help people who want to be better prepared, and to tell funny stories or share pictures of my cat, if I’m being honest. I can’t be bothered to get into arguments on there. When in history has anyone ever totally reversed their deeply held opinion on anything because someone on Facebook ALL-CAPPED the “truth” at them?

    I don’t talk about politics and religion. Remember the days when this was the norm? When it was considered discourteous, particularly at the dinner table or at family functions? It was absolutely not done at the workplace either. Maybe instead of avoiding the topics, we should have learned to have these discussions civilly, but that ship has sailed. It’s now truly impossible for most people.

    Over in my Facebook group, these topics are completely off-limits too. People get a warning when they post something political, and then if they continue to do so, they’re out of the group. That’s because we’re a community. We learn from each other and we celebrate our similarities. The hot-button issues don’t add to our conversations. Instead, they make people angry. Insults start to fly. People leave – good people. We don’t need that stuff. We need the exchange of information.

    I believe these topics that will cause nothing but strife and alienation should be pushed back into places where they’re appropriate instead of front and center of all media publications, all social events, all online forums. Is the fact that I’m neither a Republican nor a Democrat really pertinent to my ability to teach you how to prepare for a power outage? Do my stepfather’s deeply held beliefs – ones with which I strongly disagree – actually change the fact that he is a wonderful, generous soul? Of course not. I focus on his kindness, not his cringe-worthy opinions. I know that arguing with him would be pointless – he’s not going to change his mind. And I like having a pleasant relationship with him.

    These opinions we’re all so currently worked about?

    They’re mere asides, personal tastes, like preferring whiskey instead of vodka over the ice in your highball glass.

    These political arguments?

    They don’t matter in the grand scheme of things.

    If the SHTF tomorrow, you’d no longer care who the people surrounding you voted for in some rigged election. (I’m not talking about Russians. I’m talking about the fact that our entire system is corrupted.)

    You would care about whether you could trust them to have your back. You’d care about whether they were willing to trade their eggs for your tomatoes. You’d care about how you could work together to keep your families safer.

    Stop letting social media draw you into fights that are not your fights. It isn’t your responsibility to tell someone they’re wrong.

    Stop letting the media make you feel like you’re under siege. While there are definitely some pockets of political violence here in the US, these pockets do not represent the majority of us.

    Stop taking part in the rage

    Sure, you can personally dislike things done by the President or by some member of Congress on the “other side of the aisle.” But stop thinking each one is a personal attack. These are just politicians politicking.

    And they’re really be politicking in the next little while. They want to stir us all up into a frenzy as they try to motivate people to get out there and vote to put their corrupt heinies back in their comfortable seats on Capitol Hill. “It’s the most important election of our lifetime,” they’ll say.

    Yeah. Just like the last election and the election before that.

    Just like this recent clusterf*ck of a SCOTUS confirmation and the SCOTUS nomination before that.

    They  – the politicians, the media, the rich people pulling the strings, and industries like Big Tech and Big Pharm – want us at each other’s throats. It supports them. It confirms the veracity of their whims. It puts money in their pockets and power in their hands. Divided we fall and these are the people who want that to happen.

    Every single one of us is being manipulated. We’re being turned against one another. We are being ripped apart for the benefit of those who love power.

    It doesn’t have to be like this.

    We are better than this.

  • "Like A Ritz-Carlton Underground" – Paranoid Hampton Billionaires Build Luxury Panic Rooms Amid MS-13 Threat

    In the most extended bull market ever, a new trend has emerged in the Hamptons, a luxury Long Island playground for millionaires and billionaires, which involves the ultra-wealthy installing panic rooms packed with guns for the next apocalypse, according to a New York Post report Saturday.

    “I sleep with a gun underneath my pillow: a Walther PPK/S, the same one James Bond carried,” said John Catsimatidis, owner of Red Apple Group and Gristedes Foods, who has a vacation property in East Quogue. “[My wife] Margo prefers a shotgun. Although, once, she thought she heard something, got the shotgun out and shot through the door.”

    The Post said the billionaire and his family, like many others in the Hamptons, are terrified over new concerns that MS-13 has a growing presence in the area.

    In April, the vicious Salvadorian gang murdered four men behind a sports field in Central Islip. Over the summer, a Hampton Bays brothel raided by local police found MS-13 insignia. And in 2016, the Post notes, a man with MS-13 affiliation broke into an upscale Southampton home and sexually assaulted a woman.

    As authorities crack down on gang strongholds in western Suffolk County, Southampton Town Police Chief Steven Skryneck warned that ongoing police raids would push gangs, and violence into his jurisdiction [Southampton].

    Chief Skrynecki, who took command earlier this year told residents attending August’s Hampton Bays Beautification Association meeting that his officers are seeing signs of the gang in Southampton.

    One Southampton millionaire, who requested to remain anonymous for security reasons, told the Post that she recently had a security company install bulletproof glass and high-tech surveillance cameras throughout the estate.

    “MS-13 is in Suffolk County,” she said. “What’s an hour car ride? They are near.”

    The anonymous millionaire is not alone. “The home-security business is very event- and news-driven,” said Gary Blum, president of Armored Entry, a company that installs bullet-proof, super-secure windows and doors. “We get business when there is a tremendous amount of fear being generated.”

    Blum told the Post his bulletproof windows are not cheap, starting at $6,000 per window, “you can beat it with a sledgehammer without making a dent.”

    Chris Cosban, and his company Covert Interiors, has seen demand soar in the Hamptons for panic rooms ranging from $25,000 to $200,000. “The big thing [with homeowners] in the Hamptons is that if somebody has it, they all want it,” said Cosban. “There is a wow factor … They like to brag about it.”

    Herman Weisberg, managing director of the personal-security firm Sage Intelligence Group, told the Post that his Hamptons clients want their panic rooms to double as home theaters, home offices, wine cellars or even gun vaults where assault rifles and shotguns can be stored.

    “People used to open up their garages and show off their Lamborghinis,” Weisberg said. “Now they take guests to the wine bar in their safe room.”

    Catsimatidis, who also had his home broken into, worries about the MS-13 threat, has installed infrared sensors at his place. But, the paranoia of social destabilization is not just with the billionaires and millionaires on the East Coast, Al Corbi, president of SAFE (Strategically Armored & Fortified Environments), an architecture-focused security firm, just “finished a system for $100 million” with a panic room on the West Coast. “That sounds like a lot but there is nothing I know of, human or manmade, that could possibly harm this family for three generations, including global nuclear holocaust, a pandemic or a second Ice Age,” he said, adding that, “it is like a Ritz-Carlton underground.”

    Some residents in the Hamptons told the Post that some of their neighbors have entirely gone overboard fortifying their estates for the apocaplyse. “In the Hamptons, it’s hard to know if someone is an oligarch and lots of security makes sense, or if somebody is just paranoid,” said one East Hampton resident who wished to remain anonymous.

    So, could this new panic room craze in the Hamptons be a reactionary response to the MS-13 threat, or is it that the ultra-wealthy have too much excess liquidity?

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Today’s News 9th October 2018

  • The UK Is Practicing Cyberattacks To Black Out Moscow As A Nuclear Deterrent

    Britain’s military has engaged in a massive cyber-strike war game scenario which envisioned an attack on Russia’s power grid which would black out all of Moscow.

    The non-conventional military exercise comes as British defense officials have expressed increasing concern that the UK would be outgunned if under attack by Russia.

    An alarming new report in the Sunday Times begins as follows:

    Defence chiefs have war-gamed a massive cyber-strike to black out Moscow if Vladimir Putin launches a military attack on the West, after concluding that the only other way of hitting back would be to use nuclear weapons.

    Senior security sources have told The Sunday Times they are concerned that Britain has a capability gap that has left commanders with too few weapons to meet Kremlin aggression short of firing a Trident nuclear missile.

    Britain’s military is said to be exploring a host of alternative measures and “more options” that could constitute a significant blow to Russia’s defenses short of launching nuclear war. The Sunday Times continues:

    Planning exercises on the threat posed by Russia have left officials “ashen-faced” at the speed with which confrontation with Moscow could escalate.

    Whitehall officials have vowed to step up offensive cyber-capability, including the ability to “turn out the lights” in the Kremlin.

    Apparently the non-conventional and cyber-weapons strike readiness are part of growing growing tit-for-tat actions and tensions after UK and US officials have accused the Kremlin of aggressive actions ranging from cyberattacks on Western targets to election interference, to the poising of a former spy on British soil.

    But officials are concerned that they don’t have enough in the UK military arsenal for an adequate response that would halt and deter Russian aggression. One senior military source told The Sunday Times: “If they sank our aircraft carrier with a nuclear-tipped torpedo, what is our response? There’s nothing between sinking their submarine and dropping a nuclear weapon on northern Kamchatka.”

    The source explained further: “This is why cyber is so important; you can go on the offensive and turn off the lights in Moscow to tell them that they are not doing the right things.”

    The Crimea had experienced a total blackout in June of last summer due to a power grid failure, according to Reuters. 

    This comes as British troops recently participated in their biggest military exercise in a decade, which involved six navy ships and over 5,000 soldiers in the Omani desert. The UK military says it’s increasingly preparing for irregular warfare situations and engagement with Russian forces such as witnessed in recent years in eastern Ukraine and Crimea.

    NATO is also said to be beefing up its cyber-weapons and security capabilities, something United States is soon expected to announce it will make major contributions to in response to an alleged uptick in Russian operations. US intelligence officials have feared that Russia may be planning major hacking attempts ahead of the November midterms. 

    Late last week Dutch and other European authorities alleged Russian intelligence conducted four high profile cyber attacks, including an attempt to spy on the Organisation for the Prohibition of Chemical Weapons (OPCW), which is the independent body responsible for investigating chemical attacks in Syria and in the UK.

    Meanwhile Moscow for its part has dismissed what Kremlin officials have lately called “Western spy mania” while leveling its own accusations that the US, UK, and NATO are engaged in their own provocations that of necessity put Russia on the defensive.  

  • Soros Color Revolution In Syria?

    Authored by Ghassan Kadi via The Saker Blog,

    As the observers and analysts of events in the Middle East were busy looking at the aftermath of the downing of the IL-20 and the deployment of the S-300 in Syria, a great new danger is now looming.

    President Assad issued a legislative decree (Decree No 16) and which is intended to reform the ministry of Awqaf (Religious Endowments). The “Awqaf” is a Sunni Muslim tradition that has been around for centuries, and its role is to manage the funds of family trusts. After the dismembering of the Ottoman Empire, the new states separated their own “Awqaf” and established their own religious bodies to manage these affairs and funds.

    Much has been said in the Arab World about Presidential Decree No. 16, but in reality, nothing has been said about its actual contents and context. When I began reading criticisms of it, they gave the impression that the Decree is handing over the executive authority of Syria to the Sunni Clergy. Videos made and posted by Syrian activists expressed grave concern about Syria following the footsteps of Saudi Arabia in imposing Shariah law on the streets of Syria. There are countless posts reiterating that they are against the imposition of Shariah dress on Syrian women and other similar concerns and linking this to the Decree. There was also confusion about the origin of the Decree and a great deal of criticism of the Minister of Awqaf as the man allegedly being behind it all.

    This soon developed into a wave of paranoia and fury that dragged in many normally sombre and serious analysts and activists into supporting the outrage and expressing deep concern and even anger against the government.

    I observed all these developments with great concern, not knowing if they were based on any reasonable foundations because I did not really see the actual wording of the Decree in question. The confusion relating to the origin of the Decree, among other things, made it difficult to Google, however I finally managed to find it.

    To begin with, and contrary to the statements of many its critics, it is a Presidential Decree and not one originating from the Minister as these critics claimed. It is a 37 page document comprised of 7 sections and each section is divided into chapters. As I sat down to read it, I began to doubt if it was the actual document that the whole uproar was about. I therefore decided to write an Arabic extract of the main and relevant points it mentioned. The extract was quote-unquote based so that I do not use my own words. The emphasis was on matters of political power and religious power, whilst matters relating to financial management and the like were skimmed through very briefly. The link provided herein is for the Arabic post I made. https://intibahwakeup.blogspot.com/2018/10/3-october-2018.html I am not going to translate this to English and I apologize for that. Those who are interested in an English translation can use online translators and whilst these services have their limitations, they are nonetheless good enough to relay the main underlying context.

    In brief, the Decree does not separate the State from the Sunni Muslim institution, this is true. However, it puts the religious institution under the hand and authority of the Civil Government. This, in my humble view, is a bold Presidential step towards full secularism. The Decree imposes regulations on religious activities, teaching, preaching and other related matters, to ensure that extremism namely Wahhabism and the Muslim Brotherhood are kept out and that Muslims are taught that they can be good Muslims and good Syrian citizens at the same time.

    Sadly, experience has taught us that if Sunni religious institutions are left alone, they can be infiltrated by prejudiced fanatic zealots who can in the future, potentially reignite the fire. If anything, Decree no. 16 takes precautionary measures to ensure this doesn’t happen.

    I did not see in the Decree any allusion to the imposition of Shariah code dress on women, and quite frankly, I did not see anything in it that justifies the outrage.

    As I was in the beginning wondering if I was reading the actual document that had caused the outrage, I ended up wondering if the ones doing the outrage have read it at all or even bothered to try to Google it and find it.

    The War on Syria has not finished and, over the years I have written many articles about directions that the enemies of Syria took it in order to morph the war and reshape it in their favour. What Syria now needs is rationality and education. It’s a good start to have faith and confidence in the leadership and Decrees of the President, but this trust can be further bolstered by actually looking at facts and discussing the Decree for what it says and not by attributing it to the words of some extremist clerics and making judgements made on totally irrelevant criteria.

    However, the current voices of dissent in Syria are led by supporters of the Syrian Government in its war, they are led by alleged “reformers” and scholars, who are twisting facts and feeding the public with disinformation alleging that the said decree is a sell out to the Islamists. With the great help of Intibah (my wife) I have caught them out, and was able to demonstrate that they are either lying deliberately, or that they have issued statements about the decree without reading it.

    Those stirrers are trying hard, and very hard, to give the educated secular youth the impression that the government is intent to allow their sacrifices to go in vain. The campaign is spearheaded by some scholars and a member of the Popular Assembly (Parliament) by the name of Nabil Saleh. Saleh is an independent MP who has placed himself against the war on Syria, but not in support of the politics of the Government. He identifies himself as a reformer, a fighter for justice and rationality. However, the campaign of disinformation he is leading does not seem to be based on any rationality at all, but rather on deliberate twists and misinterpretations of Decree No 16. All the while the Grand Mufti Hassoun seems to be keeping silent.

    The campaign is splitting the victors of the war on a very basic issue. Even the grass-root constituencies that have supported the Assad legacy for decades are getting inflamed and angry. What is really dangerous here is that as this campaign is giving the false impression that fundamentalist Sunni Islam is winning the battle of government legislation, confused members of other religions are now asking what is in it for them and why did they make all those sacrifices?

    My fear is that if this wave of disinformation grows, it will (God forbid) produce the real civil war that Syria did not have. In my Arabic writings, I have been urging readers to develop informed views and asking for calm, but my voice does not travel as far and as loud as the voices of the stirrers.

    Now, Syrians have been “asked” to wear red at 4 pm on Tuesday (the 9th of October) in protest to the Decree.

    Sounds familiar?

    Everything about this current hysteria, beginning with disinformation, fearmongering and ending with “Red Tuesday”, are all hallmarks of a Soros-sponsored colour revolution. Did the Western infiltrators who penetrated Syria’s security defences (and whom I and others have warned about repeatedly) establish sleeper cells that have been now activated? Incidentally, the colour red is considered by fundamentalist Muslims as lustful and provocative for women to wear. The choice of the colour perhaps underlies a subtle statement to this effect.

    This is spiralling out of control, and the way I see it, President Assad has a few options:

    1. Charge the provocateurs with maliciously spreading disinformation and causing civil strife. This option will however turn Saleh and others in living martyrs and may intensify the situation further.

    2. Ignore the public anger in the hope that it will recede and go away, but such an action may anger the protestors even more and push them to escalate their action.

    3. Or simply to withdraw Decree No 16 even though it is a very good piece of legislation. Such a withdrawal will hopefully absorb the current hysteria and provides the Government with time to deal with whom and what was behind it.

    The S-300 may now be giving Syria security in the skies, but those who are stirring the mud are creating a new grave danger on the streets.

  • Salvini Resists German Plan To Return Asylum Seekers By Threatening To Close Airports

    While the Italian ruling coalition’s steadfast defiance of the European Commission’s dictats regarding their plans to swell the Italian budget deficit have been garnering most of the headlines, the government in Rome risked reviving the controversy surrounding Italy’s decision to close its borders to migrants by refusing to bow to Germany’s demands that the country accept several plane loads of migrants. In response to reports in German media that the southern state of Bavaria was preparing to send back rejected asylum seekers to Italy via chartered flights (in accordance with the so-called Dublin rules), Italian Deputy Prime Minister Matteo Salvini has threatened to close the country’s airports, just like Italy closed its ports to rescue ships sent by international aid agencies.

    Responding to reports about Germany’s plans in a tweet, Salvini warned that “if anyone, from Brussels or Berlin, thinks to send dozens of immigrants to Italy via chartered flights without authorization, know that there is not, and there won’t be, any available airports. We will close the airports like we closed the ports!”

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

     

    //www.instagram.com/embed.js

    Salvini made his threats in response to reports in DPA that Berlin had planned to begin returning rejected asylum-seekers to Italy via chartered flights, with the first flight expected to leave Tuesday, and a second scheduled for Oct. 11. The migrants, mostly Nigerians who had entered Europe via Italy, had reportedly already been informed of their impending deportation via a letter. The Dublin rules, a controversial EU regulation, assign responsibility for migrants to the country where they initially entered.

    Italy

    While Germany has managed to strike migrant-return deals with Spain and Greece, Italy has been much less willing to negotiate. Though German authorities refused to confirm the reports, Rome fears that Germany might eventually attempt to return as many as 40,000 migrants to Italy under the Dublin rules. There’s also been widespread speculation, highlighted by RT, that German Chancellor Angela Merkel and her coalition partners in the Christian Social Union (led by Horst Seehofer, the interior minister whose clashes with Merkel earlier this year nearly triggered her ouster) were seeking to deport the migrants ahead of local elections in Bavaria, which is a stronghold for the CSU. Of course, this isn’t the first time that Salvini has repudiated claims from Berlin that a migrant agreement had been reached. Back in September, Seehofer said an agreement between Rome and Berlin would be signed “soon”. However, Salvini responded that Rome would not accept “any agreement that could bring even more migrants to Italy.”

    Italy

    With this latest rejection, Italy is now feuding with France’s Emmanuel Macron, Luxembourg Foreign Minister Jean Asselborn, Germany’s ruling coalition and the unelected bureaucrats of the European Commission. Italy’s refusal to adhere to the latter’s strict budgetary guidelines has been relentlessly punished by the markets. 

    Italy

    Salvini has also tightened Italy’s asylum policy to avoid taking on more migrants. In summary, if Europe’s leaders thought they would be able to browbeat the populist coalition of the League and the Five Star Movement into submission, forcing them to surrender the ideals upon which they ran and were elected, they should try listening when Salvini insists that Italy’s “real enemy” is the unelected “EU bureaucracy.”

  • The Final Truth Of Russia-Gate

    Authored by Justin Raimondo via Anti-War.com,

    As the hoax unravels, the real story of “foreign collusion” comes out…

    The conspiracy to overthrow a sitting US President extends far beyond our own “Deep State.”

    As I’ve been saying in this space for quite some time, it’s been an international team effort from the beginning. Setting aside the British origins of the obscene “dossier” compiled by “ex”-MI6 agent Christopher Steele, we now have further confirmation of foreign involvement in President Trump’s decision to delay (perhaps indefinitely) the declassification of key Russia-gate documents. While US intelligence officials were expected to oppose the move, “Trump was also swayed by foreign allies, including Britain, in deciding to reverse course, these people said. It wasn’t immediately clear what other governments may have raised concerns to the White House.”

    But of course the Washington Post knows perfectly well which other governments would have reason to raise “concerns” to the White House. It’s clear from the public record that the following “allies” have rendered the “Resistance” essential assistance at one time or another:

    United Kingdom – This entire episode has Her Majesty’s Secret Service’s fingerprints all over it. Steele’s key role is plain enough: here was a British spook who was not only hired by the Clinton campaign to dig up dirt on Trump but was unusually passionate about his work – almost as if he’d have done it for free. And then there was the earliest approach to the Trump campaign, made by Cambridge professor and longtime spook Stefan Halper to Carter Page. And then there’s the mysterious alleged “link” to Russian intelligence, Professor Joseph Mifsud, whose murky British-based thinktank managed to operate openly despite later claims it was a Russian covert operation.

    It was Mifsud who orchestrated the Russia-gate hoax, first suggesting that the Russians had Hillary Clinton’s emails, and then disappearing into thin air as soon as the story he had planted percolated into plain view. Some “Russian agent”!

    Australia – Why would the former Australian High Commissioner to the UK seek out George Papadopoulos, a low-level semi-advisor to the Trump campaign, and milk him for information while getting him drunk?

    Israel – So how did Papadopoulos find himself spilling his guts at a bar with a top Australian intelligence figure? The Times reports that “The meeting at the bar came about because of a series of connections, beginning with an Israeli Embassy official who introduced Mr. Papadopoulos to another Australian diplomat in London.”

    Estonia – The Times and other outlets report that a “Baltic intelligence agency” was the first to relay “concerns” about Russian influence over the Trump team. I’m willing to bet it was the Estonians, who have always been the most actively anti-Russian actors in the region.

    Ukraine – Democratic National Committee members actually met with Ukrainian government leaders in an attempt to uncover dirt on Trump. Working together with the DNC, Democratic official and Ukrainian lobbyist Alexandra Chalupa received active assistance from the Ukrainian embassy, which became a veritable locus of Clintonian campaign operations.

    This is part of the price we pay for our vaunted “empire,” and the “liberal international order” the striped-pants set is so on about. As that grizzled old “isolationist” prophet, Garet Garrett, described the insignia of empire at the dawn of the cold war:

    “There is yet another sign that defines itself gradually. When it is clearly defined it may be already too late to do anything about it. That is to say, a time comes when Empire finds itself –

    “A prisoner of history.

    “The history of a Republic is its own history…. A Republic may change its course, or reverse it, and that will be its own business., But the history of Empire is a world history, and belongs to many people.”

    A Republic may restrain itself, wrote Garrett, but “Empire must put forth its power” – on whose behalf? There are many claimants whose wealth, position, and prestige depend on the Imperial largesse. When that claim is threatened, the “satellites” turn against their protector. This is what the Russia-gate covert action — carried out by coordinated action of our “allies” – is all about. We now have clear evidence of just how far our “client” states are willing go to ensure that the American gravy train of free goodies continues to flow.

    Trump’s decision to walk back his announcement that the key Russia-gate intelligence would be declassified tells us almost as much as if he’d tweeted it out, unredacted. For what it tells us is that public knowledge of the contents would constitute a major break in relations with at least one key ally.

    So here we have it at last, the final truth of Russia-gate: yes, there was indeed foreign collusion in the 2016 election, but it came from the opposite direction than the media are telling us.

    We weren’t attacked by Russia: a few thousand dollars in Facebook ads that nobody saw did not put Trump in the White House. Our democratic process was undermined, not by the supposedly omnipotent Vladimir Putin but by the intelligence agencies of some of our more beloved “allies.” We were attacked by a tag-team, both foreign and domestic, intent on ousting a democratically-elected President by any means necessary.

    Here is the final irrefutable argument against America as the “world leader,” designated champion of the “liberal international order” – we become, as Garrett noted, a prisoner of history. Indeed, we are no longer entitled to write our own history, but must endure the lobbying and aggressive interventions of our ungrateful and spiteful “allies,” whose welfare states could not exist without generous US “defense” subsidies.

    When those subsidies, subventions, and special privileges are threatened, as they are by the nationalist cheapskate Trump, who would gladly demolish the whole decrepit, dated, and dangerous cold war architecture with a wave of his hand. A US President who puts America first? They can’t allow it.

    And that’s really the essence of the fight, the issue that will determine the woof and warp of American politics in the new millennium. The global Establishment has risen up against the People. There’s no telling what the outcome will be, but one thing I know for sure: I know what side I’m on. Do you?

    *  *  *

    An Important and Essential Note to AntiWar Readers: Our fund drive is going a bit slow, we need to pick up the pace. Please help support our message and our invaluable new coverage by donating today!

  • Netflix Is Responsible For 15% Of Global Internet Traffic

    A new report by Sandvine has revealed the web applications responsible for the world’s most downstream traffic…

    Infographic: Netflix is Responsible for 15% of Global Internet Traffic | Statista

    You will find more infographics at Statista

    Underlining the popularity of streaming services, Statista’s Martin Armstrong points out that Netflix accounts for the most megabytes with 15 percent.

    Youtube isn’t too far behind with 11.4 percent.

    Further back but still with a significant share, Amazon Prime Video is responsible for 3.9 percent.

    Interestingly, the biggest streamers vary notably across geographic region…

    The question is – where does Porn fit into all this?

  • "Fu*k. You. All. To. Hell": Google Exec Threatens GOP Over Kavanaugh Confirmation

    A Google exec has come under fire after sending a now-deleted tweet to the GOP over the confirmation of Supreme Court Justice Brett Kavanaugh, who became the 114th justice of the US Supreme Court following a heated political battle. 

    You are finished, @GOP. You polished the final nail for your own coffins. FUCK. YOU. ALL. TO. HELL,” tweeted design lead David Hogue, adding “I hope the last images burned into your slimy, evil, treasonous retinas are millions of women laughing and clapping and celebrating as your souls descend into the flames.” 

    Hogue, a Google US design lead who has been with the Mountain View, CA company since December 2013, confirmed that he deleted the tweet – and that the opinions expressed in it “are mine personally.” 

    A Google spokeswoman told Fox News via email: “What employees say in their personal capacity has no bearing on the way we build or operate our products.” 

    Sounds like a similar answer to the one Google gave when Breitbart uncovered a video of Google executives who are absolutely beside themselves following Hillary Clinton’s historic loss. In the video, co-founder Sergey Brin compares Trump supporters to fascists and extremists – arguing that like other extremists, Trump voters suffered from “boredom” which has, he claims, historically led to fascism and communism.

    He then asks his company what they can do to ensure a “better quality of governance and decision-making.” 

    And according to Kent Walker, VP for Global Affairs, those who support populist causes like the MAGA movement are motivated by “fear, xenophobia, hatred and a desire for answers that may or may not be there.” 

    He later says that Google needs to fight to ensure that populist movements around the world are merely a “blip” and a “hiccup” in the arc of history that “bends towards progress.” 

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    Was David Hogue’s hateful opinion of an entire class of people – the GOP – fueled by Google’s internal culture which despises conservatives? 

  • Pope Francis: Divisive Devil Responsible For Catholic Pedophile Epidemic

    Pope Francis – who stands accused of covering up widespread sexual abuse within the Catholic Church, says that the devil is trying to divide and attack the organization. So apparently all of the child rape isn’t the priests’ fault, since the devil apparently made them do it.

    “(The Church must be) saved from the attacks of the malign one, the great accuser and at the same time be made ever more aware of its guilt, its mistakes, and abuses committed in the present and the past,” said Francis in a September 29 message. 

    Francis, who has made clear that he believes the devil to be real, suggested that Catholics worldwide pray every day in the month of October to stave off the Devil and his pedophile-encouraging ways. 

    “We should not think of the devil as a myth, a representation, a symbol, a figure of speech or an idea. This mistake would lead us to let down our guard, to grow careless and end up more vulnerable.” 

    I renew the invitation to everyone to pray the Rosary every day of the month of October ending it with the antiphon ‘Under Your protection’ and the prayer to St. Michael the Archangel, to repel the attacks of the devil who wants to divide the Church,” said Francis, who described the devil as “the great accuser.” 

    The prayer reads:

    “St. Michael the Archangel, defend us in battle. Be our defense against the wickedness and snares of the devil. May God rebuke him, we humbly pray, and do thou, O Prince of heavenly hosts, by the power of God, thrust into hell Satan, and all evil spirits, who prowl about the world seeking the ruin of souls.”

    Perhaps the power of 1.2 billion praying Catholics October will be enough to overcome the Devil’s influence over the preying priests. 

    Francis’ description of Satan as “the great accuser” has rubbed one of the pope’s adversaries the wrong way – Archbishop Carlo Maria Viganò, the Vatican’s former ambassador to Washington D.C. 

    Archbishop Carlo Maria Vigano, former Apostolic Nuncio to United States.

    In an 11-page statement published on Aug. 26, Viganò launched an unprecedented broadside by a Church insider against the pope and a long list of Vatican and U.S. Church officials.

    He accused Francis of knowing about sexual misconduct by a former U.S. cardinal with male adult seminarians but not doing anything about it.

    Viganò, concluding that his former boss had singled him out as the devil in disguise, complained in his next statement that Francis “compared me to the great accuser, Satan, who sows scandal and division in the Church, though without ever uttering my name”. –Reuters

    Archbishop Viganò then said in his written statement that Pope Francis “continued to cover” for McCarrick and not only did he “not take into account the sanctions that Pope Benedict had imposed on him” but also made McCarrick “his trusted counselor.”  Vigano said that the former archbishop of Washington advised the Pope to appoint a number of bishops in the United States, including Cardinals Blase Cupich of Chicago and Joseph Tobin of Newark.

    CBS News spoke by telephone to Viganò, who confirmed he wrote the statement and said he was speaking out now “to combat the grave situation in the church, to protect the church and also to stop future abuse.” He told CBS News producer Anna Matranga that he had no agenda and was stating facts.

    Viganò, who retired in 2016 at age 75, described an exchange with Francis on June 23, 2013, shortly after he became pope, about Cardinal Theodore McCarrick, the former archbishop of Washington, D.C., who resigned last month over claims he sexually abused seminary students and an altar boy.

    Viganò writes that he told Francis about the allegations: “Holy Father, I don’t know if you know Cardinal McCarrick, but if you ask the Congregation for Bishops there is a dossier this thick about him. He corrupted generations of seminarians and priests and Pope Benedict ordered him to withdraw to a life of prayer and penance.”

    Viganò then said that the pope did not respond to the statement, and McCarrick continued in his role as a public figure for the church.

    “Pope Francis has repeatedly asked for total transparency in the Church. He must honestly state when he first learned about the crimes committed by McCarrick, who abused his authority with seminarians and priests. In any case, the Pope learned about it from me on June 23, 2013 and continued to cover him.”

    On Sunday, a top Vatican official attacked Viganò in an open letter, accusing him of mountingh a “political frame job devoid of real foundation,” while refuting the accusations against Pope Francis point by point. 

    Francis, meanwhile, has refused to confirm or deny Viganò’s accusations. 

  • NASA Moves To Save The World From Yellowstone Supervolcano Threat

    Via SputnikNews.com,

    While the volcano cooling venture may create a lucrative power-generating opportunity, it could also potentially cause a catastrophic eruption.

    NASA scientists have reportedly designed a way to avert a disaster which may threaten mankind’s continued existence – the threat of Yellowstone supervolcano eruption.

    Brian Wilcox of the NASA’s Jet Propulsion Lab explained to BBC that the US space agency plans to “drill up to 10km down into the supervolcano, and pump down water at high pressure,” thus slowly extracting heat from it.

    He noted that while the cost of this venture is estimated at $3.46 billion, it may also present an interesting investment opportunity as the volcano, which “currently leaks around 6GW in heat,” can be essentially converted into a huge geothermal plant which would generate “electric power at extremely competitive prices of around $0.10/kWh.”

    “You would have to give the geothermal companies incentives to drill somewhat deeper and use hotter water than they usually would, but you would pay back your initial investment, and get electricity which can power the surrounding area for a period of potentially tens of thousands of years. And the long-term benefit is that you prevent a future supervolcano eruption which would devastate humanity,” he explained.

    Wilcox also remarked that the drilling project must be handled with utmost care as a slightest mistake might actually trigger the eruption the scientists are trying to prevent.

    As BBC points out, a powerful supervolcano eruption might trigger a “prolonged volcanic winter”, with the resulting crop failure putting mankind on the brink of starvation as “food reserves worldwide would last 74 days”, according to the 2012 UN estimates.

  • Watch: "Street Anarchy" As Antifa Attacks Portland Drivers That Don't Obey

    Well-known conservative columnist and author Rod Dreher reacts to shocking video which emerged on Monday showing masked Antifa members taking over an entire busy intersection and claiming the authority to direct traffic in an American city.

    Notice that these thugs include white people using racist anti-white language to order drivers to do as they say.

    Is this America? Is this routine in Portland? Why are the Portland police not arresting these people? This video captures the faces of some of them. Arrest them. Jail them.

    And yet the Portland resident and journalist, Andy Ngo, who first posted the now viral video says “This is the type of street anarchy that routinely happens where I live.”

    What’s worse is that after a dozen or more of the anarchists usurped police authority and actually threatened drivers who didn’t obey their dictates as they hesitantly pulled through the intersection, the real police have confirmed that they watched and did nothing

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    The footage further shows multiple instances of cars being hit with rods and fists for refusing to obey their commands. “I’ll beat the shit out of you!” men standing in the middle of the road shout at passing cars.

    “We don’t need your KKK in Portland, Oregon!” – another shouted at a man for merely having North Carolina plates. Drivers are prevented from going left while Antifa members shout down justifiably angered drivers who are being forced to turn right. 

    One driver pauses in the intersection and appears to call the police on his cell phone, which further enrages the mob. The radical far-left group claimed to be protesting a recent police shooting in the city. 

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    Starting at the 1:20 mark of the original video a police patrol unit can clearly be seen stationed at the end of the block, with a uniformed officer simply standing by to watch the mayhem and harassment of drivers unfold

    Indeed, one elderly man was nearly beaten by the mob as a separate video at what appears to be another intersection shows the mob chasing down the man for refusing to stop as he was presumably in fear for his life

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    The elderly citizen stops his car after making it through the initially blocked intersection, and after the group had pounded on his vehicle, after which a baton-wielding man threatens him. 

    Immediately after the senior citizen shuts his door the crowd starts wailing on his vehicle, with the baton holder smashing into the door. Clearly it appears the driver was only moments away from being savagely beaten

    Moments after the elderly man exited his car a man with a baton smashes the window out. (screengrab)

    Local media claimed the elderly man had “plowed through protesters” likely as a result of Antifa members phoning into police claiming it was they who were victims of being attacked by a car. 

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    Yet the mob can be clearly seen threatening passing cars with weapons while issuing threats. 

    On Monday night a local CBS News affiliate confirmed the elderly man filed a police report, citing over $3,000 in damages to his car. The man said the group had blocked him in and later began beating on his car:

    The driver, who spoke with KOIN 6 News but did not want to go on-camera, said he got out of his car earlier and asked protesters to move. But, he said, they grabbed him. He got back into the car, which is when they began beating on his car and smashed his driver’s side window.

    But more revealing is the Portland Police statement, also issued Monday night, which confirms police refused to intervene in order to protect what the department is describing as the free speech of the Antifa members. 

    CBS KOIN 6 News reports the statement as follows:

    PPB Sgt. Chris Burley said officers were monitoring the protest. Asked why police didn’t step in when protesters went into the streets and affected traffic, Burley said the bureau “weighs the ability for people to gather to practice their First Amendment rights to freedom of speech and assembly, as well as the impact it places on the rest of the Portland community. Throughout this event the police bureau was monitoring the crowd.”

    Is this what the police are now willing to protect and even facilitate in an American city?

    Indeed, an elderly local resident’s car was attacked and the senior citizen himself nearly beaten to death by a baton and stick-wielding masked mob as police merely “monitored” the situation. 

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Today’s News 8th October 2018

  • UK Sending 800 Troops To The Arctic To Target Russia

    As AntiWar.com’s Jason Ditz reports, UK troops will join Norway, US troops every winter…

    The British Defense Secretary announced that 800 commandos are being deployed into Norway starting next year, and continuing every winter for at least a decade. The troops will join US and Dutch troops there, and are targeting Russia.

    Speaking before travelling to Birmingham to make the speech, Mr Williamson said:

    “We see Russian submarine activity very close to the level that it was at the Cold War, and it’s right that we start responding to that.

    “If we could turn back the clock 10 years many people thought that the era of submarine activity in the High North, in the North Atlantic, and the threat that it posed did disappear with the fall of the Berlin Wall. This threat has really come back to the fore.”

    The program is built around claims of Russian aggression, and the idea that global warming will lead Russia to stake out new claims in the far north, near where old Soviet-era bases exist, for natural resources.

    Britain has no natural claims this far north, but that isn’t stopping them from throwing troops at the region with an eye on clashing with Russia, and officials say it is vital to “demonstrate we’re there” in the Arctic Circle.

    There has long been speculation of a rush to claim resources in the north, but NATO nations have been sending more and more troops to every Russian frontier area for years now, always nominally to counter “aggression” that exists purely as a talking point to justify more military spending.

  • Spain: IMF Highlights Rising Risks

    Authored by Daniel Lacalle via DLacalle.com,

    The International Monetary Fund can be criticized for many things, but its analysis of countries’ debt risk tends to be worth a read.

    In this case, the International Monetary Fund has once again warned Spain of the risk of reversing reforms and increasing imbalances.

    It asks to deepen in the labor reform to end structural unemployment and credible measures for the 2019 budget.

    The IMF is often criticized on many sides. It is often accused of being “neoliberal” despite the fact that in almost all its recommendations aim to prevent spending cuts. It is wrongly criticized, on many occasions, for being negative on countries. It is exactly the opposite. The IMF is often too diplomatic and, above all, undemanding with governments.

    A clearly diplomatic IMF has verified in its last report the important risks facing the Spanish economy. As growth slows down more quickly than expected, the risks that threaten the recovery have increased and many of the socialist government’s announcements could be counterproductive and accelerate a relapse.

    In a very diplomatic but forceful way, the IMF warns about the governments’ optimistic and inflated estimates of tax revenues. No wonder, because the average error in revenue estimates for new taxes in Spain is very important, an average of 5.8 billion euro annually.

    Inflated estimates are an easy trick to square budgets. Making impossible estimates of tax revenue while spending increases are very real. Then, when deficits soar, blame an external enemy.

    The graph below shows the historical overestimation of tax revenues (5.8 billion euro per annum more tax revenues estimated than actually collected).

    The Spanish Treasury Inspectors themselves have warned: “It would also be very interesting that those who speak again and again of these striking figures will provide the studies on which they are based to compare them. From previous unsubstantiated studies, inadequate and impossible proposals arise”(Tax Inspectors, January 2015).

    That’s the IMF’s first diplomatic warning. In Spain, since 1998, fiscal consolidation has never been achieved via revenue measures and increasing expenses.

    The IMF is aware, in addition, that Spain does not have fiscal space to increase deficitsand alerts that increasing the deficit and spending in a growth period will lead to harder and more severe cuts when the economic cycle changes.

    Budgetary buffers, which were exhausted during the crisis, must be rebuilt, and that is not done by increasing spending and taxes, because the IMF and any of us know that the estimated revenues will not be met because they are calculated in a political and fallacious way, while the expenses will likely soar above the budget.

    It is almost impossible for Spain to achieve its deficit goals increasing spending, because in order to do so, the government assumes a rise in tax revenues that has not happened even in growth periods.

    (Graph below shows growth in direct tax revenues. Tax revenues actually increased after tax cuts)

    The IMF warns that governments always resort to raising taxes to cover excessive spending (“the adjustment tool preferred by the government”), and warn that these could cause distortions and have a negative impact on growth. To avoid this, “a careful design of fiscal measures is key”.

    Empirical studies from more than 200 countries show that “a tax increase of 1% of GDP in periods of fiscal consolidation leads to a 1% drop in GDP in eight quarters” (IMF, Dabla-Norris, Lima).

    Linking pension costs to the CPI is another error that they warn about. Because it is deeply antisocial, endangering the entire system and future pensions for not including other essential factors when valuing pensions, such as sustainability and the population pyramid. It would increase pension spending between 3 and 4 points of GDP to 2050 and send Spain to a debt crisis.

    The report recalls the importance of “re-launching the structural fiscal adjustment and preserving the spirit of labor market reforms,” that is, the opposite of what the current socialist government intends to impose.

    Those who criticize the IMF for being neoliberal will be surprised because all it shows in this report is common sense: Increase imbalances and expenses in times of economic boom will lead us to take much tougher measures and further cuts when unemployment rises and we enter in recession.

    Spain does not need to spend more. Increasing spending, deficits and taxes now is not a social policy, but an antisocial one, because it means bigger and worse cuts in the future.

    Increasing taxes is counterproductive when they were already raised during the crisis and all the regions increased their tax components. In addition, it weakens Spain’s tax bases in the face of a slowdown.

    Increasing expenses is completely unnecessary when the 2018 budgets already included a 4% generalized increases in the main items. Increasing spending today is multiplying the cuts later.

    Spain is facing a moderate slowdown, which should be a unique opportunity to attract more investment and more jobs from all over the world, not announcing measures that make the Spanish economy more fragile, that weaken tax bases and raises the risk of debt and deficits with it, just as interest rates rise.

    None of the current governments’ measures have anything to do with a social policy. Putting the country at risk of another debt crisis with science fiction revenue estimates and increased political spending is not social. Itanti-socialial.

  • Where Super Rich Populations Are Growing Fastest

    A Wealth-X report from earlier this month found that the U.S. has the largest population of ultra-high-net-worth individuals (UHNWIs) worldwide. Defined as being worth $30 million or more, the U.S. has 80,000 such individuals (31 percent of the global population), higher than Japan, China, Germany, Canada and France combined.

    However, as Statista’s Niall McCarthy notes, even though the U.S. is the dominant country for the super rich, it lags behind in UHNWI population growth.

    Infographic: Where Super Rich Populations Are Growing Fastest | Statista

    You will find more infographics at Statista

    An economic boom in Asia has seen the region churn out increasing numbers of billionaires in recent years.

    For example, China saw its UHNWI population grow 19 percent between 2016 and 2017, twice the growth rate of North America. Over the past five years, another and unlikely Asian nation has been leading the world in super rich population growth.

    According to Wealth-X, Bangladesh saw its ultra-rich club expand by 17.3 percent between 2012 and 2017. During the same period, China’s UHNWI population grew 13.4 percent while Vietnam’s increased 12.7 percent. The U.S. came tenth for UHNWI population growth with 8.1 percent.

  • Pakistani Poker: Playing Saudi Arabia Against China

    Authored by James Dorsey via Mid East Soccer blog,

    Desperate for funding to fend off a financial crisis fuelled in part by mounting debt to China, Pakistan is playing a complicated game of poker that could hand Saudi Arabia a strategic victory in its bitter feud with Iran at the People’s Republic’s expense.

    The Pakistani moves threaten a key leg of the USD60 billion plus Chinese investment in the China Pakistan Economic Corridor (CPEC), a crown jewel of Chinese President Xi Jinping’s Belt and Road initiative.

    They also could jeopardize Chinese hopes to create a second overland route to Iran, a key node in China’s transportation links to Europe. Finally, they grant Saudi Arabia a prominent place in the Chinese-funded port of Gwadar that would significantly weaken Iran’s ability to compete with its Indian-backed seaport of Chabahar.

    Taken together, the moves risk dragging not only Pakistan but also China into the all but open war between Saudi Arabia and Iran.

    Pakistan’s first move became evident in early September with the government’s failure to authorise disbursements for road projects, already hit by delays in Chinese approvals, that are part of CPEC’s Western route, linking the province of Balochistan with the troubled region of Xinjiang in north-western China.

    In doing so, Pakistan implicitly targeted a key Chinese driver for CPEC: the pacification of Xinjiang’s Turkic Muslim population through a combination of economic development enhanced by trade and economic activity flowing through CPEC as well as brutal repression and mass re-education.

    The combination of Pakistani and Chinese delays “has virtually brought progress work on the Western route to a standstill,” a Western diplomat in the Pakistani capital of Islamabad said.

    Pakistani Railways Minister Sheikh Rashid, in a further bid to bring Pakistani government expenditure under control that at current rates could force the country to seek a $US 12 billion bailout from the International Monetary Fund (IMF), has cut $2 billion dollars from the US$8.2 billion budget to upgrade and expand Pakistan’s railway network, a key pillar of CPEC. Mr. Rashid plans to slash a further two billion dollars.

    “Pakistan is a poor country that cannot afford (the) huge burden of the loans…. CPEC is like the backbone for Pakistan, but our eyes and ears are open,” Mr. Rashid said.

    The budget cuts came on the back of Prime Minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party projecting CPEC prior to the July 25 election that swept him to power to as a modern-day equivalent of the British East India Company, which dominated the Indian subcontinent in the 19th century.

    PTI criticism included denouncing Chinese-funded mass transit projects in three cities in Punjab as a squandering of funds that could have better been invested in social spending. PTI activists suggested that the projects had involved corrupt practices.

    Pakistan’s final move was to invite Saudi Arabia to build a refinery in Gwadar and invest in Balochistan mining. Chinese questioning of Pakistan’s move was evident when the Pakistani government backed off suggestions that Saudi Arabia would become part of CPEC.

    Senior Saudi officials this week visited Islamabad and Gwadar to discuss the deal that would also involve deferred payments on Saudi oil supplies to Pakistan and create a strategic oil reserve close to Iran’s border.

    “The incumbent government is bringing Saudi Arabia closer to Gwadar. In other words, the hardline Sunni-Wahhabi state would be closer than ever to the Iranian border. This is likely to infuriate Tehran,” said Baloch politician and former Pakistani ports and shipping minister Mir Hasil Khan Bizenjo.

    Pakistan’s game of poker amounts to a risky gamble that serves Pakistani and Saudi purposes, puts China whose prestige and treasure are on the line in a difficult spot, could perilously spark tension along the Pakistan-Iran border, and is likely to provoke Iranian counter moves. It also risks putting Pakistan, Saudi Arabia and Iran, who depend on China economically in different ways, in an awkward position.

    The Saudi engagement promises up to US$10 billion in investments as well as balance of payments relief. It potentially could ease US concerns that a possible IMF bailout would help Pakistan service debt to China.

    A refinery and strategic oil reserve in Gwadar would serve Saudi Arabia’s goal of preventing Chabahar, the Indian-backed Iranian port, from emerging as a powerful Arabian Sea hub at a time that the United States is imposing sanctions designed to choke off Iranian oil exports.

    A Saudi think tank, the International Institute for Iranian Studies, previously known as the Arabian Gulf Centre for Iranian Studies (AGCIS) that is believed to be backed by Saudi Crown Prince Mohammed bin Salman, argued last year in a study that Chabahar posed “a direct threat to the Arab Gulf states” that called for “immediate counter measures.”

    Written by Mohammed Hassan Husseinbor, an Iranian political researcher of Baloch origin, the study warned that Chabahar would enable Iran to increase its oil market share in India at the expense of Saudi Arabia, raise foreign investment in the Islamic republic, increase government revenues, and allow Iran to project power in the Gulf and the Indian Ocean.

    Mr. Husseinbor suggested that Saudi support for a low-level Baloch insurgency in Iran could serve as a countermeasure. “Saudis could persuade Pakistan to soften its opposition to any potential Saudi support for the Iranian Baluch… The Arab-Baluch alliance is deeply rooted in the history of the Gulf region and their opposition to Persian domination,” Mr. Husseinbor said.

    Noting the vast expanses of Iran’s Sistan and Baluchestan Province, Mr. Husseinbor went on to say that “it would be a formidable challenge, if not impossible, for the Iranian government to protect such long distances and secure Chabahar in the face of widespread Baluch opposition, particularly if this opposition is supported by Iran’s regional adversaries and world powers.”

    Saudi militants reported at the time the study was published that funds from the kingdom were flowing into anti-Shiite, anti-Iranian Sunni Muslim ultra-conservative madrassas or religious seminaries in Balochistan.

    US President Donald J. Trump’s national security advisor, John Bolton, last year before assuming office, drafted at the request of Mr. Trump’s then strategic advisor, Steve Bannon, a plan that envisioned US support “for the democratic Iranian opposition,” including in Balochistan and Iran’s Sistan and Balochistan province.

    All of this does not bode well for CPEC. China may be able to accommodate Pakistan by improving commercial terms for CPEC-related projects and Pakistani debt as well as easing Pakistani access to the Chinese market. China, however, is likely to find it far more difficult to prevent the Saudi-Iranian rivalry from spinning out of control in its backyard.

  • These Are The US Cities With The Best And Worst Job Markets

    The market took Friday’s jobs print pretty hard, with interest rates resuming their surge and hitting stocks. But the hurricane-affected data had a few highlights – namely the unemployment figure, which slid to 3.7%, below consensus estimates and on par with the Fed’s year-end forecast. That level also happened to be the lowest unemployment print in 48 years.

    In short, the American economy, which is strengthening thanks to the combination of Trump’s tax cuts and his expanded deficit spending, is booming. That means for students who graduated in the spring, or are preparing to graduate next spring, should have options when it comes to finding a job. While thousands of students dream of moving to New York City, San Francisco or Washington, DC, contrary to popular belief, job markets in these hubs aren’t as robust as many believe.

    BLS

    In an analysis of regional BLS data, CNBC showed that the bulk of America’s tightest job markets aren’t found in coastal regions. Of the 20 top metro areas where unemployment rates are roughly half the national average or less, only five are situated along the coasts, according to the Bureau of Labor Statistics. Ames, Iowa boasted the lowest unemployment rate with just 1.7%. Four other metro areas on the list are in Iowa, while three are in Idaho.

    Still, eight of the metro areas on the top 20 list were in California, which has an unemployment rate of 4.2%, slightly higher than the national rate.

    Two

    The city with the highest unemployment rate is Yuma, Arizona, with 22%.

    But the low unemployment rates might not last much longer. Given the importance of manufacturing and farming to the midwestern economy, President Trump’s tariffs could kill thousands, if not hundreds of thousands, of jobs.

      Local job markets The BLS releases a regional breakdown of its labor-market data roughly two weeks after the national numbers. In a few months, economists will have a better idea of what kind of impact Trump’s tariffs will have on the Midwest.

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  • Dershowitz: ACLU's Opposition To Kavanaugh Sounds Its Death Knell

    Authored by Alan Dershowitz via The Gatestone Institute,

    • So why did the American Civil Liberties Union oppose a Republican nominee to the Supreme Court and argue for a presumption of guilt regarding sexual allegations directed against that judicial nominee? The answer is as clear as it is simple. It is all about pleasing the donors. The ACLU used to be cash poor but principle-rich. Now, ironically, after Trump taking office, the ACLU has never become so cash-rich, yet principle-poor.

    • The problem is that most of the money is not coming from civil libertarians who care about free speech, due process, the rights of the accused and defending the unpopular. It is coming from radical leftists in Hollywood, Silicon Valley and other areas not known for a deep commitment to civil liberties.

    • The old ACLU would never have been silent when Michael Cohen’s office was raided by the FBI and his clients’ files seized; it would have yelled foul when students accused of sexual misconduct were tried by kangaroo courts; and it surely would have argued against a presumption of guilt regarding sexual allegations directed against a judicial nominee.

    • When the ACLU’s national political director and former Democratic Party operative Faiz Shakir was asked why the ACLU got involved in the Kavanaugh confirmation fight, he freely admitted, “People have funded us and I think they expect a return.”

    President Trump greeting Brett Kavanaugh and his family. Why did the American Civil Liberties Union oppose a Republican nominee to the Supreme Court and argue for a presumption of guilt regarding sexual allegations directed against him? (Photo: Wikimedia Commons)

    Now that Brett Kavanaugh has been confirmed, it is appropriate to look at the damage caused by the highly partisan confirmation process. Among the casualties has been an organization I have long admired.

    After Politico reported that the American Civil Liberties Union (ACLU) was spending more than $1 million to oppose Judge Kavanaugh’s confirmation to the Supreme Court, I checked the ACLU website to see if its core mission had changed — if the ACLU had now officially abandoned its non-partisan nature and become yet another Democratic super PAC. But no, the ACLU still claims it is “non-partisan.”

    So why did the ACLU oppose a Republican nominee to the Supreme Court and argue for a presumption of guilt regarding sexual allegations directed against that judicial nominee?

    The answer is as clear as it is simple. It is all about pleasing the donors. The ACLU used to be cash poor but principle-rich. Now, ironically, after Trump taking office, the ACLU has never become so cash-rich, yet principle-poor. Before Donald Trump was elected President, the ACLU had an annual operating budget of $60 million dollars.[1] When I was on the ACLU National Board, it was a fraction of that amount. Today it is flush with cash, with net assets of over $450 million dollars. As the ACLU itself admitted in its annual report ending 2017, it received “unprecedented donations” after President Trump’s election. Unprecedented” it truly has been: the ACLU received $120 million dollars from online donations alone (up from $3-5 million during the Obama years).

    The problem is that most of the money is not coming from civil libertarians who care about free speech, due process, the rights of the accused and defending the unpopular. It is coming from radical leftists in Hollywood, Silicon Valley and other areas not known for a deep commitment to civil liberties. To its everlasting disgrace, the ACLU is abandoning its mission in order to follow the money. It now spends millions of dollars on TV ads that are indistinguishable from left wing organizations, such as MoveOn, the Democratic National Committee and other partisan groups.

    As the New Yorker reported on the ACLU’s “reinvention in the Trump era,”

    “In this midterm year…as progressive groups have mushroomed and grown more active, and as liberal billionaires such as Howard Schultz and Tom Steyer have begun to imagine themselves as political heroes and eye Presidential runs, the A.C.L.U., itself newly flush, has begun to an active role in elections. The group has plans to spend more than twenty-five million dollars on races and ballot initiatives by [Midterm] Election Day, in November. Anthony Romero, the group’s executive director, told me, ‘It used to be that, when I had a referendum I really cared about, I could spend fifty thousand dollars.'”

    This new strategy can be seen in many of the ACLU’s actions, which would have been inconceivable just a few years ago. The old ACLU would never have been silent when Michael Cohen’s office was raided by the FBI and his clients’ files seized; it would have yelled foul when students accused of sexual misconduct were tried by kangaroo courts; and it surely would have argued against a presumption of guilt regarding sexual allegations directed against a judicial nominee.

    Everything the ACLU does today seems to be a function of its fundraising. To be sure, it must occasionally defend a Nazi, a white supremacist, or even a mainstream conservative. But that is not its priority these days, either financially or emotionally. Its heart and soul are in its wallet and checkbook. It is getting rich while civil liberties are suffering.

    There appears to be a direct correlation between the ACLU’s fundraising and its priorities. When the ACLU’s national political director and former Democratic Party operative Faiz Shakir was asked why the ACLU got involved in the Kavanaugh confirmation fight, he freely admitted, “People have funded us and I think they expect a return.” Its funders applaud the result because many of these mega donors could not care less about genuine civil liberties or due process. What they care about are political results: more left-wing Democrats in Congress, fewer conservative justices on the Supreme Court and more money in the ACLU coffers.

    When I served both on the National and Massachusetts Boards of the American Civil Liberties Union, board members included conservative Republicans, old line Brahmans, religious ministers, schoolteachers, labor union leaders and a range of ordinary folks who cared deeply about core civil liberties. The discussions were never partisan. They always focused on the Bill of Rights. There were considerable disagreements about whether various amendments covered the conduct at issue. But no one ever introduced the question of whether taking a position would help the Democrats or Republicans, liberals or conservatives, Jews or Catholics or any other identifiable group. We cared about applying the constitution fairly to everyone, without regard to the political consequences.

    As the New Yorker described these more innocent times: the ACLU “… has been fastidiously nonpartisan, so prudish about any alliance with political power that its leadership, in the nineteen-eighties and nineties, declined even to give awards to like-minded legislators for fear that it might give the wrong impression.”

    Those days are now gone. Instead we have a variant on the question my immigrant grandmother asked when I told her the Brooklyn Dodgers won the World Series in 1955: “Yeah, but, vuz it good or bad for the Jews?” My Grandmother was a strong advocate of identity politics: all she cared about was the Jews. That was 63 years ago. The questions being asked today by ACLU board members is: is it good or bad for the left, is it good or bad for Democrats, is it good or bad for women, is it good or bad for people of color, is it good or bad for gays?

    These are reasonable questions to be asked by groups dedicated to the welfare of these groups but not by a group purportedly dedicated to civil liberties for all. A true civil libertarian transcends identity politics and cares about the civil liberties of one’s political enemies because he or she recognizes that this is the only way that civil liberties for everyone will be preserved.

    Today, too few people are asking: Is it good or bad for civil liberties?

  • New Report Says Trump Wants Chinese Parts Out Of American Weapons

    Top defense officials said last week that the Pentagon intends to invest in domestic manufacturing to reduce it over-reliance on Chinese and other foreign-made parts in American weapons.

    The Pentagon’s reliance on China is a major topic discussed in a new report about the overall status of the defense industrial base that President Trump is scheduled to release. Some other areas include “accelerating workforce development efforts to grow domestic science, technology, engineering, mathematics, and critical trade skills,” said Defense One.

    “This assessment recognizes the global nature of our supply chain and really addresses the need for strengthening alliances and partnerships so that we can jointly address industrial base risk,” Ellon Lord, undersecretary for acquisition and sustainment, said Thursday evening during a press briefing at the Pentagon.

    Pentagon officials are expected to ask Congress for additional funding for mitigating efforts in its fiscal 2020 budget request to Congress early next year.

    “We already have existing industrial-base mitigation tools,” said Eric Chewning, the deputy assistant defense secretary for industrial policy, said during the briefing. “There’s already money available to address some of these challenges.”

    According to Defense One, the new report says China is the only manufacturer of various chemicals needed in missiles and bombs, Europe and Japan are the only supplies of certain carbon fibers used in missiles, satellites, and rockets; Germany is the sole supplier of high-tech vacuum tubes for night vision goggles.

    China is a major focal point in the report, mentioned more than 200 times, it seems US government agencies are rushing to halt weapon parts from the country. Some of the report’s findings and recommendations on reworking supply chains are considered classified because they describe vulnerabilities in US supply chains.

    “I wouldn’t think of this just as an additional ask for money,” Chewning said. “We also need to be spending what we do more wisely. This isn’t just an investment fix. There’s legislative fixes, there’s policy fixes, there’s regulatory fixes. We need to be able to hit all of those levers.”

    It is not that the Pentagon has not been investing in domestic manufacturing, he said. “Sometimes we’re just not spending money in the right way.”

    Lord said the US defense industry supports roughly 2.4 million jobs and accounts for $865 billion “in annual industry output” and $143 billion in exports.

    She said the report’s timing “is really excellent because it provides a site picture on industrial-base issues just as receive the [2019] budget that really allows us to address many of those issues.”

    Hawk, Carlisle, president and CEO of the National Defense Industrial Association (NDIA), said the report indicates a “sobering picture” of the defense industrial base. NDIA was one of the trade groups that helped the Trump administration develop the report.

    “Reliance on single producers within the supply chain, dependence on unstable or unfriendly foreign suppliers for critical components, and misplaced presumption of continued preeminence of American military superiority are examples of findings that should be immediately addressed,” Carlisle said in a statement.

    The Aerospace Industries Association, another trade group that participated in the review, said: “Ultimately, while it is essential that the Administration focus on addressing the specific challenges facing the industrial base, none of the advancements in acquisition policy, key capabilities or workforce will matter without adequate DOD budgets.”

    There are two bottlenecks that arise from the Pentagon wanting to rework their global supply chain network: first, it is costly, and second, it could lead to global trade disruptions.

    Government officials have stated that DOD budgets would have to increase to rework supply chains to produce more domestic parts for weapons.

    The need for more defense spending comes as the Trump administration has set a record for military expenditures in 2018.

    Defense spending plus tax cuts have pushed the US budget deficit over the $1 trillion mark for next year. Already, the net supply of Treasury securities have doubled this year, to over $900 billion, and could rise to nearly $1.2 trillion in 2019.

    Treasury auctions are now having difficulty digesting the new supply, as the 10-year yield has hit a seven-year high. More military spending to rework supply chains could add further Treasury supply and continue pushing yields higher. Record military spending with out of control deficit spending via the Trump administration could strangle the real economy with borrowing costs on the rise.

    Reworking the Pentagon’s supply chains also come at a time when global openness has peaked, and the old economic order from a post World War II recovery to hyper-globalization has ended. As a result, supply chain disruptions tend to trigger a slowdown in global growth momentum.

    The Pentagon is not alone in the attempt of reworking their supply chains. Many multinationals are digesting President Trump’s trade war that is causing much uncertainty and rewriting trade routes from country to country, due to tariffs.

    The only reason the Pentagon would want to rewrite their supply chains and become less reliant on the rest of the world is that they see a war on the horizon. War tends to disrupt global trade, the US government is now preparing for conflict by securing its supply chains.

  • Elon Musk And America's Toxic Cult Of The CEO

    Authored by David Dayen via The New Republic,

    He could have been banished for securities fraud, but the government feared the consequences for Tesla’s shareholders…

    Last Wednesday, Tesla CEO and chairman Elon Musk rejected a settlement with the Securities and Exchange Commission over claims he lied on Twitter about having “secured” funding to take the automaker private at $420 a share. Under the settlement, Musk and Tesla would’ve paid fines of tens of millions of dollars, Tesla would’ve added a couple of independent board members, Musk wouldn’t have had to admit guilt, and he would’ve lost his chairmanship for two years.

    Three days later, Musk agreed to a settlement on mostly the same terms, only he’ll have to step down as chair for three years.

    In between those 72 hours, the SEC filed a thoroughly detailed lawsuit against Musk showing that funding for a takeover offer was in no way secured. Musk “had never discussed a going-private transaction at $420 per share with any potential funding source, had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a ‘special purpose fund,’ and had not confirmed support of Tesla’s investors for a potential going-private transaction,” according to the suit.

    The SEC determined that Musk made materially false statements, leading to significant run-ups in the stock price, which subsequently crashed when Musk backtracked. This is securities fraud, and the lawsuit sought a heavy penalty, prohibiting Musk from acting as a director or officer of any public company, permanently. But days later, the SEC reverted to nearly the same settlement Musk had turned down, with a slap-on-the-wrist fine, a little adult supervision from the board, and prescribed monitoring of his tweets (seriously).

    If you have a CEO this dead to rights on securities fraud, why let him continue as CEO? According to the SEC, Musk was indispensable. In a statement, SEC Chair Jay Clayton said “holding individuals accountable is important and an effective means of deterrence,” but that he must take the interests of investors into account, and “the skills and support of certain individuals may be important to the future success of a company.”

    This is mistaken and counter-productive – even dangerous. No one man or woman is or should be so vital to a company’s existence that they cannot be punished for wrongdoing. This is essentially the principle of too big to fail, brought into every corporate boardroom. If you have a reckless CEO who can’t be fired because it would hurt the company, then you don’t really have a company; you have a cult.

    You could say that removing Musk’s chairmanship and giving him a boss represents some deterrent. But the SEC’s own actions are a hint to whoever becomes Tesla’s chair that Musk cannot be held fully accountable because he is too important to the company and its shareholders. The agency has tied the hands of the chairman – which, with enough support from the board of directors, could oust him – before the position is even filled.

    How did we get to this cult of the CEO? It has grown in tandem with the shareholder value theory, the idea that companies operate solely to maximize stock returns. Shareholders are not the only ones with a stake in a company’s success: workers, communities, and the government all play a role. But if investors are the only stakeholders recognized, any disruption to a company, even if it might improve long-term performance, cannot be abided if it would drop the stock price. That means punishing a CEO for fraud is disallowed; or at least, the punishment must be balanced by an interest in keeping the stock stable, as in the SEC’s conception.

    Then you have the media’s treatment of CEOs as masters of the universe who are singularly responsible for making companies grow. Steve Jobs was treated as such, but engineers built the iPod and iPhone, designers created its look, and marketers made it attractive to consumers. Thousands of people contributed to those products, not one guy in a turtleneck. Apple hasn’t shrunk into irrelevance after Jobs’s death because a successful company relies on more than a charismatic CEO and ineffable qualities like “leadership.”

    The valorization of CEOs creates several distortions. First and perhaps most important, it fuels their obscene pay packages, which are 361 times the pay of the average worker at companies in the S&P 500. Second, it ascribes brilliance to their decision-making even when it’s lacking, and increases the potential for con artistry; the cult of the CEO is how we ended up with Theranos’ Elizabeth Holmes.

    In the case of Musk, he’s now been given license to continue his recklessness. “Naughty by Nature,” he tweeted early Monday, after reaching the deal with the SEC on Saturday. Tesla’s stock jumped 17 percent on Monday.

    Effectively immunizing risk-taking CEOs can hurt investors far more than it helps them. Under Musk, Tesla violated labor law by threatening worker stock options if they unionized. It has a mountain of debt as it burns through cash to reach production goals. To achieve this, Tesla built thousands of cars under a tent in the parking lot of its factory, with questionable quality control. Tesla’s drive to produce enough cars has led to unendurable parts and service delays; it can take weeks to get one of its cars fixed.

    All these actions, potentially fatal to Tesla over the long term, are by-products of a single-minded, irresponsible CEO who views the law and product quality as a trifling interference on the road to profitability. It’s not good for investors to have someone with this mentality in charge. But Musk has inspired such a celebrity following that he’s inextricably linked with Tesla in the public consciousness, such that dislodging him for fraud was never seriously considered, it seems.

    Extrapolate that out, and there are time-bomb CEOs scattered throughout the economy. This builds hubris into the corporate class and further severs the justice system in two, with one arrangement for the powerful and another for everyone else. It doesn’t create better products and stronger companies, just more entitled CEOs willing to set money on fire, harm workers and consumers, and laugh in the aftermath. Plus, it can make corporations fragile and introduce unnecessary risk. Losing a CEO should not create a panic, but when the CEO is a cult leader, it surely does. And that makes the stock market an incredibly hazardous place to invest money.

    Regulators should hold corporate officers to the same set of rules as everyone else. This wouldn’t harm stock investments but strengthen them, forcing companies to focus on institutional capacity and selling good products and services at a fair price. The way to end the cult of the CEO is to treat workers and managers as equal contributors in corporations’ economic success.

  • Justice Elena Kagan: Legitimacy Of The Supreme Court Is Now At Risk

    Associate Supreme Court Justice Elena Kagan said that the highest court in the land risks losing legitimacy without a centrist swing-vote, reports Bloomberg

    In Friday comments made just hours after the US Senate cleared the way for USSC nominee Brett Kavanaugh’s confirmation, Kagan said that the court benefitted from having centrist Justices Sandra Day O’Connor and Anthony Kennedy over the past 30-plus years. 

    The presence of O’Connor and Kennedy “enabled the court to look as though it was not owned by one side or another and was indeed impartial and neutral and fair,” Kagan said to an audience at Princeton University. “And it’s not so clear that, you know, I think going forward that sort of middle position — you know, it’s not so clear whether we’ll have it.”

    She added: “All of us need to be aware of that, every single one of us and to realize how precious the court’s legitimacy is.” –Bloomberg

    Of course, accusing a Supreme Court nominee of orchestrating a high school gang-rape scheme with zero evidence may also wear on the court’s legitimacy, but we digress. 

    Kavanaugh’s ascension to the USSC will give the court a five-justice conservative bloc, led by Chief Justice John Roberts who will set the pace for how quickly the court will move on various matters. 

    Without mentioning Kavanaugh by name, Kagan appeared with fellow Obama-appointed Justice Sonia Sotomayor – both Princeton graduates – where they sought to distance themselves from the political circus that has dominated Washington over Kavanaugh’s nomination. 

    “We have to rise above partisanship in our personal relationships,” Sotomayor said. “We have to treat each other with respect and dignity and with a sense of amicability that the rest of the world doesn’t often share.

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    Kagan expanded on that, saying: “This is a really divided time, and part of the court’s strength and part of the court’s legitimacy depends on people not seeing the court in the way that people see the rest of the governing structures of this country.”

    Kagan said the court needs to protect its institutional reputation by staying “somehow above the fray, even if not always and in every case. It’s an incredibly important thing for the court to guard.”

    She said the justices can’t afford to hold grudges because they would lose the ability to persuade their colleagues in future cases. –Bloomberg

     “We live in this world where it’s just the nine of us,” Kagan added. “We are the consummate repeat players.

    Yes, we’re sure Kavanaugh won’t hold a grudge after his entire life’s work was reduced to unfounded and refuted claims of sexual assault 36 years ago. 

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Today’s News 7th October 2018

  • US Rotates To Ukraine As Location To Start Conflict With Russia

    Authored by Eric Zuesse via The Strategic Culture Foundation,

    The United States Government is now treating Ukraine as if it were a NATO member, and on September 27th donated to Ukraine two warships for use against Russia. This is the latest indication that the US is switching to Ukraine as the locale to start World War III, and from which the nuclear war is to be sparked against Russia, which borders Ukraine. 

    Here is why Syria is no longer the US alliance’s preferred choice as a place to start WW III:

    On September 4th, US President Donald Trump publicly threatened Syria, Iran and Russia that if they exterminated the jihadists in Syria’s only remaining jihadist-controlled province, Idlib, then the US might launch a full-scale invasion against Syria, Iran and Russia in Syria. Either the US or Russia would then quickly escalate to nuclear war so as not to lose in Syria — that would be the conventional-war start to World War III. 

    The leaders of Russia, Iran, Turkey, and Syria (Putin, Rouhani, Erdogan, and Assad), agreed in two meetings, one on September 7th and the other on September 17th, to (as I had recommended on September 10th) transfer control of Syria’s only remaining jihadist-controlled province, Idlib, to NATO-member Turkey. This action effectively prevents the US alliance from going to war against Russia if Russia’s alliance (which includes Syria) obliterates all the jihadist groups in the Al-Qaeda-led Syrian province Idlib. For the US to war against Russia there would also be war against fellow-NATO-member Turkey — out of the question. 

    The US has been using Al Qaeda in Syria to train and lead the jihadist groups which have been trying to overthrow Syria’s Government and to replace it with a government that has been selected by the Saud family who own Saudi Arabia. Ever since 1949 the US Government has been trying to do this (to place the Saud family in charge of Syria). That plan is now being placed on-hold if not blocked altogether, because of the Russia, Turkey, Iran, Syria, agreement. As I reported on September 25th, “Turkey Now Controls Syria’s Jihadists”. The US would no longer be able to save them, but Turkey would, if Erdogan wants to. “Turkey is thus now balanced on a knife’s edge, between the US and its allies (representing the Saud family) on the one side, versus Russia and its allies (representing the anti-Saud alliance) on the other.” 

    During the same period in which the US Government was setting Syria up as the place to start WW III, it was also setting up Ukraine as an alternative possibility to do that. US President Obama, in a very bloody February 2014 coup which he had started planning by no later than 2011, overthrew Ukraine’s democratically elected President, and replaced him by a rabidly anti-Russian racist-fascist regime whose Ukrainian tradition went back to ideologically nazi Ukrainian organizations that had supported Hitler during World War II. Though communism is gone from Russia ever since 1991, the US aristocracy never ended its goal of conquering Russia; the Cold War was secretly continued on the US-NATO side. Ukraine’s nazis (meaning its racist-fascists) are now the US and UK aristocracies’ chief hope to achieve this ambition of a US-and-allied global conquest. Here are the recent steps toward WW III regarding the US alliance’s new (since 2014) prize, Ukraine:

    On September 28th, John Siciliano at the Washington Examiner bannered “Ryan Zinke: Naval blockade is an option for dealing with Russia” and he reported that Trump’s Interior Secretary Zinke had said “There is the military option, which I would rather not. And there is the economic option. … The economic option on Iran and Russia is, more or less, leveraging and replacing fuels.” He was saying that in order for the US to get its and its allies’ (mainly the Sauds’) oil and gas into Europe replacing some of Russia’s dominant market-share in that — the world’s largest energy-consuming — market (and also shrink Iran’s market-share there), a military blockade against Russia and Iran would be an option. Currently, most of Russia’s oil and gas into Europe goes via pipelines through Ukraine, which the US already controls. Siciliano’s news-break received a follow-up on September 30th from Zero Hedge.

    On October 1st, George Eliason, the great investigative journalist who happens to live in Donbass, the southeastern part of Ukraine that broke off from Ukraine when Obama’s coup overthrew the democratically elected Ukrainian President who had received over 90% of the votes in Donbass, reported at The Saker’s site, that Ukraine’s war against Donbass was now returning in full force. Headlining “War Crimes in LNR and DNR [Donbass] —The Unannounced War”, he opened: 

    On September 28th, Lugansk Peoples Republic (LNR)Deputy Foreign Minister Anna Soroka and Andrey Chernov gave a presentation unveiling a photo album entitled Unannounced war. This collection of 150 images details the war crimes by the Ukrainian government during the war from 2014-2018.

    Over the last 4 years, many journalists including myself reported on the war crimes committed by Ukrainian punisher battalions and sometimes the Ukrainian army. These war crimes are privately funded by Ukrainian Diaspora groups led primarily by US and Canadian citizens.

    The Ukrainian punisher battalions and Ukrainian volunteer battalions take pride in the fact there is no need to hide any of Ukraine’s crimes from the West’s prying eyes.

    Even now, when there is supposed to be a ceasefire so the children can go to school, Kiev is shelling cities and towns across Donbass. On September 29th, in just 24 hours Ukrainian army units shelled DNR (Donetsk Peoples Republic) over 300 times violating the ceasefire.

    The US Government is trying to bully Russia and its allies, and now is overtly threatening to go to a naval blockade against Russia. Those two warships that the US just donated to Ukraine could be helpful in such a blockade. Alternatively, Ukraine’s re-invasion of Donbass might become Trump’s opportunity to ‘aid a NATO ally’ and precipitate WW III from a conventional war in Donbass. Either way would likely produce from Russia a nuclear blitz-attack to eliminate as many of America’s retaliatory weapons as possible, so as to beat the US to the punch. In military terms, the side that suffers the less damage ‘wins’, even if it’s a nuclear war that destroys the planet. The side that would strike first in a nuclear war would almost certainly suffer the less damage, because most of the opponent’s retaliatory weaponry would be destroyed in that attack. Trump is playing nuclear ‘chicken’ against Putin. He is surely trying Putin’s patience.

    If the US regime uses any of these entry-points to a conventional war, Russia would simply be waiting for the US to nuclear blitz-attack Russia, which the US regime has long been intending to do. Regardless which side goes nuclear first, the blockade and/or re-invasion of Donbass (repeating there such things as this and this) will have started WWIII. And, clearly, any survivors would likely view the US in the way that most of today’s world views the fascist powers in WWII: as having been the aggressors. Consequently, if the American people cannot first overthrow the US regime and establish an authentic democracy here, then WWIII seems likely to result, which would be an outcome far worse, for the entire world, than an overthrow of the government that the entire world considers to be by far the most dangerous on Earth.

  • US Home Prices Hit Peak Unaffordability As Prospective Buyers Better Off Renting

    With unaffordability reaching levels not seen in decades across some of the most expensive urban markets in the US, a housing-market rout that began in the high-end of markets like New York City and San Francisco is beginning to spread. And as home sales continued to struggle in August, a phenomenon that realtors have blamed on a dearth of properties for sale, those who are choosing to sell might soon see a chasm open up between bids and asks – that is, if they haven’t already.

    While home unaffordability is most egregious in urban markets, cities don’t have a monopoly on unaffordability. According to a report by ATTOM, which keeps the most comprehensive database of home prices in the US, of the 440 US counties analyzed in the report, roughly 80% of them had an unaffordability index below 100, the highest rate in ten years. Any reading below 100 is considered unaffordable, by ATTOM’s standards. Based on their analysis, one-third of Americans (roughly 220 million people) now live in counties where buying a median-priced home is considered unaffordable. And in 69 US counties, qualifying for a mortgage would require at least $100,000 in annual income (Assuming a 3% down payment and a maximum front-end debt-to-income ratio of 28%). As one might expect, prohibitively high home prices are inspiring some Americans to relocate to areas where the cost of living is lower. US Census data revealed that two-thirds of those highest-priced markets experienced negative net migration, while more than three-quarters of markets where people earning less than $100,000 a year can qualify for a mortgage experienced net positive migration.

    ATTOM illustrated this correlation between home affordability and net migration in the chart below:

    Housing Affordability & Migration

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    Rising home prices have played a big part in driving home unaffordability, but they’re not the whole story. Stagnant wages are also an important factor. The median nationwide home price of $250,000 in Q3 2018 climbed 6% from a year earlier, which is nearly twice the 3% growth in wages during that time. Looking back over a longer period, median home prices have increased 76% since bottoming out in Q1 2012, while average weekly wages have increased 17% over the same period.

    Instead of fighting to overpay for existing inventory, one study showed that, for now at least, most Americans would be better off renting than buying a residential property. According to the latest national index produced by Florida Atlantic University and Florida International University faculty, renting and reinvesting will “outperform owning and building equity in terms of wealth creation.”

    However, with the average national rent at an all-time high, American consumers are increasingly finding that there are no good options in the modern housing market. Which could be one reason why millennials, despite having more college degrees than any preceding generation, are increasingly choosing to rent instead of buying, even after they get married and start a family.

    Rents

  • US Citizens Have Even Less Freedom Thanks To Alleged Russian Election Meddling

    Authored by Mac Slavo via SHTFplan.com,

    The United States’ trek towards complete Communism is well on its way.  Thanks to the alleged Russian election meddling, citizens living in what hasn’t been the land of the free in over a century have even fewer freedoms than they did a mere two years ago according to a report.

    According to an independent watchdog that measures political rights and democratic institutions around the world, Americans now have less freedom since electing Donald Trump and because of the alleged Russian election interference, reported Business Insider.

    The United States’ political rights rating declined … due to growing evidence of Russian interference in the 2016 elections, violations of basic ethical standards by the new administration, and a reduction in government transparency,” according to Freedom House.  Overall, the US’s freedom rating dropped from 89 to 86 because its political rights dropped from 36 to 33, according to the annual Freedom House report. The “land of the free” only the 58th freest country in the world, making it a joke to even pretend we are free.

    The report stated that the current administration’s defiance of ethical standards and Robert Mueller’s Russian election meddling investigation heating up are the specific reasons American citizens have become less free.

    In terms of defying ethical standards, Freedom House specifically mentioned Trump refusing to release his tax returns, “promoting his private business empire” in office, and “naming his daughter and son-in-law as presidential advisers.”

    As for making major policy decisions with little consultation or transparency, Freedom House mentioned Trump’s January 2017 executive order banning seven Muslim-majority countries from traveling to the US, and his July 2017 executive order banning transgender people from the military. –Business Insider

    Read Freedom House’s 2018 Freedom in the World report here, and its explainer of the US’s freedom here.

    This is not to say that we do or do not agree with how Freedom House determines the level of freedom, because taxation (government theft and the most obvious violation of basic human civil rights) rates were obviously not a factor in their rankings. Nor were the number of government services the public is forced to fund at gunpoint whether they use them or not taken into account.  It appears they judge only on a few very social layers. But read the reports and see for yourself.

  • Former Fed Governor Warns Of "Several Decade Cold War" With China

    Former Fed governor Kevin Warsh warned on Thursday that the US-China relationship is “probably as poor as” it has ever been since former President Richard Nixon and Henry Kissinger developed strategic relations between both countries in the early 1970s.

    “We’re at the risk of a real cold war” between the world’s two largest economies, said Warsh who had been on President Trump’s list for Fed chairman before Jerome Powell was chosen. “The last 30 years we’ve been living and breathing globalization as if it’s an inevitable force,” but now, it seems the six-decade-long bubble has finally popped.

    Bank of Americas says trade wars and deteriorating relations with China have been some of the reasons for the decline in globalism. Especially, US tariff duties collected, % of total imports have surged under the Trump administration.

    “Protectionism has cross-party support in the US, and nationalist parties continue to gain in Europe. Further action on China ($200bn), autos ($350bn), NAFTA ($690bn) could raise US tariff revenue as % total imports to levels not seen since 1946,” said BofA.

     

    During the CNBC interview, Wash used the term “cold war” to describe the economic standoff, not the decades-long “mutually assured destruction” nuclear stalemate with Russia.

    “We are probably on the precipice of a brand new relationship with the Chinese,” Wash told CNBC.

    He asked: “Could we be at the beginning of a 10- or 20-year cold war?” If so, an economic cold war between the countries could have major implications for the global economy like causing a global growth scare and repricing risk assets.

    What is next? 

    The return of a bipolar world: “Five or 10 years from now we might see two poles: a Chinese-centric world and an American-centric world. And the [other global] economies and countries will have to plug into one or both,” he said.

    “Great power relationships are not about how many soybeans you’re going to buy [or how] many Boeing airplanes you’re going to buy. It’s about your core interests,” he added.

    “I suspect that there will need to be between [Chinese President Xi Jinping] and President Trump a great summit, among great powers. And that requires two countries that want to have that discussion,” said Warsh, who was a Fed governor during and in the aftermath of the 2008 financial crisis.

    While Wash made no reference about a military “cold war” between the countries in the CNBC interview, it is likely that a continued breakdown in US-China relations will likely transform into a new arms race starting in the early 2020s.

    “Trade war should be recognized for what it is…1st stage of a new arms race between the US & China to reach national superiority in technology over long-term via Quantum Computing, Artificial Intelligence, Electronic Vehicles, Robotics, and Cyber-Security. 

    China strategy to ensure that 40% of China’s mobile phone chips, 70% of industrial robots, 80% of renewable energy equipment are “Made in China” by 2025. China First strategy will be met head-on by an America First strategy. Note military spending by the US and China is forecast by the IMF to rise substantially in coming decades, to $4tn in China & $3tn in the US,” said Bank of America.

    With the threat of a full-blown trade war in 2019, and relations between both economic superpowers to worsen. It is only a matter of time before a hot war develops.

  • The Damage Done By The Kavanaugh Hearings

    Authored by Alice Salles via The Mises Institute,

    As Gallup reports that more Americans expressed support for Supreme Court nominee Brett Kavanaugh during the week he denied being guilty of sexual assault, it’s clear that whether accuser Dr. Christine Blasey Ford is speaking the truth, the public might not be ready to accept the allegations without evidence. But if you were to rely solely on most news outlets , you would think Kavanaugh had been charged and convicted.

    While the outspread concern over a Supreme Court nominee is warranted , mainly due to the power justices have over our lives, the conversation was never about how Kavanaugh saw the PATRIOT Act as “measured, careful, responsible, and constitutional,” despite the law’s mockery of the Fourth and Fifth Amendments. Democrats also never bothered to mention Kavanaugh once ruled that “the Government’s metadata collection program is entirely consistent with the Fourth Amendment” while sitting in the U.S. Court of Appeals for the D.C. Circuit. Before the allegations of sexual assault, all they seemed to worry about was how Kavanaugh would rule on an abortion case, apparently frightened that states would have to pick up where they left off before Roe v. Wade. But ever since Ford entered the picture, offering a compelling story of assault but also one with gaps and no evidence , the focus is back on one thing and one thing only: We must believe all women, no matter what.

    The #MeToo movement has long been co-opted by politicians and Americans who identify as Democrats in the President Donald Trump era. Perhaps because accusations of sexual assault boost ratings . If news outlets can link anything back to Trump, then they’re sitting on a goldmine.

    But there’s also another unintended consequence to the movement, one that seemed clear from the get-go as the #MeToo hashtag went viral in Oct. 2017.

    Then, America’s left-leaning influencers politicians , and celebrities made it clear that believing all women was always the right thing to do, automatically abandoning due process and trashing any presumption of innocence in the name of fairness.

    In this very public court of opinion, accusers were seen as infallible while the accused, when formerly charged, had already been convicted long before appearing before a court. But as libertarian writer and feminist Wendy McElroy wrote recently, the damage of #MeToo-style public “prosecution” lies in how it’s made us all ignore nature.

    “‘Believe the accuser’ runs up against human nature,” McElroy wrote. “People are not only fallible, but they [are] also capable of bad behavior, such as lying.”

    Imagine that! As if women could ever lie .

    But perhaps, what’s even more damaging to the left’s own cause, if you consider they are genuinely concerned about women’s welfare, is how the “believe all women” theme in the Kavanaugh hearings could damage an entire generation of young women.

    Coming of age in a world that teaches you ought to expect being protected and treated with respect no matter where you go might sound like the ideal scenario, but it doesn’t reflect real life.

    While we live in a much safer world than our grandparents did, the reality is that the world remains a big place, filled with people of different backgrounds and sometimes, ulterior motives. Ignoring this reality is to ignore truth itself.

    For poor and low-income women in urban areas, for instance, dealing with harassment and abuse is all too common . Knowing how to deal with these situations ends up being part of who they are .

    But for middle- and upper middle-class girls, harassment is also a possibility. Understanding that there are risks and knowing how to avoid them will better prepare these girls so they may grow into stronger, more capable, and yes, more self-resilient women .

    Needless to say, it’s heartbreaking that in the United States young women (and men) are in constant danger of being victims of sexual assault. Nevertheless, it is our duty — and right — to defend ourselves when necessary, and to act accordingly if the risk outweighs the benefits.

    As professor and famed feminist author Camille Paglia once explained, feminism to her generation meant having the freedom “to risk rape.” Those women were not saying they wanted to be shielded and treated like precious porcelain dolls, quite the contrary — they were stating they were ready to fight back.

    Not too long ago, after punk rocker Mia Zapata was violently raped and murdered in a dark Seattle alley, Grunge musicians of the time such as Nirvana, Pearl Jam, Soundgarden, and Heart came together to raise funds for a campaign called “ Home Alive ,” which organized self-defense classes for local women. Singer Joan Jett joined the movement, writing the song “ Go Home” and releasing a video depicting a woman successfully fighting her attacker.

    But the spirit doesn’t live on with the younger generation, at least it doesn’t seem like it does as many today will often say that no, women should not have to defend themselves from attackers. This is particularly true among those who defend restrictions on firearm ownership, claiming that guns don’t deter sexual assault while real life cases prove otherwise .

    Regardless, the reality is that as Kavanaugh is accused of having attacked Ford, the accuser is seldom pressed to provide more evidence while the Supreme Court nominee feels compelled to continuously prove his innocence. But while Ford’s account might as well be true, the reality is that we’re turning this charade into the main story, and we’re judging Kavanaugh on the basis of an unproven claim, not real policies he’s supported and that continue to impact all men and women in America.

    To young girls witnessing the spectacle on TV, girls whose parents may say they have no doubt they know what happened in that room in 1982 and who are, perhaps, pro-gun control activists and even Hillary Clinton supporters — as strange as it may seem — the message couldn’t be clearer: The world owes you your safety.

    As Paglia wrote in 1991 about then-Supreme Court nominee Clarence Thomas and his accuser, Anita Hill, Hill made uncorroborated allegations that served Democrats with a very clear agenda: abortion rights.

    While Ford’s and Hill’s stories are different in nature, it is as true today as it was then that Democrats are using allegations to push an agenda, choosing to talk about uncorroborated claims instead of the Supreme Court’s power over our lives. And that’s not a bug in the system, as both Democrats and Republicans will take any opportunity to have more control over the narrative. Still, this showdown has real-world consequences, as young people are largely influenced by what they see on social media. And you can’t go through one day online without seeing celebrities politicians , and news personalities discussing the Kavanaugh allegations as facts.

  • "F**king Historical" – Watch Banksy Painting Self-Destruct At Sotheby's Auction 

    A Banksy painting “self-destructed” Friday evening on the auction podium at Sotheby’s New Bond Street location in London after being sold for 1.04 million pounds.

    The spray-painted canvas “Girl With Balloon” was subjected to furious bidding at the Contemporary Art Evening Sale with a winning bid by telephone, fetching more than three times its pre-sale estimate and a record price for the mysterious artist. Shortly after the auction was concluded, an alarm from within the painting sounded, with most of the artwork emerging from the bottom in strips. Hidden within the base of the frame was a shredder.

    “We’ve just been Banksy’ed,” Alex Branczik, Sotheby’s European head of contemporary art, said at a press conference after the auction.

    “We have not experienced this situation in the past . . . where a painting spontaneously shredded, upon achieving a [near-]record for the artist. We are busily figuring out what this means in an auction context,” he said.

    Banksy, who remains one of the most mysterious artists of this era, began his career spray-painting buildings in England and has become a global figure. Some of his works include two policemen kissing, armed riot police with yellow smiley faces, and a chimpanzee with a sign displaying the words “Laugh now, but one day I’ll be in charge.”

    A post on Banksy’s official Instagram page showed the moment when auction house officials and bidders were stunned when the artwork self-destructed. He titled the post “Going, going, gone…”

    Social media immediately responded.

    kimsingh, an Instagram user, said, “You have consistently shown the courage to thumb your nose at the commercialism of art. Bravo !!”

    Another user asked, “Was it supposed to stop halfway or did it jam?”

    evrthmover said, “Fucking historical.”

    Banksy had made his feelings known about the commercial art world in a recent masterpiece titled “I Can’t Believe You Morons Actually Buy This Shit.”

  • "Fess Up To Reality" – Former Google Exec Exposes Silicon Valley Hypocrisy In Scathing Essay

    After overcoming the temptation to publish under a pseudonym, former Google PR executive Jessica Powell has finally dropped her long-awaited satirical novel/memoir “The Big Disruption” last week. In the highly anticipated book – and in an accompanying personal essay published on Medium – Powell offers what may be one of the most scathing critiques of Silicon Valley from a former executive at one of its biggest and most influential companies.

    Powell

    Some of her claims are nothing short of shocking – like when she admitted in her essay that she quit Google last August (she was the company’s top PR executive, reporting directly to CEO Sundar Pichai) not to go back to school to study creative writing, as was reported at the time, but because she “got tired” defending the company’s unscupulous actions. In particular, she cited YouTube’s argument to UK lawmakers that it couldn’t censor all of the far-right and jihadist recruitment content posted on its platform because of the sheer volume of content – a claim that Powell said was an outright lie, per the Daily Mail.

    Memorably, there were some instances where Google even paid some of the accounts that posted terrorist content.

    Google has been widely criticised for allowing jihadists, far-Right extremists and other hate preachers to post content on its YouTube video platform. In some cases, it funnelled cash from advertisers to the extremists posting videos.

    But the firm has repeatedly told MPs it cannot stop problem content because of the sheer volume of videos that are uploaded to YouTube.

    Miss Powell was in charge of the company’s response to the criticism, reporting directly to Google’s chief executive Sundar Pichai.

    Her decision to quit the lucrative role in August last year surprised many in the industry. At the time, Miss Powell claimed she was leaving to go back to university to study creative writing.

    However, in her essay, published for free on the Medium website, she admitted she needed to ‘take a break from the issues that I got tired of defending at parties’.

    She said: ‘On the surface, things seemed really important and exciting. We were doing big things! Bringing the internet to the developing world! But also, on some level, it all felt a bit off, like when you go on vacation and find yourself wondering when it’s going to feel like the Instagram pics other people have posted.’

    While Silicon Valley insiders probably think they’re among the most noble people on the planet as they fight to expand Internet access in the developing world and support other similarly “noble” causes, Powell argues that there’s a certain cognitive dissonance that arises from tech industry excuses about its failures to combat election hacking and its unwillingness to be transparent about how user data is monetized.

    “This is an industry that takes itself far too seriously, and its own responsibility not seriously enough.”

    […]

    “You can’t tell your advertisers that you can target users down to the tiniest pixel but then throw your hands up before the politicians and say your machines can’t figure out if bad actors are using your platform.”

    “You can’t buy up a big bookstore and then a big diaper store and a big pet supply store and, finally, a big grocery store, national newspaper, and rocket ship and then act surprised when people start wondering if maybe you’re a bit too powerful.”

    Powell urged Silicon Valley to “end the self-delusion” and “fess up to reality” or work toward holding itself to a higher ethical standard.

    “I want Silicon Valley to end the self-delusion and either fess up to the reality we are creating, or live up to the vision we market to the world each day. Because if you’re going to tell people you’re their saviour, you better be ready to be held to a higher standard.”

    Of course, no Silicon Valley tell-all would be complete without details of the sexual harassment that’s reportedly rampant in the valley. And Powell’s essay is no exception.

    Should I start with the early stage companies? Like the time I was at a startup and the founder I was working for — a guy who owned a hundred shirts in the same color and quoted Steve Jobs on a daily basis — asked me whether we should hand out dildos as company swag or consider converting our social media platform into an anonymous sex club. (We even whiteboarded it.)

    Or maybe I could start with the money — all the absurd valuations with seemingly little basis in reality. Or the time a partner at a VC “jokingly” offered up my female friend, his employee, as an enticement for a founder to work with his firm.

    To be sure, Powell isn’t saying anything new. All of these criticisms of Silicon Valley have been lodged in the past – but mostly by outsiders. The fact that she was a senior executive working her tech – and that she walked away from the money because she became disillusioned – is almost as relevant as the details of her story.

  • Think You're Prepared For The Next Crisis? Think Again

    Authored by Adam Taggart via PeakProsperity.com,

    Even the best-laid preparations have failure points…

    No plan of operations extends with any certainty beyond the first contact with the main hostile force.

    ~ Helmuth von Moltke the Elder

    Everybody has a plan until they get punched in the mouth.

    ~ Mike Tyson

    Scottish poet Robert Burns aptly penned the famous phrase: “The best laid schemes o’ mice an’ men/Gang aft a-gley.” (commonly adapted as “The best laid plans of mice and men often go awry.”)

    How right he was.

    History has shown time and time again that the only 100% predictable outcome to any given strategy is that, when implemented, things will not go 100% according to plan.

    The Titanic’s maiden voyage. Napolean’s invasion of Russia. The Soviet’s 1980 Olympic hockey dream team. The list of unexpected outcomes is legion.

    Dwight D. Eisenhower, the Supreme Commander of the Allied Expeditionary Forces in Europe during WW2, went as far as to say: “In preparing for battle, I’ve always found that plans are useless but planning is indispensable.”

    This wisdom very much applies to anyone seeking safety from disaster. Whether preparing for a natural calamity, a financial market crash, an unexpected job loss, or the “long emergency” of resource depletion — you need to take prudent planful steps now, in advance of crisis; BUT you also need to be mentally prepared for some elements of your preparation to unexpectedly fail when you need them most.

    Here are two recent events that drive that point home.

    Lessons From Hurricane Florence

    A family member of mine lives in Wilmington, NC, which received a direct hit last month from Hurricane Florence.

    Being an avid “prepper” who has lived on the east coast all his life (i.e., well-experienced with the late summer/early autumn hurricane season), he was MUCH more geared up for this storm than his neighbors. He also had nearly a week’s advance notice to top off his preparations as the media tracked Florence’s trajectory following its formation off of the west coast of Africa.

    But as ready as he thought he was, he still found he was vulnerable in places he hadn’t anticipated.

    While he and his family made it through the storm all right in the end, he experienced numerous failures in his preps throughtout. Here are just a few:

    • Climate-related corrosion — despite careful efforts to store his emergency gear responsibly, he discovered the humid North Carolina climate had ruined several pieces of equipment. The alkaline batteries used in the emergency radios had exploded, corroding the terminals and rendering the devices useless. Similarly, the wick controls on several kersosene lanterns had rusted to the point of inoperability. The lesson here? If you live in an area that experiences excessive conditions (heat/cold/humidity/mold/etc) for even part of the year, you must check your gear regularly to ensure it’s still functional.

    • Incorrect assumptions — Several components did not work as expected when deployed. The “universal” gas line purchased in advance to connect his collection of camping stoves to a large propane tank simply didn’t fit. Similarly, his Gas Tapper siphon failed to work, which he was hoping could help neighbors refuel their generators by transferring gas from their cars. But in every case but one, it simply didn’t work. The takeway? If you haven’t tested a specific piece of gear in advance, under non-emergency conditions, assume it won’t work when you need it.

    • Random fate — Sometimes, as Burns said, plans just go awry. In this case, a diesel truck had been configured to act as a generator and provide electricity to key appliances (freezer, fridge, etc) should the power go out for a prolonged period — which it did. But as random fate would have it, the starter motor failed. The truck sat there like a big useless brick during the blackout. Fortunately, there was another vehicle in the garage set up similarly that did work. The lesson? Always, always have backups in place for any resources that perform an essential function.

    Lessons From The Nevada Desert

    The 30+ Peak Prosperity members who spent last week at a defensive firearm training program in the Nevada desert received a similar ‘reality check’.

    Most who participated already owned firearms and had invested previous hours at their hometown ranges honing their shooting skills. Or so they thought.

    What they quickly realized is that shooting at a stationary paper target under controlled conditions is easy. But maintaining the same accuracy and precision under stress is hard.

    Simply adding time-pressure makes shooting well exponentially harder. From a distance as short as 5 yards, hitting the target center-mass repeatedly is an easy task when untimed. But put on a 1.5-second time limit to get your shots off — which leaves little time for aiming and spikes your adrenaline levels — and suddenly the misses multiply.

    And of course, using a handgun in an acutal kinetic altercation is orders of magnitude more stressful than what we experienced. Low lighting, a moving target who may be armed and/or actively attacking, endangered loved ones, the threat of being seriously injured/killed — these factors will undoubtedly handicap your proficiency to a MUCH greater extent.

    We did one simulation drill ‘clearing’ a home, opening doors that may or may not have bad guys behind them. The added uncertainty and awkward ‘real life’ obstacles resulted in a lot of misses and accidentally-killed bystanders. Thank god it was just a simulation.

    The hard-hitting insight learned during this experience is: If you haven’t stress-tested your gear and your skills under the same conditions you plan to rely on them in, you’re woefully underprepared. And to think different is dangerously deluding yourself.

    For those of you with preparations in place — in case of a home invasion, or a fire, or a week without access to the grocery store, or a grid-down event, etc — have you actually done a ‘dry run’ to explore how smoothly/poorly your plans work in practice?

    How Ready Are You, Really, For A Financial Crisis?

    Here at PeakProsperity.com, we’ve been vocally warning about the high risk of another global financial crisis on par with (or worse than) that seen in 2008.

    Quite honestly, we’ve been warning about this for a long while, as markets have powered higher. While that’s been very frustrating to endure, we see the market’s manic melt-up as further reason to worry — as the fall from today’s over-extended heights will be that much more painful.

    And we may finally be seeing the onset of a correction. Wall Street’s ‘Fear Gauge’ is suddenly spiking, signalling that traders expect increased volatility along with falling prices:

    Echoes of February Collapse Reappear in Friday Fear Gauge Inversion (Bloomberg)

    October 5, 2018, 9:53 AM PDT

    The scariest Halloween costume imaginable pales in comparison to a Friday inversion of the VIX futures curve.

    A severe sell-off in technology stocks has pushed the front-month VIX futures contract to a premium relative to the second-month contract.

    VIX futures are based off the Cboe Volatility Index, a measure of 30-day implied volatility for the S&P 500 Index that’s often called the “fear gauge.”

    Typically, the curve is in contango — that is, upward sloping — because the outlook for U.S. equities is more uncertain over longer time periods than shorter ones. The historical pattern of realized volatility shows it’s prone to outsized spikes but generally trades in a modest range.

    A curve that’s in backwardation — the opposite of contango — indicates traders are acutely concerned with the near-term outlook for equities. This structure also provides a tailwind to investors looking to go long volatility through exchange-traded products.

    The same situation happened on a pair of inauspicious Fridays. The VIX futures curve inverted on Aug. 21, 2015 and Feb. 2, 2018.

    Given the spasm of instability that has rocked the bond and stock markets over the past 48 hours, Chris Martenson just issued a warning to Peak Prosperity’s enrolled subscribers, explaining why the recent activity is so concerning.

    Here’s just a small part of what he had to say:

    Joining the 10-year in breaking its long-term downtrend line are the 30-year and 5-year bond yields:

    Dialing in a little closer, we see that the 30-year bond yield has more recently carved out a pretty convincing “head and shoulders” pattern which indicates a strong likelihood of heading higher:

    Here’s the 5-year bond yield chart. It also looks like a breakout:

    What’s fascinating is that as the stock market has only recently started to wobble a bit, the main US Treasurys have been declining in earnest since mid-August:

    To recap: what we’re seeing now is very consistent with the end of a major credit-liquidity cycle.  Everything is being sold.  Stocks and bonds.

    There’s been no ‘Jell-O moving around the plate’ — which is the flight-to-safety effect where bonds do well on days stocks do poorly, and vice versa.  Both stocks and bonds are being sold off, and bonds have been going first.

    As they say on Wall Street: Stocks are for show, but bonds are for dough. Meaning the smart money is in bonds, and they tend to tell the tale first.

    So how ready are you, really, if we’re indeed headed into another 2008-style market crash?

    One in which the major stock market indexes could drop 50% or more in a matter of just a few weeks? Where housing prices could drop by 30-40% (or more) and home buyers go on strike? Where bond prices relentlessly drop as interest rates march higher, freed from a decade-long suppression at historic lows? Where mass layoffs return, and hundreds of thousands of workers lose their jobs each month?

    Things could get ugly. Really, really ugly. 

    Are the steps you’ve put in place to-date sufficient? Have you simulated what’s most likely to happen to your portfolio, your job, and your living standards under a variety of scenarios?

    I think for most reading this, the honest answer is “no”. No one is perfectly prepared. You can always do more.

    For those feeling more vulnerable than they’d like, here are our recommendations for using the remaining time we have (which may not be much) wisely:

    1. Attend to any unfinished basics — Money is just one component of the true wealth you need to protect. Another Great Recession will have impact on your home, your relationships, your community, your mental state, etc. First, take our Self-Assessment (it’s free) to see where you’re currently most vulnerable. Then, review our guide for developing resilience (also free) for guidance on the specific steps to take to best protect yourself.

    2. Crash-test your portfolio with a professional financial advisor — How vulnerable are your current financial holdings to a major market disruption? If stock/bond/home prices suddenly drop from here, and/or you lose your job, what impact will that have on your lifestyle and your retirement plans? If asset prices fall and you have dry powder to put to use, what logic will dictate the investments you make at that time? These are all critical exercises to go through with your professional financial adviser before the next crash arrives. Contact your adviser to go through them soon — or, if you don’t have a good one, consider scheduling a crash-test consultation (it’s free) with the adviser Peak Prosperity endorses.

    3. Monitor carefully the key crash indicators — Watching the right indicators is the best way to avoid getting caught unawares by the next financial correction. This was a principal theme of our recent New York Summit featuring David Stockman, Chris Martenson and James Howard Kunstler. You can watch several short video clips from the event (again, for free) by clicking here.

    And finally, read the report WARNING: The Markets Are Suddenly Looking Very Sick that Chris Martenson just released. It’s an excellent composition of the recent developments that point to a market breakdown in-progress.

    Remember: the only valueable preparations are those put in place before crisis arrives.

    Or to put it more simply: To fail to plan is to plan to fail.

    So get going.

    Click here to read Chris’ full report (free executive summary, enrollment required for full access)

  • The States With The Most (And Least) "Legal" Opioid Sales

    Submitted by Priceonomics

    Today, the opioid crisis in America has become a public catastrophe. Drug overdose, many due to the abuse of opioids is the new leading cause of death among Americans under the age of 50, overtaking automobile accidents and heart disease.

    What’s perhaps most shocking about the crisis, is its cause is widely considered to be the overuse and over-prescription of legal painkillers, namely Oxycontin. Today opioid use has expanded beyond prescription narcotics to illegal (and often times deadly) drugs like heroin and fentanyl.

    Given the known risk of prescription opioid drugs, are their sales on the rise or decline America? And in which states are legal opioids sold at the highest (and lowest) rates and how does that compare to drug overdose rates?

    Along with Priceonomics customer Consumer Protect, we decided to analyze government data provided by the Drug Enforcement Agency of controlled substances sales to look at the per capita opioid sales by state and over time.

    We found that opioid sales today have more than doubled versus in 2000. However, sales today have declined 28% since 2010. Today, the states with the highest rate of opioid sales are Tennessee, Oklahoma and Nevada, in that order. The places with the lowest rates of opioid sales are Washington DC, Minnesota and Illinois.

    We found that the current rate of opioid sales was mostly uncorrelated with drug overdoses today. However, we found a much stronger relationship between past sales in 2010 and current levels of overdoses. 

    Put differently, where “legal” sales of prescription opioids were high in the past, today we see their consequences in the form of drug overdoses.

    ***

    To provide some context, first let’s look at the rate of legal opioid sales in the United States over the last almost two decades. The data is provided by the Drug Enforcement Agency which tracks the sales of the two main variants of prescription opioids: Oxycodone (Oxycontin, Percocet) and Hydrocodone (Vicodin, Norco).

    From 2000 to 2011, the rate of opioid sales per 100,000 people in the United States more than triples from 10.6 to to 33.9. By 2011, however, as the harmful addictive side-effects of the drugs become more well publicized, crackdowns on “prescription mills” began.

    Today, still 24.4 kilograms of opioid drugs are sold per 100,000 people in America, more than twice as much as in 2000, though 28% less than the peak of 2011.

    While the national average in 2017 was 24.4kg opioids sold per capita, that figure varies dramatically by location. The chart below shows each state ranked from most to least opioids sold.

    In Tennessee, a state with a full blown opioid crisis, has the highest rate of opioid prescription pharmaceuticals sales in the country. In Tennessee, nearly twice as many opioids are sold as the national average. Oklahoma and Nevada round out the top three states with the highest rate of opioid sales. On the other hand, the District of Columbia has the nation’s lowest rate of opioid sales, followed by Minnesota and Illinois.

    Over the last two decades, where did opioid sales in America explode the fastest? Opioid sales increased everywhere, but in some states, they grew much faster than others.

    Kansas ranks #1 as the state with the highest rate of opioid sales growth in the country, with sales increasing by 259% versus year 2000. All of the top 10 states with the fastest growth in opioid sales increased more than 200%. Even in DC, Massachusetts, and Maine (the states with the slowest growth) have seen opioid sales expand approximately 50%.

    Is there any good news? Well, since the beginning of the decade, the rate of opioid sales have declined. The following charts show the states making the most and least progress on curbing sales of these drugs.

    During this decade, states like Florida, Maine and Delaware have seen their rate of opioid sales decline. During this time period all states have had a reduction in legal opioid sales, with the exception of Idaho, Wyoming and Arkansas where sales are up modestly.

    ***

    Is there any relationship between the level of prescription opioid sales and the amount of drug overdoses? Next, we looked at drug overdose data for 2016 as compiled by the CDC compared to opioid sales.

    At first, we compared today’s opioid sales in a state to its death rate and found it had a near zero correlation. Next, however, we looked at today’s death rate versus the rate of prescription opioid sales at the beginning of the decade when sales were peaking.

    Did the proliferation of “legal” opioids in the past result in more widespread deaths from drug overdose today? The following chart shows the relationship:

    While further analysis is required, we found a positive relationship between past legal opioid sales and fatal drug overdoses in 2016 (the most recent year the data is available). The data provides some credence to the thesis that legal sales of prescription drugs in the past helped hasten the dramatic crisis going on today. What’s more, this data highlights the magnitude of the opioid epidemic in places like West Virginia where the death rates from drugs are nearly off the chart.

    ***

    Today’s opioid epidemic in large part has been catalyzed by the proliferation of drugs like Oxycontin in the 2000s and 2010s. 

    While sales of this drug have recently been reigned in, their rate of sale continues to be much higher today than two decades ago with states like Tennessee, Oklahoma, and Nevada having the highest rate of sales in the nation. Most recently, Illinois, Minnesota, and Washington DC have the lowest rate of opioid sales.

    In the last decade, the rate of legal sales has slowed down in all states except Arkansas, Wyoming and Idaho. However, the opioid epidemic has worsened even as prescription drugs have become harder to come by. Legal prescriptions may be less available, but users have switched to illegal drugs like heroin and fentanyl, which are cheaper and more deadly.

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