Mar 09

Today’s News 9th March 2018

  • Trump Administration To Release Obama-Era Fast And Furious Documents

    Authored by Mac Slavo via SHTFplan.com,

    We may finally get some answers to the high-level Obama administration’s gun-running scandal dubbed “Fast and Furious.”  The Trump administration is promising to release the documents pertaining to that scandal that were withheld by former Attorney General, Eric Holder.

    Operation Fast and Furious was the Obama-era operation in coordination with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) in which the federal government allowed criminals to buy guns in Phoenix-area shops with the intention of tracking them as they were transported into Mexico. But the agency lost track of more than 1,400 of the 2,000 guns they allowed smugglers to buy.

    “For over six years, the House Oversight Committee has fought for additional documents related to Operation Fast and Furious. Today, the Committee finally reached a conditional settlement with the Department of Justice,” Amanda Gonzalez, spokeswoman for the House Oversight Committee, said in a statement to Fox News.

    “The Committee seeks all relevant facts so we can learn from the mistakes made by the Justice Department. We have a responsibility to uncover why they worked so hard to hide this information from the Committee, the family of [slain border patrol agent] Brian Terry, and the American people.”

    Brian Terry was killed in 2010 by an illegal immigrant with a weapon used in the botched Operation Fast and Furious. Terry died in a gunfight between Border Patrol agents and members of a six-man cartel “rip crew,” which patrolled the desert along the U.S.-Mexico border looking for drug dealers to rob. The cartel member suspected of killing Terry was apprehended in 2017.

    Terry’s brother, Kent Terry also wants the scandal investigated.

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

    “We need to find out the truth, exactly what happened, how it happened, why it happened,” Kent Terry said on Fox & Friends Tuesday.

     

    “We need Mr. Trump, President Trump, to unseal the documents, reverse executive privilege so that we know what happened, and that we can hold the people accountable that are responsible.”

    According to Fox News, the Justice Department entered into a conditional settlement agreement with the House Oversight and Government Reform Committee. The settlement agreement was filed in federal court in Washington D.C. and ends six years of litigation arising out of the previous administration’s refusal to produce records requested by the committee.

    “The Department of Justice under my watch is committed to transparency and the rule of law,” Attorney General Jeff Sessions said in a statement Wednesday. “This settlement agreement is an important step to make sure that the public finally receives all the facts related to Operation Fast and Furious.”

    The White House has yet to release an official statement on the Justice Department’s settlement.

  • Pentagon "Disappointed" That Putin Will Use New Weapons To "Intimidate And Coerce" The US

    During a Wednesday meeting with members of Congress to testify about the Pentagon’s latest budget request, one US military leader told lawmakers that he was “disappointed” with Russian President Vladimir Putin’s recent unveiling of a powerful nuclear weapon, adding that the Russian leader will likely use it to “further intimidate” the US and its NATO allies, per RT.

    “I think the statements made by Russian president Putin while not surprising were nonetheless disappointing. While we have been aware of the development of Russia’s capabilities and watching with concern some of the development that has occurred in terms of Russia’s doctrine and exercise program, it is nonetheless disappointing to see that the president of the Russian Federation chose to feature these capabilities in a way that he did,” John Rood, under secretary of defense policy, told the House Subcommittee on Strategic Forces, during the discussion.

    Another leader, Commander of US Strategic Command Gen. John Hyten, said Putin’s declarations were “not surprising”.

    “Putin’s statements are not surprising and only reinforce Russia’s commitment to develop weapons designed to intimidate and coerce the US and its allies,” Hyten said.

    During his annual state-of-the-nation address to Russian lawmakers last week, Russian President Vladimir Putin shocked the world – grabbing headlines in US and other western media – by unveiling a new intercontinental missile that Putin claimed is capable of evading US missile defenses. Putin accompanied this announcement with a presentation showing footage of weapons testing, as well as digital representations of what a launch would look like.

    Putin once again blamed the US for Russia’s decision to develop its newest weapons, claiming that George W Bush’s decision to withdraw from the anti-ballistic missile treaty in 2002.

    In response to Putin’s demonstration, a Pentagon spokeswoman said last week saying that “the US has known for a long time that Russia has been developing destabilizing weapons systems…” and that the US is “fully prepared” to handle the advances threat. On Wednesday, Hood echoed that statement, admitting that Russia’s new weapons systems had probably been in development for “quite some time.

    “Those capabilities have obviously been in development for quite some time. President Putin talked about their maturity. They are clearly not the capabilities that were developed in the last few months or the last year,” Rood admitted.

    Perhaps more surprisingly, he also claimed that US-led NATO missile defense systems were “never intended” to neutralize either the Russian or the Chinese strategic nuclear arsenal. “That has not been our plan in focus and the capabilities developed do not enable us to do that,” he said.

    Still, the US still has enough nuclear and conventional-weapons heft to counter what he referred to as “revisionist powers” that are seeking to “reshape the world order and change territorial borders.”

    Hyten agreed, and warned lawmakers that, without massive investment in defense, the existing American arsenal could only support the “mutually assured destruction” doctrine for about a decade before the US’s current systems reach the end of their natural lives.

    “There is nothing they can do besides a massive attack against our country that we will not have the ability to respond to,” Hyten explained. “But we have to modernize these capabilities because 10-12 years from now all the capabilities that I operate today will be reaching end of life.”

  • Flying Homes And Floating Cities: How Billionaires Travel

    Authored by David Craggen via Safehaven.com,

    In the early 1900s, John Jacob “Jack” Astor IV was thought to be among the richest people in the world, with a net worth of nearly $87 million when he died, equivalent to $2.21 billion in 2017. In April 1912, he was traveling back home to New York after holidaying in Egypt, accompanied by his wife. Naturally, he was the richest passenger on the RMS Titanic.

    We’ve come a long way since the Titanic, and now the rich travel alone–and in unimaginable style.

    By Plane

    Clearly the most efficient way of transport for everyone, wealthy included, is by air. Nowadays, private-jet makers like Gulfstream, Bombardier, and Embraer are taking their offerings to new levels of luxury, technology, and performance.

    At $66.5 million, the G650ER is Gulfstream’s flagship product. It has a range of more than 7,500 miles, meaning it can complete flights across the Pacific Ocean.

    From the outside, it’s about a smooth and sleek as they come…

    Source: Tyrolean Jetstream

    And on the inside, it’s luxury all the way…

    Source: Tyrolean Jetstream

    Next on our winged luxury list is the Bombardier Global 7000, designed to be the ultimate long-distance, purpose-built private jet.

    It’s not in the air yet, though. This $73-million aircraft is set to enter service in the second half of this year.

    From the ‘living room’, to the formal dining and master suite, the Bombardier makes trans-Atlantic travel a breeze…

    Source: Bombardier.com

    By Car

    Not all luxury is in the sky, and limousines have always been the epitome of class, screaming wealth, stability and style.

    They’re also the easiest way to demonstrate wealth: Unlike planes, helicopters and yachts, these luxury toys are easy to show off in public.

    While the most popular limousines can run upwards of $300,000, a top-end customized version can cost up to $4 million.

    The Mercedes Benz Maybach, with an average price tag of around $700,000, is our favorite, and its most expensive model runs for around $1.4 million.

    There’s even a bullet-proof version:

    Source: Daimler

    Still, Mercedes doesn’t have the market cornered when it comes to luxury limousines. The entry-level price for the Rolls-Royce Phantom “for icons” is $400,000, with the most expensive model sold for $3.8 million.

    (Click to enlarge)

    Source: EconomicTimes

    By Boat

    By far the showiest form of ‘transportation’ that exists, is designed for wealth on water.

    Modern yachts, one of the oldest badges of wealth, are not just for sailing or for the banal task of getting from one place to another. Today’s most expensive yachts boast swimming pools, helipads and VIP suites.

    The most expensive yacht, the Streets of Monaco, is still under construction and will soon be unveiled. With a $1-billion price tag, this beast is the size of a small, floating city – complete with streets and famous Monaco landmarks such as the Monte Carlo Casino.

    In case you don’t believe us, here is the mock-up:

    (Click to enlarge)

    Source: Curbed

    The ‘floating city’ eclipses even the … Eclipse the world’s second-most expensive yacht, featuring two helicopter pads, 24 guest cabins, two swimming pools, several hot tubs, and a disco hall.

    Source: Yachtcharterfleet.com

    Oh, and it also features bullet-proof glass and a German missile defense system—just in case.

    What could possibly be next?

    That’s easy: Luxury space rides.

    Leading giants like Amazon, SpaceX, Microsoft, Virgin Group, Google, and Facebook are all getting in on the action.

    A study published last summer by Bloomberg profiled some of the world’s wealthiest entrepreneurs who’ve invested in space travel startups and technology innovations. There are a handful of companies at work on rockets fit for human travel.

    We can only imagine how luxurious the future of space travel will be…

  • February Payrolls Preview: Watch The "Hours Worked"

    With the February jobs report due at 830am ET on Friday morning, here is a recap of Wall Street expectations.

    While recent macro economic data has been solid, and suggests a strong number, remember: nobody cares  about the actual payrolls number any more, after all the US is about to have sub-4% unemployment with over 95 million Americans not in the labor force. The only thing that matters is what is the average hourly earnings, and whether in February the BLS can pull off the same trick it did last month when it was hours worked that dropped, giving the market the impression that hourly pay had risen when actually just the denominator shrank.

    And even if actual wages don’t rise, and they probably won’t, the other thing to remember is that wages aren’t actually important – so ignore all you read above – what is important is the “intention” to raise wages, something company CEOs have learned very well.

    Below is a quick summary of Wall Street expectations via RanSquawk  and Goldman.

    PREVIEW: Non-farm Payrolls (Feb 2018)

    • Non-farm Payrolls: (EXP +200k, PREV +200k)
      • Private Payrolls: (EXP +191k, PREV +196k)
      • Manufacturing Payrolls: (EXP +15k, PREV +15k)
      • Government Payrolls: (PREV +4k)
      • Unemployment Rate: (EXP 4.00%, PREV 4.10%)
    • Average Earnings Y/Y: (EXP +2.8%, PREV +2.9%)
    • Average Earnings M/M: (EXP +0.20%, PREV +0.30%)
    • Average Work Week Hours: (EXP 34.4hrs, PREV 34.3hrs)
    • U6 Unemployment Rate: (PREV 8.20%)
    • Labour Force Participation: (PREV 62.70%)

    PAYROLL TRENDS: Trend rates remain firm. Payroll growth has averaged 176k/month over the last 12-months, 180k/month over the six-months, and 192k/month over the last three-months, and the consensus view expects 200k in February.

    PAYROLL GROWTH: ADP reported another solid increase in February (235K vs expected 193K; previous revised up), above what was suggested by surveys and hard data. Pantheon Macroeconomics says that it may imply that the third element of ADP’s model (the data which ADP collects itself from firms that use its payroll services) was stronger than expected. Accordingly, Pantheon’s forecast for NFP has been nudged up to 225K from 200K.

    EARNINGS GROWTH: The February CB Consumer Confidence indexes’ “jobs plentiful” measure increased, while jobs “hard to get” dropped; the difference between the two consequently improved to a 16-year high, consistent with a jobless rate around 4%, according to Capital Economics, which also adds that labour market conditions are tight, and beginning to put upward pressure on wages. Meanwhile, respondents expecting incomes to increase hit a 15-year high; based on historical relationships, CapEco says, it hints that average hourly earnings growth will reach 3.5% by early 2019.

    EARNINGS CAUTION: Some are treating last month’s rise in AHE with caution. RBC points out that wage growth was not broad-based (production and non-supervisory workers, making up 80% of the workforce, saw no rises). Others argue that weather-related factors may have been in play. It is worth noting that in January, the U6 measure of unemployment (‘underemployment’) ticked up by 0.1ppts to 8.2% despite the rate of participation remaining stable.

    BUSINESS SURVEYS: ISM non-manufacturing survey’s employment component fell 6.6 points in February, down to 55.0 points. While the monthly drop appears large, it merely returns the employment index to its average level for 2017, Oxford Economics points out, adding the index remains safely in expansionary territory, indicative of a healthy labour market. ISM manufacturing survey’s employment component rebounded 5.5 points to 59.7 in February, after falling 3.9 points in January, consistent with solid payroll growth. Some respondents cited labour shortages as their ‘biggest challenge’ and OxEco says this may present an obstacle for continued gains in the employment component ahead.

    UNEMPLOYMENT CLAIMS: Weekly claims rose slightly to 231k in the latest week, but we came off levels last seen since 1969. The four-week moving average is currently knocking around 222.5k, slightly below the 225k (w/e 3/Feb). While claims data usually is subject to the usual caveats regarding its ‘noisiness’, analysts are giving credence to the data amid other evidence of tight labour markets, making it tough to fill vacancies. Indeed, this was alluded to in the Fed’s latest Beige Book, with several districts noting worker shortages in most sectors. (It is also worth noting that the latest Beige Book made 11 references to “wage pressures”, up from eight mentions a year ago, as UBS points out).

    LAYOFFS: Announced job cuts remain low, Challenger reported, with announced job cuts falling to 35.369k (prev 44.653k). So far this year, Challenger says, employers have announced 80,022 cuts, 3.5% lower than through February last year, and the lowest number of announced job cuts between January and February since 1995. The consultancy also adds that announced job cuts have been under 50k for 22 straight months, the longest streak in its tracking.

    * * *

    Focusing next on Goldman – which is usually the lead penguin in the sellside analyst procession and everyone else follows – the bank expects 210k jobs in February, 10k above consensus as a result of “warmer weather and unseasonably light snow during the survey week…. Labor market fundamentals also appear solid and may have improved further, given new cycle records for initial claims and Conference Board job availability.”

    Following a 4th consecutive 4.1% reading, Goldman also estimates the unemployment rate fell to 4.0% in February, which probably means another half a million people dropped out of the labor force. Additionally, a sharp unexplained rise in African American jobless rates seems likely to reverse, after adding a tenth to the January unemployment rate.

    On the most important thing, hourly earnings, Goldman estimates a 0.3% month-over-month increase in average hourly earnings: “We anticipate a boost to average hourly earnings from favorable calendar effects in February. However, we see the risks to this estimate as skewed to the downside as the calendar effect is not particularly large, and we estimate the year-over-year rate fell a tenth to +2.8%.”

    Some more details from Goldman, first arguing for a stronger report:

    • Weather. NOAA weather-station data indicate that snowfall during the survey week was unseasonably low, both on an absolute basis and relative to January. As shown in Exhibit 1, our measure of population-weighted snowfall would suggest a boost to job growth relative to trend of around 15-35k (the right axis is inverted).

    Exhibit 1: Snowfall Was Below Seasonal Norms and Declined from Survey Week to Survey Week

    • Jobless claims. Initial jobless claims fell to a new cycle low during the five weeks between the payroll reference periods (227k vs. 244k for January), and the absolute level suggests a very low pace of layoffs. Additionally, continuing claims edged lower, falling 6k from survey week to survey week.
    • Manufacturing-sector surveys. Manufacturing-sector surveys generally improved in February, and the ISM employment component in particular rose 5.5 points to 59.7. Our manufacturing employment tracker rose 1.8pt, also to 59.7, suggesting a solid pace of job gains in that sector. Note also that the payroll reference period preceded the steel and aluminum tariff announcement by the Trump administration. Manufacturing payroll employment rose 15k in January and has increased by 22k on average over the last six months.
    • ADP. The payroll processing firm ADP reported a 235k increase in February private payroll employment, 35k above consensus expectations. While some of the February strength may have reflected firmness in the financial and economic indicators used as inputs in the ADP model, we think the strong report nonetheless provides incremental evidence that the pace of job growth remained firm.
    • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas pulled back 2k to 32k (SA by GS), its third consecutive decline. On a year-over-year basis, announced job cuts also declined by 2k.

    Arguing for a weaker report:

    • Job postings. The Conference Board’s Help Wanted Online (HWOL) report showed a 3.8% decline in online job postings (mom sa), the first outright drop in 5 months. We place limited weight on this indicator, in light of research by Fed economists that suggests the HWOL ad count has been depressed by higher prices for online job ads. The Conference Board is currently reviewing its methodology accordingly.

    Neutral factors:

    • Service-sector surveys. Service-sector employment surveys improved on net in February, as our non-manufacturing employment tracker rose 0.9pt to 56.0. However, the sharp drop in the ISM non-manufacturing employment component (-6.6pt to 55.0) highlights the lack of consistency across measures. Encouragingly though, the Conference Board labor market differential – the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get – rose to a new 16-year high (+3.8pt to +24.7). Service-sector job growth picked up to 139k in January and has increased 127k on average over the last six months.

    Here again, for your amusement, is Goldman trying to refute how the drop in the hours worked had nothing to do with the increase in wages per hour:

    We estimate average hourly earnings increased 0.3% month over month. In the last employment report, average hourly earnings rose 0.34% and the year-on-rate improved to 2.9%, four tenths above the pace in the December report. While average hourly is noisy and often mean-reverting, there are no obvious distortions that can explain last month’s upside surprise. Calendar effects should have been negative, one-off tax reform bonuses are outside the scope of average hourly earnings, and while minimum wage hikes probably boosted the month-to-month change at the margin, the strength was concentrated among higher-paid supervisory and nonproduction workers.

    One popular narrative in the marketplace is that the firming wages in the last report were the result of a weather-related decline in the workweek. While we have argued that the total dollar value of payrolls tends to be “stickier” than hours, we believe these effects primarily relate to calendar configurations and payroll-system reporting, as opposed to weather. And as shown in Exhibit 3, the January wage strength was not concentrated in industries with a declining workweek (retail trade being the key exception). In fact, wage growth was relatively strong among industries with a flat workweek, most notably the large professional services and education and health categories. We instead expect a boost from favorable calendar effects. However, we view the risks to our 0.3% estimate as skewed to the downside, as the boost we expect from favorable calendar effects (the survey week ending on the 17th) is not particularly large. Reflecting this, we forecast a one tenth decline in the year-over-year rate to 2.8%.

    Exhibit 3: No Compelling Relationship between January Wage Growth and the Workweek

    Finally… the flu?

    Relatedly, we note that elevated flu activity in January (relative to seasonal norms) may have played a role in the decline in the workweek last month, and indeed the household survey “Not at Work: Own Illness” series showed a sizeable increase (+198k to 1,283k). However, we find no compelling relationship between this series and average hourly earnings growth (or with nonfarm payrolls). We suspect this reflects the inclusion of paid sick leave in the payrolls and earnings statistics (as well as in the workweek). Taken together, we do not expect a significant unwind in average hourly earnings in tomorrow’s report.

    Translation: as hourly worked rebounds hard, average hourly earnings will slide, and the 10Y and stocks will surge as the great and fake wage inflationary scare of February is finally long forgotten.

  • No, Russians Do Not Hack The FCC's Public Comments

    Via MoonOfAlabama.org,

    A member of the Federal Communications Commission, Jessica Rosenworcel, wrote an op-ed for the Washington Post.

    It is unlikely that the headline was chosen by the author of the op-ed. The editors of the Washington Post opinion page wrote it. I also doubt that she would have chosen a picture of the FCC head to decorate her piece.

    For the record: The headline is false.

    The op-ed is about a request for comments the Federal Communications Commission issued last year in preparation of its net-neutrality decision. Anyone, and anything, could comment multiple times. Various lobbying firms, political action groups and hacks abused the public comment system to send copy-paste comments via single-use email accounts or even without giving any email address.

    But this had and has nothing to with Russia or Russians.

    Here are the top graphs of the the WaPo op-ed with the “Russia-did-it” headline:

    What do Sen. Jeff Merkley (D-Ore.), deceased actress Patty Duke, a 13-year-old from upstate New York and a 96-year-old veteran from Southern California have in common?

    They appear to have filed comments in the net neutrality record at the Federal Communications Commission. That ought to mean they went online, submitted their names and addresses, and typed out their thoughts about Internet regulatory policy. But appearances can be deceiving. In fact, each of these individuals — along with 2 million others — had their identities stolen and used to file fake comments.

    These fake comments were not the only unnerving thing in the FCC net neutrality record. In the course of its deliberations on the future of Internet openness, the agency logged about half a million comments sent from Russian email addresses. It received nearly 8 million comments from email domains associated with FakeMailGenerator.com with almost identical wording.

    I have emphasized the only words in the whole op-ed that are related to Russia. They are wrong. The author of that op-ed does not understand the FCC public comment system. Public comments are made by filling out a form on the FCC website leaving ones comment, some address data and an email address. Public comments are not “send” by email. Thus the FCC did not log any comments “sent from Russian email”. It logged comments made in a web form where the human (or program) making the comment provided a Russian email address as a means of contact. (It is obviously not expertise on communication issues that qualifies Jessica Rosenworcel for her position as FCC commissioner.)

    At least 12-13 million of the 21.7 million comments to the FCC were fake. 8 million email addresses entered in the form the FCC had set up were generated with www.fakemailgenerator.com, half a million were entered with *.ru Internet domains.

    FakeMailGenerator can use foreign domains for generating throw-away email addresses. In the screenshot below it generated an Hungarian one for me.

    If I would comment at the FCC and enter Reephy@fleckens.hu into the FCC form I would be counted as Hungarian. I would not have “send” that comment from an Hungarian email address. Nor would entering the comment make me Hungarian. Neither do *.ru email domains mean that the people (ab-)using them have anything to do with Russia.

    The Pew Research Center analyzed the 21.7 million comments the FCC received:

    Fully 57% of comments used temporary or duplicate email addresses, and seven popular comments accounted for 38% of all submissions

    The FCC and other agencies are required by law to accept public comments. But, as the op-ed says, it is utterly useless to request such public comments on the Internet without having some authentication system in place. The FCC had some email address verification system in place, but it did not use it. As the Pew Center writes:

    [T]he Center’s analysis shows that the FCC site does not appear to have utilized this email verification process on a consistent basis. According to this analysis of the data from the FCC, only 3% of the comments definitively went through this validation process. In the vast majority of cases, it is unclear whether any attempt was made to validate the email address provided.

    As a result, in many cases commenters were able to use generic or bogus email addresses and still have their comments accepted by the FCC and posted online.

    It is obvious that the FCC had no interest at all in receiving legitimate public comments. But the FCC at least did not blame Russia. The Washington Post editors do that when they chose a headline that has no factual basis in the piece below it. They abuse the op-ed which has the presumed authority of an FCC commissioner to reinforce their anti-Russian propaganda campaign.

    C. J. Hopkins notes that the cult of authority is systematically used to make the lunatic claims of Russiagate believable.

    Matt Taibbi writes that the aim of the Russiagate campaign was and is to target all dissent:

    If you don’t think that the endgame to all of this lunacy is a world where every America-critical movement from Black Lives Matter to Our Revolution to the Green Party is ultimately swept up in the collusion narrative along with Donald Trump and his alt-right minions, you haven’t been paying attention.

    That’s because #Russiagate, from the start, was framed as an indictment not just of one potentially traitorous Trump, but all alternative politics in general. The story has evolved to seem less like a single focused investigation and more like the broad institutional response to a spate of shocking election results, targeting the beliefs of discontented Americans across the political spectrum.

    Some commenters here lamented about my posts about the Steele dossier and or Russiagate issues. “It’s enough already.” But the issue is, as Taibbi points out, much bigger. In November 2016 the Washington Post pushed the ProPornOT campaign which denounced some 200 non-mainstream websites as “Russian propaganda”. This website is an “primary initial” target of that campaign.

    If the campaign succeeds to its full intent, Moon of Alabama will no longer be accessible.

    The Russiagate nonsense has do be debunked at each and every corner to prevent its further abuse against dissent on everything else.

  • BoJ Leaves Policy Stance Unchanged, Optimistic On Global Economy

    Having briefly injected some anxiety into markets over reported comments last week about paring back easing in 2019 (which were swiftly denied), Kuroda is likely to err on the dovish side in his comments after BoJ left all monetary policy levers unchanged.

    Consensus expectations are that the BOJ to leave all its key policy settings unchanged:

    • likely to keep the short-term rate at -0.1% and target for the 10-year JGB yield at around 0%

    • also likely to maintain the current pace of purchases of exchange-traded funds and real estate investment trusts

    • The BOJ is likely to retain its guideline on the annual pace of JGB accumulation at 80 trillion yen

    • Post-meeting comments by Kuroda are likely to be calibrated to avoid stoking upward pressure on the yen. That means he’s likely to avoid specifics if asked again about how or when the BOJ could manage an exit from extreme stimulus.

    And that is what we got. All policy levers unchanged.

    There was one dissenter – same as before – this guy not only wanted more NIRP, but also more QE, clearly unaware that the BOJ already owns more than half of all Japanese govt bonds.

    • BOJ Board Member Kataoka Votes Against Keeping Rates Unchanged

    • BOJ Kataoka: Should Take Additional Easing if Delay in Hitting Inflation Target

    • BOJ Kataoka: BOJ Should Lower Yields on JGBs of 10-Years and Longer

    Language surrounding the global economy is more optimistic.

    And don’t forget there lots of new faces on the BoJ…

    For now, Kuroda has made clear the bank remains committed to powerful easing and will stay the course until the inflation target is met. Even though the economy grew better than expected in the fourth quarter, there’s no shortage of worry spots.

    And as Bloomberg’s Chris Anstey concludes, all in all, very little change here, as we expected. The news on the BOJ, if any, today is going to come from Governor Kuroda’s press briefing this afternoon. The key questions there will be about his recent comments about starting to think about exiting from stimulus around next year.

    Of course, do not forget, The BOJ’s purchases of exchange-traded funds have helped boost Japanese stocks. Bloomberg’s Min Jeong Lee and Nobuyuki Akama show the effects on the Nikkei 225 Stock Average against a history of the BOJ’s ETF buying.

     

    Nikkei 225 jumped after-hours on the back of US-Korea headlines but that has all faded…

     

     

  • Baltimore Mayor Pledges 60 Taxpayer-Funded Buses To Drive Students To D.C. Gun Protest

    Kevin Rector, a crime reporter for the Baltimore Sun Newspaper, recorded Baltimore Mayor Catherine Pugh on Tuesday outside City Hall, shouting through a bullhorn to several hundred zombified students, of how she wants to provide 60 taxpayer-funded buses – to send more than 3,000 students to the March For Our Lives rally in Washington, D.C., scheduled for March 24.

    “We are providing at least 60 buses so that our students from our city can take their voices to Washington D.C. so that they can hear what we have to say,” Pugh said while standing next to the new Baltimore City Police Commissioner Darryl De Sousa. “We believe as you believe, that there should be no guns…”

    Earlier in the day, hundreds of Baltimore school students walked out of their classrooms onto the most dangerous streets in America, where the per capita homicide rate is on par with Venezuela, a country that is currently experiencing economic collapse.

    We ask the question: Why haven’t city students protested Baltimore’s out of control murders?

    The students wanted their voices heard and politicians to act regarding gun violence in schools, said WBAL Radio. The walkout is in response to the Marjory Stoneman Douglas High School in Parkland, Florida, which left seventeen people killed and seventeen more wounded, making it one of the world’s deadliest school massacres.

    “We’re trying to stop gun violence trickling down to the youth. We see gun violence not just in schools, but all over Baltimore City, and we think it really needs to stop because it’s affecting the youth a lot. So we’re here to say something because we’re not going to be silenced,” said Amee Rothman, a student organizer.

    “We all need to come together and protest, so that something can change,” said Talia Jackson, a student. “I’m marching today because I think what is happening is unacceptable and it’s very disturbing.”

    City students had no issue leaving their classrooms and walking over to City Hall. Along the way, students passed strip clubs, homeless encampments, and methadone clinics. Nevertheless, since those things are typical in Baltimore, the students blindly passed some of the real issues that are leading Maryland’s largest city towards a collapse.

    Students came well prepared. Rector, who was videotaping the underage group, said the students were chanting “This Is What Democracy Looks Like!”

    Where have we heard that before?

    Well, that phrase is part of a pool of chants that are generally shouted at Soros-funded rallies. It is still unclear who funded the student walkout, but for one thing, the school system and Mayor’s office were well informed that these students were going to walk out. Marches like these take a great deal of city planning through various government entities — regarding permits and coordination with law enforcement. To sum up, this was not a spontaneous walkout by students, it was well planned and organized through community groups working with city officials. That is undeniable…

    It is rumored that protesting will be added to Baltimore City Schools’ curriculum next semester.

    Fox News host Laura Ingraham blasts Baltimore Mayor for her decision to send 60 buses of 3,000 students to an anti-gun protest in DC on the taxpayer’s money. Throughout the interview, Ingraham confirms our thoughts of how Baltimore is on the verge of imploding, but it is evident, the mayor has other priorities…

  • Rhode Island Wants To Tax Pornography

    Authored by Simon Black via SovereignMan.com,

    The government hasn’t yet figured out how to tax having sex. But Rhode Island at least wants to tax pornography.

    Yes I’m serious.

    It starts with censorship: two Rhode Island state senators just introduced legislation that would require Internet Service Providers (ISPs) to block all “sexual content and patently offensive material.”

    We have no idea, of course, what is considered “offensive”. But in an age of cry-bullies where even the word “man” offends delicate university students, we can only imagine this covers a lot of ground.

    Rhode Islanders could then unblock this ‘offensive’ content with a written request, presentation of government-issued ID which proves they’re over the age of 18, and then making a one-time payment of $20.

    Internet Service Providers must collect the money and send it to the Rhode Island Treasury every quarter.

    Enforcing this law rests solely on the shoulders of the ISPs. If they fail to respond to reports of unblocked pornography or sexual content, they will be fined $500 for each instance.

    We can only begin to imagine what other genius ideas these politicians will come up with next.

    And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.

  • China Threatens Tariff Response That "Could Seriously Hurt The International Trade Order"

    Despite President Donald Trump’s promises to “be flexible” for “friends” of the US when considering exemptions to the steel and aluminum tariffs that the he’s planning to impose in two weeks, China – the explicit target of the taxes – and the European Union are not at all pleased – and they’re threatening retaliation, per RT.

    In a response to today’s announcement, China’s Commerce Industry urged the US to withdraw the planned-for tariffs while threatening to take “strong measures” that could “seriously hurt the international trade order.”

    Kim

    Adding insult to injury, President Trump boasted on twitter that trade wars are “good and easy to win,” triggering an outraged response from Donald Tusk, president of the European council, who responded, saying the truth is trade wars are “bad and easy to lose” and that the EU’s goal is to keep world trade alive and, if necessary, to protect Europeans  with a “proportionate response.”

     

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

     

     

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

     

    EU Trade Commissioner Cecilia Malmström said thousands of jobs would be in jeopardy because of Washington’s import tariffs. In response, Europeans have threatened to retaliate by targeting US products such as whiskey, peanut butter, orange juice and motorcycles in retaliation, a group of products that amounts to $3.5 billion in trade annually.

    Earlier in the week, China’s Foreign Minister Wang Yi warned that trade wars “harm the initiator,” according to the Guardian.

    “As for our trade frictions, history teaches that trade war is never the right solution. In a globalized world it is particularly unhelpful as it will harm the initiator as well as the target country,” China’s Foreign Minister Wang Yi said.

    “Given today’s globalization, choosing a trade war is a mistaken prescription. The outcome will only be harmful,” he added on the sidelines of an annual meeting of the national parliament. “China would have to make a justified and necessary response.”

    Beijing said nothing about how, exactly, it would retaliate for curbing its metals trade with the US, but, as RT reports, US products like soybeans, aircraft and cars present likely targets for counter-tariffs. However, China has previously used its economic heft to punish US allies. Last year, China lashed out at the South Korean tourism and retail industries after Seoul agreed to host American anti-ballistic missiles on its territory, a move that Beijing described as a threat to its national security.

    While the US only imports a small percentage of its steel from China (if one looks at the official data), the country’s rapid growth and debt-fueled expansion of its industrial sector have caused a worldwide glut of steel thanks to trans-shipping (or cheating as Navarro and Trump would say).

    South Korean officials also expressed regret at the US tariffs, adding that they would probably inhibit Korean steel exports. The US said it would make exceptions for Mexican and Canadian steel and aluminum while Nafta negotiations are ongoing…

    Steel

    The Japanese struck a more amenable tone, with Finance Minister Aso said he’d work to get Japanese companies excluded from the tariffs. Though he added that the measures are “extremely regrettable” and that they would have a “big effect” on the global economy, according to Bloomberg.

    While Trump prepares to implement the “negotiable” tariffs, plenty of Republicans, Democrats and other critics in the domestic economy are doing everything they can to kill the tariffs. Several US states are also bracing for tariffs, including Connecticut and Louisiana, which are among the states that will be hit the hardest.

    States

Digest powered by RSS Digest

Mar 08

Today’s News 8th March 2018

  • Paul Craig Roberts Fears "A Stalinist Purge In America?"

    Authored by Paul Craig Roberts,

    This year could turn out to be a defining year for the United States. It is clear that the US military/security complex and the Democratic Party aided by their media vassals intend to purge Donald Trump from the presidency. One of the open conspirators declared the other day that we have to get rid of Trump now before he wins re-election in a landslide.

    It is now a known fact that Russiagate is a conspiracy of the military/security complex, Obama regime, Democratic National Committee, and presstitute media to destroy President Trump. However, the presstitutes never present this fact to the American public. Nevertheless, a majority of Americans do not believe the Democrats and the presstitutes that Trump conspired with Putin to steal the election.

    One question before us is: Will Mueller and the Democrats succeed in purging Donald Trump, as Joseph Stalin succeed in purging Lenin’s Bolsheviks, including Nikolai Bukharin, who Lenin called “the golden boy of the revolution,” or will the Democratic Party and the presstitutes discredit themselves such that the country moves far to the right.

    Stalin didn’t need facts and could frame-up people at will as he had absolute power. In the US the presstitute media, like Stalin, does not concern itself with facts, but the presstitutes do not have absolute power. Indeed, few people trust the presstitutes, and even fewer trust Mueller.

    Many are puzzled that President Trump has not moved against his enemies as they have no evidence for their charges. Indeed, Mueller’s indictments have nothing whatsoever to do with the Russiagate accusations. Why are not Mueller, Comey, Rosenstein, and all the rest indicted for their clear and obvious crimes?

    America’s future turns on the answer to this question.

    Is it because the Trump regime is letting the presstitutes and the Democrats destroy their credibility, or is it because Trump is weak, confused, and doesn’t know how to use the powers of his office to slay those who intend to slay him?

    If it is the former, then America will move far to the right.

    If it is the latter, America will have had its own Stalinist purge, and the purge is likely to follow the Stalin model and to extend down to those who voted for Trump.

    The failure of the integrity of the liberal/progressive/left has left the US facing two unpalatable outcomes. One is a right-wing government empowered by the left’s self-defeat. The other is the rise of the Identity Politics state in which oppression will be based on gender, race, and beliefs.

    This is not the only issue that could be resolved in 2018. There are others, and the other two major ones are the economic situation and the military situation.

    For a decade the central banks of the West and Japan have printed money far in excess of the increase in real goods and services. This money printing has not caused massive inflation of consumer prices. Instead it has caused inflation in financial instruments and real estate.

    The high Dow Jones average is the product of this money printing. Can the central banks stop printing money and allow interest rates to rise, thus collapsing equity prices and pension funds? What would be the consequences?

    Militarily, since World War II Washington has relied on its armed predominance to dictate to the world. But now the President of Russia has announced possession of what are from the US perspective super weapons that do not, as some claim, give Russia parity with the US, but give Russia immense military superiority over the US, indeed over the entire Western alliance.

    Russia’s capability, which the US has no chance of matching any time soon, means that Washington’s policy of intimidation has no chance of intimidating Russia. If Washington’s policy toward Russia continues in a hostile demeanor, Russia is likely to kick Washington’s teeth out.

    The cat has been belled. America is no longer “the sole superpower.” It is a second-rate power whose hubris is likely to do it in. Will it happen in 2018?

    *  *  *

    If you continue to support his website, you will continue to receive honest analysis of our dangerous times. Paul Craig Roberts’ website is your portal on reality. There is no reality in the presstitute media or in the voices in Washington except the reality of the special interests who rule you for their own gain. Stand up for the truth. Donate here: https://www.paulcraigroberts.org/pages/donate/

  • Meet The 'Man' Who Crashed Bitcoin In 2018

    Bitcoin’s Tokyo Whale (not to be confused with that Tokyo Whale) revealed on Wednesday that he has sold off about $400 million in bitcoin and bitcoin cash since late September.

    Nobuaki Kobayashi, bankruptcy trustee for Mt. Gox, the largest bitcoin exchange in the world before hackers absconded with tens of thousands of customers’ bitcoins worth billions at recent prices, said he started selling in late September, meaning it’s quite possible he sold at least some of the coins at the highs reached toward the end of last year.

    Kobayashi made his disclosure in the report from the 10th creditors’ meeting, which took place Wednesday.

    In the report, he said he’d started selling off the bitcoin and bitcoin cash to raise money for disbursements that the trustee will soon need to begin making as bankruptcy claims are being evaluated, per Bloomberg.

    Which brings us to the crash of Bitcoin from December 2017 through February 2018.

    Matt Odell (@Matt_Odell) presents the full list of transfers out of their wallet.

    h/t @alistairmilne

    As Odell points out “More than half of the bitcoin they sold (18k btc) was transferred to an exchange on Feb 5th. The day before bitcoin hit its 3 month low of ~$6000. They panicked and sold the bottom. Market absorbed it well.”

    This is what Kobayashi’s “sells” look like on the chart of Bitcoin…

    Odell explains “The arrows on the chart above mark the dates of each Gox wallet transfer. Worth noting, these aren’t the dates of the sales, those most likely happened right after, these are the dates of the transfers to the exchange.“

    So that explains – or reveals – the mysterious man on the offer-side of Bitcoin for two months.

    Still, Bloomberg reports that Kobayashi is sitting on another approximately $1.9 billion, which he says he plans to offload soon…

    *  *  *

    Notably, buried deep in the report, Kobayashi disclosed that he’s asked US prosecutors for more information about the arrest of Alexander Vinnik, a Russian national who was charged with laundering $4 billion in stolen Mt. Gox profits through his old exchange, BTC-e.

    It’s unclear whether Kobayashi is planning on trying to recover some of these funds…

    Read the full report below:

    2018.03.07mtgox by Anonymous JJ6eerL on Scribd

     

     

  • Stockman Celebrates The End Of The Goldman Sachs Regency At The White House

    Authored by David Stockman via Contra Corner blog,

    The financial commentariat and the robo-machines are all in a tizzy this morning because Gary Cohn up and quit. But we say good riddance: The man gave Trump bad advice on nearly every single issue—trade, taxes, fiscal policy and the Fed.

    We didn’t make any bones about that viewpoint during our appearance on Fox Business this AM. When Maria Bartiromo asked us about Cohn’s departure, our reply was: Hallelujah, the Goldman Sachs Regency in the White House is finally over!

    The fact is, we do have a trade crisis, but Gary Cohn and the Wall Street pseudo-free traders don’t care and never have. That’s because they fiercely support a perverted, self-serving monetary regime that systematically and massively inflates financial assets, even as it strip mines and deflates the main street economy.

    As we have been pointing out in this series, there is a perverse symbiosis between the Fed and the Dirty Float central banks of the 10 major countries (China, Vietnam, Mexico, Japan, etc), which account for 90% of the nation’s $810 billion trade deficit (2017). Together they have ripped the guts out of the US industrial economy—effectively sending jobs and production abroad and cash flow and liquidated capital to Wall Street.

    For its part, the Fed has monkey-hammered US competitiveness. That’s the result of its insensible 2.00% inflation policy, which has fatally inflated nominal dollar wages in a world market drowning in cheap labor priced in artificially under-valued currencies.

    At the same time, its massive interest rate repression and price-keeping operations in the stock market have turned the C-suites of corporate America into financial engineering joints. So doing, they have slashed real net business investment by nearly 3o% since the turn of the century, by 20% from the 2007 pre-crisis peak and, actually, to a level in 2016 that barely exceeded real net investment two decades earlier in 1997.

    Meanwhile, the C-suites shuttled upwards of $15 trillion of cash flow and debt capacity during the last decade alone into stock buybacks, vanity M&A deals and excess dividends and recaps. As we said in today’s Fox interview, America’s business leaders will not stop strip-mining their companies in order to juice Wall Street and goose their own stock options until they are taken to the woodshed by a stern task-master at the Fed.

    By that we mean a central bank that is willing to get out of the financial asset price propping and pegging business, and to thereby permit the kind of stock market collapse that would finally expose the folly of  corporate America’s endless financial engineering. Indeed, at this point nothing else will stop them except being run out of their jobs for massive dissipation of corporate resources and piling their balance sheets high with unproductive debt.

    Yet until there is a clean sweep at the Fed and a purging of today’s crop of financial engineers and speculators from the C-suites, there is no possible way to reverse the nation’s faltering trade accounts. Doing so would require a major revival of investment in facilities, equipment, technology, people and business innovation that simply isn’t in the cards in today’s casino.

    Yesterday we mentioned that the US has incurred a massive and widening trade deficit for 43 years running, and that the cumulative shortfall totals $15 trillion. But much of that reflects long-ago dollars that have since been inflated away by the Fed’s relentless effort to stimulate more inflation.

    Accordingly, if that 43-year string of trade deficits is re-priced in 2016 dollars of purchasing power, the horror shows is just all the more stunning. To wit, the US economy has incurred nearly $19 trillion of cumulative trade deficits since 1975 in today’s purchasing power.

    Is there any wonder that US manufacturing output is still 2.5% below its pre-crisis level of late 2007, and that total industrial production including energy, mining and utilities has barely returned to the flat line?

    In this context, one of the chief culprits responsible for those dismal results is the trillions of cheap debt-fueled M&A deals that occur annually, and which cause massive layoffs, facility closures and asset reductions in the name of short-run “synergies”.

    Of course, all of this booming M&A is supposed to represent the noble work of productivity enhancement and the efficiencies fostered by the so-called market for “corporate control”. And it would in a world of honest money and free market financial discipline.

    But just the opposite is true under the Fed’s destructive regime of financial asset inflation. Overwhelmingly, M&A has become a vanity project of empire-building boards and CEOs, who then slash investments and necessary operating costs in order to deliver paint-by-the numbers “synergies” and to service their bloated debts. In effect, they shrink the GDP, not expand it.

    Image result for images of us mergers and acquisition levels since 2000

     

    At length, of course, these so-called synergies get lost in the fog of time and new deals, even as they eventually morph into reduced capacity for long-term growth, employment, competitiveness and profits. And when M&A deals eventually fail, the mountains of goodwill created by these over-priced transactions get written off, while plants, equipment and people get “restructured” into what Wall Street is pleased to call “one-time costs” that are to be added-back to ex-items “earnings”.

    Likewise, the fetish of share-buybacks is not reflective of the free market at work, either, even as Wall Street risibly proclaims that companies are “returning capital to shareholders” because it is the “highest and best” use of available cash.

    No it’s not!

    In a technologically dynamic world where continuous heavy investment is a prime facie condition for sustainable growth, the cult of stock buybacks would better be described as the grim reaper of corporate finance. In fact, it is part and parcel of the ultra-speculative climate on Wall Street and in the corporate C-suites alike that has been fostered by the Bubble Finance policies of central bankers.

    It is now almost universally the case that scalping short-term profits and virtually overnight trading gains is what is driving the casino. So how in the world did Trump get convinced that borrowing $1.5 trillion to slash the corporate tax rate to 21% would “stimulate” anything except an orgy of stock buybacks and financial engineering?

    Indeed, if any exclamation mark was needed on the departure of Goldman’s current plenipotentiary in the White House, this morning’s announcement that February brought an all-time record of $153 billion of stock buyback announcements was surely it.

    At the current annualized run rates, stock buybacks at $800 billion plus upwards of $2 trillion of domestic M&A deals and hundreds of billions more of LBOs, leveraged recaps and special dividends will pump $3.5 trillion of cash back into the canyons of Wall Street this year.

    Did Gary Cohn explain this to the Donald?

    Nah, it was his job to make sure nothing got in the way.

    At the same time that corporate America is being strip-minded by Wall Street and the C-suites, US workers also have one foot on the banana peel of inadequate corporate investment  in productivity enhancing tools, technology and training; and one-arm tied behind their backs owing to the drastic inflation of nominal wages.

    But the latter has done nothing more than help some keep up in part or whole with the Fed’s 2.00% inflation, while relegating many others to outright jobs losses—owing to them being off-shored to the China Price for goods and the India Price for services.

    Thus, since the year 2000, nominal wages of US production and nonsupervisory workers (blue line) are up by nearly 60%, which has not helped them one bit because consumer price inflation (green line) has been nearly as high.

    Accordingly, real weekly wages of prime age male workers (orange line) have actually flat-lined for the past 17 years.

    In the interim, of course, US goods and services production has been massively off-shored. And this trend has been acutely compounded by the systematic under-valuation of currencies by the 10 great trade offenders described yesterday.

    To repeat, the US does $4 trillion of combined export and import business with the rest of the world each year. About $2 trillion of that is spread among approximately 150 countries where trade is evenly balanced as between about $1 trillion of imports and exports each.

    For the most part, the counties involved such as Canada, the UK, the Scandinavian nations, Brazil etc. have not attempted to trash their own currencies any faster than the Fed has inflated its own dollar liabilities. That means they defended themselves from the Fed’s rampant expansion of US dollar liabilities, but did not take advantage of it to justify outright exchange rate suppression and mercantilist export promotion.

    By contrast, the other $2 trillion of trade is accounted for by just 10 countries, of which China, Vietnam and Mexico account for over half. Yet among the Dirty Float Ten, US exports in 2017 amounted to only $625 billion, while imports from these countries were more than double that figure at $1.352 trillion.

    Stated differently, US exports to the Dirty Float 10 amounted to just 46% of imports from them. And that absurd imbalance is not remotely due to faltering capitalist enterprise on main street or bad trade deals made in Washington.

    To the contrary, the real US trade problem is a monetary problem that can only be cured by regime change in the Eccles Building.

    While we have little hope that this reality will ever penetrate the orange comb-over, there is still a double dose of “good news” (of sorts) in today’s contretemps.

    To wit, Gary Cohn didn’t get the Fed Chairman’s job, which would have made all of this far worse. And Goldman Sachs has finally been purged from the Oval Office.

    There’s that—and it’s at least something.

  • China Reports Outbreak Of Highly Contagious Bird Flu

    A dangerous strain of bird flu that has been circulating in 2013 could be on the verge of snowballing into a global pandemic.

    The Paris-based Organization for Animal Health said Wednesday that a farm in Shaanxi province has reported an outbreak of a highly dangerous pathogen, while a separate farm in Guangxi province has reported an outbreak of H5N6, another dangerous strain of bird flu.

    Birdflu

    The H5N6 virus killed 23,950 ducks out of a flock of 30,462 ducks, according to the Chinese Ministry of Agriculture. The remaining birds were all slaughtered..

    In Shaanxi, the H7N9 virus killed 810 layers out of a flock of 1,000 birds.

    Last year, the number of bird flu cases in China spiked as the annual outbreak was much worse than normal. It also saw the virus split into two distinct strains that are so different, they no longer respond to the same vaccines, according a Reuters report from late last year. H7N9 is becoming increasingly pathogenic, meaning it possesses the capacity to kill infected birds.

    According to the South China Morning Post, Yoshihiro Kawaoka of the University of Wisconsin and a colleagues tested a version of the new H7N9 strain taken from a person who died from their infection last spring. They found that the virus replicated efficiently in mice, ferrets and non-human primates, and that it caused even more severe disease in mice and ferrets than a low pathogenic version of the same virus that does not cause illness in birds.

    But perhaps the most disturbing aspect of the virus is its ability to spread easily from cage to cage. When placed in cages adjacent to healthy ferrets, the virus will spread easily from infected animals and health animals, suggesting the virus can be transmitted by respiratory droplets such as those produced by coughing and sneezing.

    As one expert pointed out, “the work is very concerning in terms of the implications for what H7N9 might do in the days ahead in terms of human infection,” said Michael Osterholm, an infectious disease expert from the University of Minnesota.

    Since 2013, the H7N9 bird flu virus has sickened at least 1,562 people in China and killed at least 612. Some 40 percent of people hospitalized with the virus die.

    And the number dying during each epidemic has increased dramatically in recent months.

    In the first four epidemics, the virus showed few changes. But last flu season, there were some 764 cases – nearly half of the 1,562 total.

    Which is why a new risk assessment tool from the U.S. Centers for Disease Control and Prevention ranks H7N9 as the leading animal flu strain with the potential of causing a human pandemic.

     

  • Police: We're The Experts – Don't You Dare Criticize Us

    Authored by Ryan McMaken via The Mises Institute,

    One of the most surprising developments in the wake of February’s Florida school shooting is the willingness by many generally police-friendly commentators to denounce the lack of action by local police against the shooter. 

    From National Review, to The Federalist, to Donald Trump, many of the law enforcement officers involved in the shooting are being accused of outright “cowardice.” 

    Part of this is agenda-driven. The inaction on the part of law-enforcement organizations demonstrates that it is not enough to “call 911” and hope the police show up to protect the victims. As Michael Graham notes, the Florida situation is part of a “pattern of police cowardice” which was also apparent at the 2016 Orlando shooting and at the Newtown, Connecticut shooting. In both cases, police stood outside while gunmen worked freely inside the building in question. 

    Thus, if police are going to protect themselves while victims are at the mercy of gunmen, this illustrates that private gun ownership is perhaps the only reliable defense — whether in the hands of professional private security or even amateurs. Opponents of a police monopoly on gun ownership have seized upon this police failure as a helpful illustration of their position. 

    In the past, however, the right-wing’s knee-jerk tendency to always defend the police would likely have prevented much direct criticism of police agencies themselves. That reticence, however, appears to be falling away, and the cowardice of government law enforcement officials has now become become an open question. 

    Naturally, this does not bode well for the position of police agencies in the political hierarchy. Law enforcement agencies have long depended on their “hero” status as an important factor in ensuring that police organizations get whatever they want from local governments and state legislatures.

    “We’re Experts, Do What We Say”

    In response, many defenders of police have become testy and defensive, resorting to slipshod arguments that amount to little more than “you people who aren’t police should just shut up.” 

    A typical example of this can be found in USA Today where Tim Vogt, a former border patrol officer and current instructor at a “law enforcement academy,” denounces any criticism of the sheriff’s deputies involved.

    Vogt’s argument? Police should not be subject to criticism “from the unqualified and spineless peanut gallery.”

    In other words, Vogt holds that government agents are unassailable experts who ought not be forced to suffer commentary from the ignorant taxpayers who, it seems, aren’t good for much other than paying the bills for law-enforcement agencies. 

    Vogt’s article resorts to perpetuating myths about police agencies, as well. He claims that “we also take more risks than most of you choose to on a daily basis,” implying that most Americans can’t fathom the risks that police officers take. In reality, millions of Americans are employed daily in lines of work that are more dangerous than being a police officer — including truck drivers, landscape maintenance workers, farmers, roofers, and construction workers. 

    Vogt resorts to outright deception when he claims that police “risk their lives on behalf of others each day, all for a lower middle-class wage.” This is not true outside the tiniest, most rural police forces. A typical police organization pays police well above median wages, and benefits are even greater when the extremely generous police pensions are included in the calculation. Scot Peterson, the police officer that Vogt is specifically defending, was being paid double the local median income.

    This sort of lashing out, however, is nothing new for defenders of law enforcement after rank police incompetence becomes apparent. 

    In his book defending the police response to the Columbine Massacre, former SWAT officer Grant Whitus declared: “I want to say to the critics: Okay, if you think it’s so damn easy, then you go patrol a beat…I bet you wouldn’t make one day with me before you pissed yourself.”

    Alan Pendergast, in a review of Whitus’s book notes: 

    It’s a standard cop refrain: You haven’t been where I’ve been, so shut your piehole.

    Significantly, Whitus invokes the movie A Few Good Men as an illustration of how police actions should be immune to criticism. 

    In the film, when questioned about his abuse of military power, the Jack Nicholson characters screams “You can’t handle the truth!” and goes on to explain how the general public is too yellow-bellied and ignorant to understand the real threats that are out there in the world. Thus, the military, his reasoning goes, should be left unquestioned in regards to how it goes about doing its business. 

    It is not surprising that Whitus wants this same rationale to apply to police work as well. The pain-in-the-neck general public doesn’t possess the secret wisdom government agents have, so the public’s opinions are all just the idle speculations of a “worthless peanut gallery.”

    Should Police Be Immune from Political Opposition?

    In foreign and military affairs, those who want citizens and taxpayers to keep quiet and do as their told invoke the phrase “politics stop at the water’s edge.” 

    It is a sentiment often expressed by advocates for more foreign intervention and ever more taxpayer funding for military institutions. The idea is the taxpaying public is too stupid or too ignorance to have anything other than worthless opinions when it comes to military and foreign affairs beyond the borders of the United States. Modern Americans have typically caved to this bullying tactic. Writing in the 1990s, however, at the end of the Cold War, Samuel Francis noted that such an attitude is incompatible with a free society:

    The self-sufficiency, the civic independence, of the citizens of a republic, the idea that the citizens should support themselves economically, should be able to defend themselves,educate themselves, and discipline themselves, is closely connected to the idea of public virtue…A self governing people is simply too busy, as a rule, with the concerns of self-government to take much interest in other peoples’ business…A self-governing people generally abhors secrecy in government and rightly distrusts it. The only way, then, in which those intent upon…the expansion of their power over other peoples, can succeed is by diminishing the degree of self-government in their own society. They must persuade the self-governing people that there is too much self-government going around, that the people themselves simply are not smart enough or well-informed enough to deserve much say in such complicated matters as foreign policy…We hear it…every time an American President intones that “politics stop at the water’s edge.” Of course, politics do not stop at the water’s edge unless we as a people are willing to surrender a vast amount of control over what the government does in military, foreign, economic, and intelligence affairs.

    Francis’s critique applies to police matters as well, of course. Politics do not stop at the front door of the police station or sheriff’s office unless we are “willing to surrender a vast amount” of citizen control over what the government does to us. 

    Many Americans are willing to surrender their civic responsibility to others, though. Francis contends that the modern American government relies heavily on citizen deference to the state’s “incumbent managerial elite.” This elite asserts it deserves a special exalted status above the taxpayers because the elites are, well, elites. And they know best. 

    This is the same claim now being made by current defenders of the police. 

    Deference to the “experts” in police and military organizations, however, has not always been a given in America.

    Indeed, among citizens in the nineteenth century, it was considered unbecoming to step aside and allow government agents to set the terms of national defense and public safety. 

    In the nineteenth century, critics of excessive deference to state “expertise” on matters of keeping the peace spoke in terms of “manliness” in resisting usurpation of privately-supplied community order. This measure of things never quite went away, although now the bravado comes largely from defenders of government agents. Thus, we see that critics of police are denounced as “spineless” nobodies who will “piss themselves” if faced with the dangers police face. On the surface, the debate is about courage, but the subtext behind apologists like Whitus and Vogt is one of “we’re real men, and the rest of you aren’t.” 

    Indeed, how voting citizens — all of whom were men through most of the nineteenth century — viewed themselves in relation to government agents with guns varied in earlier eras.  As noted by Bret Carroll in American Masculinities: a Historical Encyclopedia, deference toward military power “clash[ed] with the equally masculine virtues of independence and individualism.” The ideal citizen was a “citizen-soldier who was a frontiersman, a yeoman farmer, or a shopkeeper.”2 

    Standing armies were viewed with “suspicion,” and much of this grew out of ideas passed down from Revolution-era opposition to occupying British soldiers who were seen as being of “low moral character.” 

    It was only after the Civil War, Carroll notes, that the very large numbers of veterans in the general population began to create a “mystique” around military service, and to encourage a culture that “glorified military service” above activities in the private sector.  

    Because law enforcement agencies in their modern form were extremely rare in the US before the late nineteenth century, the functions of police were also largely viewed as a matter of private self-defense, and not a matter for “experts” who were to be unquestioned by the general public. 

    Today, the language of “manliness” or “virtue” has been replaced by the language of “expertise.” And, from the government’s point of view, expertise is even better as a standard of police and military power because it can be readily used to exclude all outsiders from exercising influence over internal government matters. 

    The attempt at having the experts take over, of course, has not been totally successful. There is still a well-established tradition in the United States of civilian oversight for military affairs, and non-police oversight for law-enforcement. County sheriffs are subject to voters and police forces are subject to civilian mayors and city councils. 

    Nevertheless, the claim that critics of police inaction are part of a unqualified “peanut gallery” has been successful for decades. It is an indication of a cowed and passive citizenry, but we may be finally witnessing some pushback from the non-experts who aren’t buying the pro-government myths any longer. 

  • ECB Preview: Draghi Set To "Avoid Any Sudden Moves" But Watch Forward Guidance

    Recent news events, including an anti-establishment surge in Italy, and President Trump’s tariff tirade, underpin the argument for Mario Draghi to avoid any sudden moves in tomorrow’s ECB statement and press conference.

    “Draghi is likely to err on the side of caution at the meeting of the Governing Council on March 8. The next major change to forward guidance probably won’t materialize until June — only concessionary tweaks are likely this month.” -David Powell and Jamie Murray, Bloomberg Economics

    With the euro having traded somewhat sideways for a month as most of the European equity markets collapsed, analysts suggest that Draghi may take his currency-strength-jawboning foot off the pedal and tweak forward guidance estimates to signal the beginning of the end for easing.

    SocGen’s Kit Juckes pointed out, “If we get a slight language tweak on Thursday and a drop in average hourly wage growth in the U.S., we’ll be above $1.25 by the weekend.”

    As Ransquawk notes, last time round, the central bank refrained from providing much of a blueprint as to how they intend to unwind their current stimulus program after its current end-date of September with Draghi stating that no discussion took place with regards to tapering. When asked about EUR appreciation, Draghi stated that it was a source of uncertainty and it is too early to say whether FX moves have had a pass-through effect.

    ECB JANUARY MINUTES: The highlights from the January minutes saw policymakers state that changes in communications were viewed as premature with some expressing the preference for dropping their current easing bias.

    SOURCE REPORTS: In the immediate aftermath of the previous meeting, source reports revealed that ECB rate setters were split about the next move as the Euro’s rise complicates the outlook. Thereafter, further reports suggested that the Bank’s PSPP will conclude with a short taper and some officials want clearer guidance on interest rate hikes. However, the most pertinent of the sources for the March meeting came last week with ECB policymakers seen to be unlikely to signal a policy shift this time round but could discuss a dropping of their current easing bias. 

    ECB RHETORIC: Perhaps the most significant recent contribution from ECB policymakers came from ECB’s Coeure who noted the ECB might end its net purchases even before it can see a sustained rise in inflation. However, this is likely to be more relevant for meetings later in the year than this time round. Elsewhere, Draghi highlighted last week that inflation is yet to show more convincing signs of sustained upward adjustment while the Euro area economy is expanding robustly.

    DATA: From a growth perspective, Q4 GDP figures printed at 0.6% and thus in-line with the Bank’s current forecasts. On the inflation front, prelim Eurozone CPI slipped to 1.2% from 1.3% during the month of February with core measures still uninspiring. However, prospects for wage growth will likely appease some policy makers. Elsewhere, survey data via Markit saw the EZ composite figure slip to 57.1 from Jan’s 58.8 but remains firm by historical standards nonetheless.

    Ransquawk points out that potential adjustments to the forward guidance are as follows:

    RATES: No adjustment expected on this front until details of the curtailing of asset purchases have been announced later in the year. N.b., at the previous meeting Draghi stated that he sees “very little chance” that the ECB will raise interest rates this year.

    ASSET PURCHASES: As revealed by the latest ECB source reports, a discussion around dropping the easing bias for asset purchases is expected to take place. After the notion being rejected by policymakers in January on the basis that fundamentals had not changed enough to warrant such an adjustment, this meeting might be too soon for consensus at the Bank to adopt such a change in communication. Note, consensus before the source reports suggested that this will not be actioned by the bank until June with the Bank to not reveal their method of curtailing bond purchases until the following meeting in July.

    GROWTH: No adjustment expected on this front.

    INFLATION: No adjustment expected on this front.

    And here is what to watch out for…

    ECB STAFF PROJECTIONS: Changes are widely expected to be particularly minor/non-existent with information since the previous forecasts unlikely to provide much incentive for the Bank to make any major adjustments.

    From a growth perspective, Pictet suggest that there is some minor upside risk to the 2018 forecast but ultimately any changes are likely to be tweaks rather than the mass adjustments seen in December. On the inflation front, the firmer EUR is set to negate any upside pressure from the climb in oil prices and upside in food prices. However, BAML believe that 2018 inflation could see a minor nudge higher on the basis that the Dec projections were too soft at the time. See below for the December projections.  

    PRESS CONFERENCE: Ultimately, aside from the macroeconomic projections and potential tweaks to the introductory statement, this week’s press conference could be one of the more uneventful presentations by the ECB President with Draghi set to ‘kick the can down the road’ on unveiling any major clues as to how and when the ECB will conclude their asset purchase programme. 

    In terms of subjects the ECB President will likely be quizzed on by journalists, aside from the future path of the PSPP, Draghi will likely be questioned on the ECB’s view of ‘trade wars’ during the Q&A after the recently announced measures by US President Trump. This comes in the context of the ECB Jan minutes stating that “…the balance of risks to the global economic expansion was considered to remain tilted to the downside… uncertainty regarding the policy outlook in some major economies, including the risk of an increase in trade protectionism, continued to constitute downside risks.” However, as if often the case with Draghi it is likely that he will adopt a non-committal tone and state that the ECB are monitoring events abroad.

    As far as other political issues are concerned, Sunday’s inconclusive Italian election result will also likely be a talking point given the success of the populist ‘anti-Euro’ parties. However, both the Northern League and MS5 have scaled back their desire for a EUR-referendum with the leader of the former stating that a vote on the issue would be ‘unthinkable’. That’s not to say that both parties (should they obtain power) wouldn’t opt for reform of the Euro-area but it is unlikely to impact the ECB’s thought process at this stage with the matter currently more of an issue for domestic Italian assets. 

    There’s also a possibility that Draghi will be asked about the Bank’s view on the EUR exchange rate given how much of a focus it was last time round. However, since then, the EUR has seen little deviation from Jan levels on a trade-weighted basis and as such, Draghi may opt to reiterate his previous stance of labelling it as “a source of uncertainty and it is too early to say whether FX moves have had a pass-through effect”.

    Here is a selection of analysts’ views on bonds and the euro ahead of the meeting, via Bloomberg:

    Barclays

    Changes to forward guidance are coming but in “small doses,” strategist Cagdas Aksu writes in a note

    Sees ECB dropping the asymmetric forward guidance in QE first, coming as early as this week

    Societe Generale

    The meeting should confirm a gradual shift in the policy outlook, loosening forward guidance slightly, according to strategists including Jorge Garayo

    Remain bearish on euro rates, with the belly of the curve having further room to re-price

    NatWest Markets

    Minor alterations are in the cards for forward guidance, but base case is for no change, according to analysts including Anna Tokar

    “It appears there is little reason to disrupt the markets at the moment, when the ECB views the current pricing as fair”

    See Draghi making further mention of the strong euro in the question and answer session

    Rabobank

    “Any adjustment to the forward guidance will have a minimal impact given the market has already accepted the fact that the program will be wound down between end-September and December this year,” said strategist Matthew Cairns

    “The material lack of wage growth and still-low inflation expectations will serve to keep a lid on a sustained, significant rise in yields”

    In summary:

    • Unanimous expectations look for the ECB to leave its three key rates unchanged

    • ECB set to discuss a dropping of their current easing bias

    • Macro projections unlikely to be subject to major revisions

    And finally here is ING’s guide to trading tomorrow’s ECB meeting…

  • Trump Trade Wars Are A Perfect Smokescreen For A Market Crash

    Authored by Brandon Smith via Alt-Market.com,

    First, I would like to say that the timing of Donald Trump’s announcement on expansive trade tariffs is unusual if not impeccable.

    I say this only IF Trump’s plan was to benefit establishment globalists by giving them perfect cover for their continued demolition of the market bubbles that they have engineered since the crash of 2008.

    If this was not his plan, then I am a bit bewildered by what he hopes to accomplish. It is certainly not the end of trade deficits and the return of American industry. But let’s explore the situation for a moment…

    Trump is in my view a modern day Herbert Hoover. One of Hoover’s first actions as president in response to fiscal tensions of 1929 was to support increased tax cuts, primarily for corporations (this was then followed in 1932 by extensive tax increases in the midst of the depression, so let’s see what Trump does in the next couple of years).  Then, he instituted tariffs through the Smoot-Hawley Act.  His hyperfocus on massive infrastructure spending resulted in U.S. debt expansion and did nothing to dig the U.S. out of its unemployment abyss. In fact, infrastructure projects like the Hoover Dam, which were launched in 1931, were not paid off for over 50 years. Hoover oversaw the beginning of the Great Depression and ended up as a single-term Republican president who paved the way socially for Franklin D. Roosevelt, an essential communist and perhaps the worst president in American history.

    This is not to say Hoover was responsible for the Great Depression.  That distinction goes to the Federal Reserve, which had artificially lowered interest rates and then suddenly raised them going into the economic downturn causing an aggressive bubble implosion (just like the central bank is doing right now).  But Hoover did actually aid the Fed in their undermining of economic stability by pursuing policies which were poorly timed.

    I’m hitting readers with all of this because I am growing rather tired of the contingent of Trump apologists in the liberty movement scrambling to defend every single Trump action no matter how illogical. These people should know better.  Sorry, but Trump is not “playing 4D chess” against the globalists.  His primary initiatives have only served so far to create a useful distraction away from the globalists.

    The disturbing key to all of this is the fact that many of Trump’s policies are things that I and many others have argued for in the past. The problem is, he is implementing them out of order and with bad timing, which will only make such policies appear destructive in the end, rather than constructive.

    In terms of the implementation of tariffs, the people who are defending this action at this time do not seem to understand the basics of international trade. Tariffs can only be enacted from a position of economic strength and resource development. This strength comes from internal self-sufficiency in production; meaning, in order for the U.S. to force a trade balance (which is what tariffs are supposed to do) the U.S. must have a strong industrial base and MUST be capable of producing most if not all necessary goods and goods in broad demand.

    The fact is, U.S. manufacturing has been utterly outsourced by the very corporations Trump just gave a 10% tax cut to, and rebuilding that industrial base would take decades. Why? Because there are no incentives for corporations to bring manufacturing back.

    As I already stated, Trump is instituting potentially solid policies but he is doing so out of order. Tax cuts for corporations should have been enacted only as an incentive for manufacturing jobs to be returned to America. Instead, corporations got tax cuts for absolutely nothing. And will those tax cuts go towards more jobs or innovation? Nope. They will be going to pay off unprecedented corporate debts, and stock buybacks, most of which were accrued through borrowing from the Federal Reserve.

    Will this stock buyback bonanza even generate new highs in the Dow? Probably not. But I’ll explain why that is later.

    If Trump had given tax incentives for corporations to bring manufacturing back into the U.S., and then given those corporations a few years to make the shift, only then would tariffs have been an effective action. But as the situation stands now, we have minimal tangible production in this country, and, historic debts held by the same overseas competitors that Trump is now seeking to “teach a lesson.”

    Debt is the next issue which needs to be addressed before tariffs can ever be implemented in a practical way. In terms of national debt, rather than setting up a plan to reduce U.S. debt expenditures, Trump is increasing debt by reducing taxes while at the same time increasing spending. Trump did not take a hard stand on the debt ceiling debate as he originally claimed he would, and so, the debt train continues unabated.

    Who is going to purchase this debt, I wonder? Over the past several years the largest buyer of U.S. treasury debt was the Federal Reserve through fiat money creation. Now, the Fed has tapered quantitative easing and is dumping their balance sheet at a rate faster than anyone expected. The Fed is pulling the plug on its artificial support of the economy.

    The next largest buyers are major foreign central banks in countries like China, Japan and to some extent the supranational EU. If the debt buyers of last resort are now the very same countries Trump is seeking to enact tariffs over, how do you think this little theater will end? Yes, with a dump of U.S. treasury bonds and perhaps the dollar as world reserve by those nations.

    But what about the U.S. consumer? Isn’t the consumer market in America so enticing that nations like China would “never dare” dump U.S. debt or the dollar? No, not really. If we are talking about a trade “war,” then a country like China, which has a vast manufacturing base and which has also been building up its own domestic consumer market, would be willing to make the sacrifice. America would be hurt far more by the threat of debt default and the loss of the dollar’s international buying power than China ever would be by the loss of American consumers.  With tariffs being implemented, they may lose the American consumer anyway.

    Our retail market is hardly as appetizing as it was 10 years ago given the decade of drudgery Americans have endured, with the largest number ever of working age citizens no longer participating in the jobs market, as well as real worker wages in continued decline while the American consumer is now more indebted than at any other time in history.

    All of these negative effects are weighing down our economy while the Federal Reserve is quickly deflating the fraudulent markets that the establishment used during the Obama administration to argue that America was “in recovery.” Of course, alternative economists have known since the beginning that this was a lie, and that the only thing propping up the economy and stock markets was central bank manipulation.

    The Fed under Jerome Powell has made it crystal clear that they WILL be raising interest rates and cutting the Fed balance sheet, perhaps more than their dot plots had indicated in the past. Without low rates and a steadily rising balance sheet we have already seen the results. Stocks in particular have gone crazy compared to the past few years, dumping nearly 10% one week, spiking about half that the next week. One thing is certain, the supposedly endless bull market induced by the Fed years ago is now over. Stocks are in heart attack mode.

    It is no coincidence that the first two times the Fed reduced its balance sheet the Dow plunged over 1,000 points. The latest dump of $23 billion at the end of February resulted in a drop of around 1,500 points. It is too early in this process to know what the trend will be, but it seems to me that stocks are being steam valved down every month. With a marked decline just after a balance sheet dump, followed by a less impressive dead cat bounce the week after.

    In the meantime, Trump’s “trade war” is now being blamed in the mainstream for the decline in stocks that the Fed is actually responsible for. As I have always said, Trump is the ideal scapegoat for the inevitable economic crisis the central bankers have staged.  Trump’s tariffs might exacerbate the problem, just as Hoover’s policies did in the beginning of the Great Depression, but the blame rests squarely on the Federal Reserve and central banks around the world.  Will the average person understand this dynamic once the dust settles on our financial system?  Probably not.

    So, to summarize, while Trump has indeed set in motion policies that conservatives in general tend to approve of, he has done so in an impractical way that will ultimately be blamed for a market crash the Fed created.  If conservative ideals such as limited government and sovereign trade protection get the blame for an unprecedented economic crisis then this could sabotage conservatism for generations to come.  If elections are still even a factor as this crisis unfolds, the chances of the public accepting a socialistic nightmare regime after Trump exits the White House are high. And, the banking elites that conjured the whole mess will escape once again without any punishment.

    The question we must ask is this – Is Trump aware that his policies are creating a perfect distraction for those same banking elites? I believe we will know for certain the answer to that before 2018 is over.

    *  *  *

    If you would like to support the publishing of articles like the one you have just read, visit our donations page here.  We greatly appreciate your patronage.

  • John Kerry, State Dept In Crosshairs As House Intel Committee Enters "Phase Two" Of Investigation

    The House Select Committee on Intelligence has John Kerry in its crosshairs – as Congressional investigators explore what involvement, if any, the former Secretary of State had in the unverified “Steele dossier” which relied on intelligence from high level Kremlin officials at a time when US-Russia relations were deteriorating.

    Assembled by former British spy Christopher Steele, the “dossier” is actually a collection of memos which contain both wildly salacious claims and loosely factual information – much of it based on hearsay or public knowledge. 

    Steele was paid $168,000 by opposition research firm Fusion GPS, while Fusion was funded by the DNC and the Clinton campaign. The FBI, however, had previously agreed to pay Steele $50,000 if he could verify the dossier’s claims – which he was unable to do. 

    Still, the FBI used Steele’s dossier – a collection of 17 memos, in their application for a FISA warrant to spy on Trump advisor Carter Page – and via “unmasking,” his associates.

    After the House Intel Committee majority released their four-page “FISA memo” detailing how senior officials at the FBI and DOJ used the unverified and highly biased Steele dossier to obtain a FISA warant, and the House Intel Committee minority released their own “counter memo,” the investigation moved into Phase II. 

    Phase II

    House Intel Committee chair Devin Nunes (R-CA) gave us a peek behind the curtain in early February, telling Fox’s Bret Baier “We are in the middle of what I call phase two of our investigation, which involves other departments, specifically the State Department and some of the involvement that they had in this.” 

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

    While it is unclear what role the State Department may have in surveillance abuses, the Washington Examiner‘s Byron York noted last month that former MI6 spy, Christopher Steele, was “well-connected with the Obama State Department,” according to the book Collusion: Secret meetings, dirty money, and how Russia helped Donald Trump win” written by The Guardian correspondent Luke Harding.

    Harding notes that Steele’s work during the World Cup soccer corruption investigation earned the trust of both the FBI and the State Department: 

    The [soccer] episode burnished Steele’s reputation inside the U.S. intelligence community and the FBI. Here was a pro, a well-connected Brit, who understood Russian espionage and its subterranean tricks. Steele was regarded as credible. Between 2014 and 2016, Steele authored more than a hundred reports on Russia and Ukraine. These were written for a private client but shared widely within the State Department and sent up to Secretary of State John Kerry and to Assistant Secretary of State Victoria Nuland, who was in charge of the U.S. response to the Ukraine crisis.

    Shedding more light on the subject is longtime Kerry colleague and Steele pal, Jonathan Winer – who penned a Feb. 8 op-ed in the Washington Post entitled “Devin Nunes is investigating me: Here’s the Truth”

    From Winer – along with a Senate Judiciary Committee criminal referral of Christopher Steele – we learned that several Clinton allies were also connected to both the dossier and the Kerry State Department. 

    Winer notes that “in late September [2016], I spoke with an old friend, Sidney Blumenthal, whom I met 30 years ago when I was investigating the Iran-contra affair for then-Sen. Kerry and Blumenthal was a reporter at The Post. At the time, Russian hacking was at the front and center in the 2016 presidential campaign. The emails of Blumenthal, who had a long association with Bill and Hillary Clinton, had been hacked in 2013 through a Russian server.

    While talking about that hacking, Blumenthal and I discussed Steele’s reports. He showed me notes gathered by a journalist I did not know, Cody Shearer, that alleged the Russians had compromising information on Trump of a sexual and financial nature.”

    Winer also describes a meeting with Christopher Steele during which he learned that Steele’s sources were pointing to collusion between Trump associates and the Kremlin – which also allegedly hacked the DNC.

    In September 2016, Steele and I met in Washington and discussed the information now known as the “dossier.” Steele’s sources suggested that the Kremlin not only had been behind the hacking of the Democratic National Committee and the Hillary Clinton campaign but also had compromised Trump and developed ties with his associates and campaign.

    Winer’s op-ed corroborates the series of events outlined in a criminal referral for Steele issued by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and Lindsey Graham (R-SC), which asks the DOJ to investigate Steele for allegedly lying to the FBI about his contacts with the media. 

    Winer gives Blumenthal’s memos to Steele…

    While we’ve known for a while that Steele used Kremlin officials for information contained in the infamous “Steele dossier,” Winer’s op-ed reveals that he gave Steele memos from Clinton operative Sydney Blumenthal – which originalted with Clinton “hatchet man” Cody Shearer. 

    Winer claims he didn’t think Steele would share the Clinton-sourced information with anyone else in the government.

    “But I learned later that Steele did share them — with the FBI, after the FBI asked him to provide everything he had on allegations relating to Trump, his campaign and Russian interference in U.S. elections,” Winer writes. 

    Deeper Kerry Connections

    As Journalist Sara Carter notes, “Also in September, 2016 Steele briefed Winer on the dossier at a Washington Hotel, according to an expose recently published in The New Yorker. Winer prepared his summary and shared it with former Assistant Secretary for European and Eurasian Affairs Victoria Nuland and Jon Finer, who was then chief of staff Kerry. Kerry was then briefed by Finer several days later, according to the report. 

     

  • Northeastern Study: Schools Safer Than In '90s, Shootings "Not An Epidemic"

    Authored by Barry Donegan via TruthInMedia.com,

    Northeastern researchers James Alan Fox and Emma Fridel released a new study claiming that mass school shootings are not on the rise, that mass shootings are happening at a historically typical pace, and that shooting deaths in schools have been on the decline since peaking in the 1990s.

    The study entitled “The Three R’s of School Shootings: Risk, Readiness, and Response” by Lipman Family Professor of Criminology, Law, and Public Policy James Alan Fox and doctoral student Emma Fridel, which is set to be published in The Wiley Handbook on Violence in Education: Forms, Factors, and Preventions in June of 2018, compiled data on school shootings from USA Today, the FBI’s Supplementary Homicide Report, Congressional Research Service, Gun Violence Archive, Stanford Geospatial Center and Stanford Libraries, Everytown for Gun Safety, a Mother Jones compilation of shooting statistics, and an NYPD active shooters report.

    While each of those reports define a mass and school shooting differently, Fox said that according to his examination of the totality of the data, since 1996, 16 multiple-victim shootings have taken place in schools, defined as shooting incidents in which there were 4 or more victims and at least 2 fatalities excluding the perpetrator. Fox defined 8 of those shootings, involving deaths of 4 or more victims excluding the perpetrator, as mass shootings, which mirrors the 1980s FBI definition of mass murder, The Washington Post noted.

    Fox also said that, including school shootings below the threshold of a mass shooting, four times as many children were fatally shot in schools in the 1990s compared to the present day. He also added that an average of 10 students per year die to gunfire in schools in the United States, meaning that bicycle accidents and pool drownings are significantly greater threats to the lives of schoolchildren.

    source: Northeastern University

    “There is not an epidemic of school shootings,” said Fox.

    Incidentally, Professor Fox is a supporter of gun control legislation and said that he believes that banning bump stocks and raising the legal age to purchase tactical rifles from 18 to 21 could help reduce overall gun crime. However, he claimed that these policy changes would do little to impact mass shootings.

    “The thing to remember is that these are extremely rare events, and no matter what you can come up with to prevent it, the shooter will have a workaround,” he said. Fox also noted that there have only been five times in the past 35 years in which a person between the ages of 18 and 20 used a tactical rifle along the lines of an AR-15 to carry out a mass shooting.

    Fox slammed the idea of arming teachers, calling it “absurd” and said, “I’m not a big fan of making schools look like fortresses, because they send a message to kids that the bad guy is coming for you—if we’re surrounding you with security, you must have a bull’s-eye on your back. That can actually instill fear, not relieve it.”

    Emma Fridel pointed out that many security policies aimed at stopping mass shootings have been ineffective. She said that mass shooting drills have not been shown to work in studies and that students find them traumatizing. She also noted that many mass shootings have taken place at schools with metal detectors and other security precautions, as shooters have found ways around them, such as targeting students outside during fire drills or ambushing security guards at the front door to gain entry.

    “These measures just serve to alarm students and make them think it’s something that’s common,” Fridel claimed.

Digest powered by RSS Digest

Mar 07

Today’s News 7th March 2018

  • World's Largest Crypto Exchanges Are Raking In $3M A Day

    It doesn’t matter whether the price of bitcoin (or any other cryptocurrency) is rising or falling. The exchanges that execute the bulk of global crypto transactions are winning either way.

    As Bloomberg points out, while investors have fixated on the massive price appreciation across cryptocurrency pairs, in reality, it’s the exchanges that are pulling in the real money. The largest exchanges are generating as much as $3 million a day in fees – an amount that could eventually reach more than $1 billion for the year.

    And that’s using the lowest range of the fee scale…

    “The exchanges and transaction processors are the biggest winners in the space because they’re allowing people to transact and participate in this burgeoning sector,” said Gil Luria, an equity analyst at D.A. Davidson & Co, who reviewed the methodology for the revenue estimates.

    “There’s a big business there and it would not surprise me if they’re making hundreds of millions of dollars in revenue and possibly even billions a year.”

    Tokyo-based Binance, which has a reputation for listing almost every ICO, and Hong Kong-based OKEx are handling the largest volume of trading, equal to about $1.7 billion daily. Based on fees of 0.2 percent, which are higher than OKEx’s 0.07 percent for the most active traders, Binance is probably bringing in the most cash. Binance, which first launched in July, has experienced growth that’s unprecedented, even for the world of cryptocurrencies.

    Huobi, Bitfinex, Upbit and Bithumb, all of which are also based in Asia, are next in the rankings. These exchanges process between $600 million and $1.4 billion of trading volume and charge fees of 0.3 percent on average.

    Crypto

    More than half of the crypto currency trading happens on Asia-based exchanges, according to data compiled by smart contract platform Aelf. “They don’t make users go through the know-your-customer process until withdrawal,” Slaughter said. “It’s a complicated process. You can lose customers in the two or four hours that it takes. In Binance, you can go from not having an account to having funds on an account in less than 20 minutes.”

    South Korean exchange Upbit, which is among the top five in trading volume, only started operating in October. It’s controlled by Dunamu Inc., which also owns Kakao Talk, the most popular messaging app in Korea. Upbit is integrated in Kakao Talk and lists over 120 cryptocurrencies, thanks to a partnership with the US-based exchange Bittrex.

    All of the exchanges are privately held and only a few years old, which often means it’s difficult to pinpoint financial information or details about their management – and indeed, as we’ve pointed out before, some of the largest exchanges have attracted the scrutiny of regulators due to their shady business practices. HitBTC, the 10th largest, doesn’t provide any information on who runs it or where the firm is based, even as customers asked these questions on the exchange’s forum. Bit-Z, WEX and EXX, among the 20 biggest by trading volume, are some of the others that don’t provide those details either.

    However, competition from established financial institutions – like, say, Goldman Sachs –  public companies and traditional financial firms may push crypto exchanges to be more transparent and even reduce costs.

    “More conventional businesses like banks and funds are likely to acquire crypto platforms at some point to make sure they have a strategic foothold in the market,” he said. “It’s a no-brainer. Financial services is where all the real business revenue in crypto is,” said Chris Slaughter, co-founder of crypto investment platform Samsa.

  • Dictator For Life: The Rise Of The American Imperial President

    Authored by John Whitehead via The Rutherford Institute,

    I’m not a fan of Communist China.

    It’s a vicious totalitarian regime that routinely employs censorship, surveillance, and brutal police state tactics to intimidate its populace, maintain its power, and expand the largesse of its corporate elite.

    Just recently, in fact, China – an economic and political powerhouse that owns more of America’s debt than any other country and is buying up American businesses across the spectrum – announced its plan to make its president, Xi Jinping, president for life.

    President Trump jokingly thinks that’s a great idea.

    Trump thinks the idea of having a president for life is so great, in fact, that America might want to move in that direction. “Maybe we’ll have to give that a shot someday,” joked Trump.

    Here’s the thing: we already have a president for life.

    Sure, the names and faces and parties have changed over the years, but really, when you drill down under the personalities and political theater, you’ll find that the changing names and faces are merely cosmetic: no matter who sits on the throne, the office of the president of the United States has, for all intents and purposes, become a unilateral power unto itself.

    Although the Constitution invests the President with very specific, limited powers, in recent years, American presidents (Trump, Obama, Bush, Clinton, etc.) have claimed the power to completely and almost unilaterally alter the landscape of this country for good or for ill.

    The powers amassed by each successive president through the negligence of Congress and the courts—powers which add up to a toolbox of terror for an imperial ruler—empower whomever occupies the Oval Office to act as a dictator, above the law and beyond any real accountability.

    The presidency itself has become an imperial one with permanent powers.

    As law professor William P. Marshall explains, “every extraordinary use of power by one President expands the availability of executive branch power for use by future Presidents.” Moreover, it doesn’t even matter whether other presidents have chosen not to take advantage of any particular power, because “it is a President’s action in using power, rather than forsaking its use, that has the precedential significance.”

    In other words, each successive president continues to add to his office’s list of extraordinary orders and directives, expanding the reach and power of the presidency and granting him- or herself near dictatorial powers.

    So you see, we have been saddled with a “president for life”—i.e., a dictator for life—for some time now.

    This abuse of presidential powers has been going on for so long that it has become the norm, the Constitution be damned.

    The government of laws idealized by John Adams has fallen prey to a government of men.

    As a result, we no longer have a system of checks and balances.

    All of the imperial powers amassed by Barack Obama and George W. Bush—to kill American citizens without due process, to detain suspects indefinitely, to strip Americans of their citizenship rights, to carry out mass surveillance on Americans without probable cause, to suspend laws during wartime, to disregard laws with which he might disagree, to conduct secret wars and convene secret courts, to sanction torture, to sidestep the legislatures and courts with executive orders and signing statements, to direct the military to operate beyond the reach of the law, to operate a shadow government, and to act as a dictator and a tyrant, above the law and beyond any real accountability—were inherited by Donald Trump.

    These presidential powers—acquired through the use of executive orders, decrees, memorandums, proclamations, national security directives and legislative signing statements and which can be activated by any sitting president—enable past, president and future presidents to operate above the law and beyond the reach of the Constitution.

    These are the powers that will be passed along to each successive heir to the Oval Office.

    This is what you might call a stealthy, creeping, silent, slow-motion coup d’etat.

    Donald Trump has already picked up where his predecessors left off: he has continued to wage war, he has continued to federalize the police, and he operates as if the Constitution does not apply to him.

    As tempting as it may be to lay all the blame at Trump’s feet for the totalitarian state of the nation right now, remember that he didn’t create the police state.

    He merely inherited it, along with the dictatorial powers of the presidency.

    If we are to return to a constitutional presidency, we must recalibrate the balance of power.

    As I make clear in my book Battlefield America: The War on the American People, the only thing that will save us now is a concerted, collective commitment to the Constitution’s principles of limited government, a system of checks and balances, and a recognition that they—the president, Congress, the courts, the military, the police, the technocrats and plutocrats and bureaucrats—answer to and are accountable to “we the people.”

    As historian Arthur Schlesinger Jr. points out, “Holding a President to strict accountability requires, first of all, a new attitude on the part of the American people toward their Presidents, or rather a return to the more skeptical attitude of earlier times: it requires, specifically, a decline in reverence… The age of the imperial presidency has produced the idea that run-of-the-mill politicians, brought by fortuity to the White House, must be treated thereafter as if they have become superior and perhaps godlike beings.”

    Schlesinger continues:

    “If the nation wants to work its way back to a constitutional presidency, there is only one way to begin. That is by showing Presidents that, when their closest associates place themselves above the law and the Constitution, such transgressions will be not forgiven or forgotten for the sake of the presidency but exposed and punished for the sake of the presidency.”

    In other words, we’ve got to stop treating the president like a god and start making both the office of the president and the occupant play by the rules of the Constitution.

  • Teenage ISIS Supporter Arrested After Utah School Backpack Bomb Fails To Detonate

    A Utah Teenager who supports ISIS has been arrested after a backpack bomb failed to detonate at Pine View High School.

    17-year-old Jack Whalen and his friends noticed a bag near a vending machine that was “smoking and sizzling.” After administrators evacuated the school’s 1,100 students, the bomb squad moved in and determined that it contained an explosive device which had the “potential to cause significant injury or death,” according to police. 

    Student Jack Whalen and friends discovered the bomb

    “I could smell a smoke smell and my friends actually saw it before I did,” said Jack Whalen, the teen who found the bag containing a “round, really fat” canister. 

    Evacuated students wait outside

    The suspect is an ISIS-supporting male classmate enrolled in the Junior ROTC program – who admitted to another incident at a neighboring high school in which he replaced the American flag with the ISIS flag, along with graffiti saying “ISIS IS COMI–“

    Invoved in the response were the St. George Police, the Washington County Bomb Squad, Washington County Sheriff’s Deputies, a bomb-sniffing police dog named Jax and his handler, and the local FBI.

    Upon a search of the suspect’s home, Police found bombmaking materials and evidence of his support for the Islamic State.

    “Based on our investigation we can confirm this was a failed attempt to detonate a homemade explosive at the school,” police said in a statement. “It was also determined that the male had been researching information and expressing interest in ISIS and promoting the organization.”

    The suspect has been preliminarily charged with the manufacture, possession, sale, use or attempted use of a weapon of mass destruction, with more charges pending. 

    “There were several factors that came into play yesterday which led to a positive outcome,” police said in their statement. “We’d like to recognize and thank the students who notified faculty and the [school resource officer] of the suspicious backpack. Their immediate action played a large role in this incident ending with no injuries.”

    Officer Lona Trombley of the St. George Police Department issued the following statement:

    There were several factors that came into play yesterday which led to a positive outcome. First, we’d like to recognize and thank the students who notified faculty and the SRO of the suspicious backpack. Their immediate action played a large role in this incident ending with no injuries.

    Second, the School Resource Officer program which allowed an officer to immediately be on scene to access and address the situation appropriately. He was then able to call inappropriate teams, such as; the Washington County Bomb Squad and Jax, the bomb-detecting K-9 from Dixie Regional Medical Center, to identify and disarm the explosive device. We’d also like to say thank you to the Bomb Squad and to Jax and his handler for responding to the call out.

    Third, the Washington County School District, who have implemented drills to practice for incidents such as this, which led to a quick and seamless evacuation of the school.

    Finally, we’d like to thank the Washington County Sheriff’s Office and the FBI, who responded to assist with everything from the investigation itself to barricading roads.

  • Peter Strzok Ignored Evidence Of Clinton Server Breach

    FBI counterintelligence agent Peter Strzok reportedly ignored “an irregularity in the metadata” indicating that Hillary Clinton’s server may had been breached, while FBI top brass made significant edits to former Director James Comey’s statement specifically minimizing how likely it was that hostile actors had gained access.

    Sources told Fox News  that Strzok, who sent anti-Trump text messages that got him removed from the ongoing Special Counsel Robert Mueller’s Russia probe, was told about the metadata anomaly in 2016, but Strzok did not support a formal damage assessment. One source said: “Nothing happened.”

    In December, a letter from Senate Homeland Security Committee Chair Ron Johnson (R-WI) revealed that Strzok and other FBI officials effectively “decriminalized” Clinton’s behavior through a series of edits to James Comey’s original statement.

    The letter described how outgoing Deputy Director Andrew McCabe exchanged drafts of Comey’s statement with senior FBI officials, including Strzok, Strzok’s direct supervisor, E.W. “Bill” Priestap, Jonathan Moffa, and an unnamed employee from the Office of General Counsel (identified by Newsweek as DOJ Deputy General Counsel Trisha Anderson) – in a coordinated conspiracy among top FBI brass.

    It was already known that Strzok – who was demoted to the FBI’s HR department for sending anti-Trump text messages to his mistress – downgraded the language describing Clinton’s conduct from the criminal charge of “gross negligence” to “extremely careless.”

    Notably, “Gross negligence” is a legal term of art in criminal law often associated with recklessness. According to Black’s Law Dictionary, it is defined as “A severe degree of negligence taken as reckless disregard,” and “Blatant indifference to one’s legal duty, other’s safety, or their rights.” “Extremely careless,” on the other hand, is not a legal term of art.

    18 U.S. Code § 793 “Gathering, transmitting or losing defense information” specifically uses the phrase “gross negligence.” Had Comey used the phrase, he would have essentially declared that Hillary had broken the law.

    In order to justify downgrading Clinton’s behavior to “extremely careless,” however, FBI officials also needed to minimize the impact of her crimes. As revealed in the letter from Rep. Johnson, the FBI downgraded the probability that Clinton’s server was hacked by hostile actors from “reasonably likely” to “possible.” 

    “Given that combination of factors, we assess it is possible that hostile actors gained access to Secretary Clinton’s personal e-mail account,” Comey said in his statement.

    By doing so, the FBI downgraded Clinton’s negligence – thus supporting the “extremely careless” language. 

    The FBI also edited Clinton’s exoneration letter to remove a reference to the “sheer volume” of classified material on the private server, which – according to the original draft “supports an inference that the participants were grossly negligent in their handling of that information.” Furthermore, all references to the Intelligence Community’s involvement in investigating Clinton’s private email server were removed as well. 

    Director Comey’s original statement acknowledged the FBI had worked with its partners in the Intelligence Community to assess potential damage from Secretary Clinton’s use of a private email server. The original statement read: 

    W]e have done extensive work with the assistance of our colleagues elsewhere in the Intelligence Community to understand what indications there might be of compromise by hostile actors in connection with the private email operation. 

    In summary; the FBI launched an investigation into Hillary Clinton’s private server, ignored evidence it may have been hacked, downgraded the language in Comey’s draft to decriminalize her behavior, and then exonerated her by recommending the DOJ not prosecute. 

    Meanwhile, a tip submitted by an Australian diplomat tied to a major Clinton Foundation deal launched the FBI’s counterintelligence operation against the Trump campaign – initially spearheaded by the same Peter Strzok who worked so hard to get Hillary off the hook. 

    And Strzok still collects a taxpayer-funded paycheck.

  • Putin's Hypersonic Rocket Revealed To Be A Modified Iskander Ballistic Missile

    Last Thursday, Russian President Vladimir Putin used his state-of-the-nation speech to showcase six superweapons that would supposedly revolutionize the game of geopolitics for Russia, and give his country a significant military advantage over the United States. In particular, Putin revealed that Russia possesses hypersonic technologies that can render NATO’s U.S.-led missile defense system completely “useless.”

    From a national security perspective, Putin’s claims of hypersonic weapons should not be underestimated but should be analyzed in an attempt to parse fact from fiction.

    The team of analysts at The Drive precisely did that, and made several conclusions: In particular, one of the weapons Putin mentioned in his speech was an air-launched hypersonic anti-ship missile launched from a Mikoyan MiG-31 Foxhound. Upon closer examination, the Drive team found the hypersonic weapon closely resembles the Iskander short-range ballistic missile.

    Here is the video of the air-launched hypersonic missile from Putin’s speech: 

    The team even pointed out that the missile underneath the MiG-31 “doesn’t even look that highly modified, although it’s exhaust fairing, which drops off during launch, throws off the Iskander’s signature profile a bit at first glance.”

    The modern Iskander missile platform, currently deployed by the Russian military, comes in two forms — the Iskander-M short-range tactical ballistic missile and the Iskander-K cruise missile. According to the team, the Iskander-M is not an air-breathing missile, but instead has a solid state rocket fuel propulsion system. “Yet Russia claims its new hypersonic missile has a flight profile like that of a cruise missile.”

    The team then asks this question: is this missile actually an air-launched ballistic missile system?

    Putin’s air-launched hypersonic weapon is called the KH-47M2 Kinzhal. Shortly after Putin’s speech, Russia’s Aerospace Force Commander-in-Chief Sergei Surovikin described the Kinzhal’s capabilities to reporters:

    “The Kinzhal system substantially boosts the capabilities of the Russian Aerospace Force to respond to any possible act of aggression against our country and along with other strategic weapon systems will help deter possible adversaries from rushing headlong into action… The fast-speed fixed-wing carrier allows delivering a missile with unique performance characteristics to the area of its discharge within minutes. The main propulsion unit mounted on the aero-ballistic missile accelerates a warhead to hypersonic speed within seconds. The missile’s maneuvering at speeds exceeding the speed of sound by several times allows it to reliably breach all air defense and anti-ballistic missile defense systems that exist or are being developed.”

    “All the test launches of the most advanced hypersonic aero-ballistic missiles that have been conducted have ended with the accurate destruction of the designated targets. From December 1st last year, the first aviation unit armed with the Kinzhal aircraft missile system switched to accomplishing experimental and combat duty missions to practice the fundamentals of its combat use.”

    Various media outlets reported the propulsion system was “an air-breathing ramjet engine for a sustained cruise, not a rocket engine.” The analyst team hit back at them and said there is no evidence of an air-breathing ramjet engine technology on the missile, but rather, all the imagery points to “indeed an air-launched Iskander ballistic missile that may have some additional targeting capabilities, like being able to hit moving ships at sea.”

    The War Zone analysts summarize their findings and conclude: Putin’s air-launched hypersonic missile is nothing more than a modified Iskander missile. Nevertheless, Putin has leveraged existing assets turning the Iskander missile into a super missile, which should not be discounted in the national security community.

    An air-launched ballistic missile is a relevant capability that dramatically expends the reach (by roughly four times), deployability, and flexibility over existing Iskander missiles. But if this missile does indeed have anti-ship capabilities, that’s a huge leap in capability for Russia’s already incredibly dense anti-ship missile arsenal.

    According to Putin, the system is somewhat mature and has already been deployed on experimental duty to airfields in Russia’s expansive Southern Military District.

    This development will likely only increase calls for broader, more layered ballistic missile defense, not to mention the fielding of new targeting new sensors, and the distributing of some “shooter” roles to airborne systems. This includes those armed with directed energy weapons (lasers) and even very-long-range air-to-air missiles.

    The high probability that Russia has adapted their staple tactical ballistic missile system into an air-launched variant with expanded targeting capability is also a reminder that Moscow can make big and even credible capability claims by leveraging and adapting assets that they have already invested in heavily.

    Putin’s superweapons are still in the research and testing phase, with unknown timelines of deployment. Still, last week, the Russian president’s circus act rattled America’s military-industrial complex. We know that because immediately after Putin’s speech, the DARPA Director called for a press conference demanding more funding for his hypersonic programs to counter Russia.

    Unfortunately, Cold War 2.0 has already started and will likely be underway for quite some time. At least now we are beginning to get the picture of the war machines that will be fighting the next world war: hypersonic weapons, fifth-generation stealth fighters, artificial intelligence, robotic vehicles, energy weapons, and of course low yield nuclear weapons.

  • Gasparino: Sam Nunberg To "Seek Treatment" After Drunken Media Trainwreck

    After a day of bizarre interviews with the media, fired Trump campaign associate Sam Nunberg says he’s going to get help for substance abuse problems, and that he will comply with Robert Mueller’s Special Counsel.

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

    While Nunberg denied drinking to CNN’s Erin Burnett after she said she smelled alcohol on his breath, Fox Business Network’s Charlie Gasparino said Nunberg admitted to him that he had been hitting the sauce.

    “When I interviewed [Nunberg], and I interviewed him early, he admitted to me he was drinking,” Gasparino reported.

    “He’s also going to seek treatment for what ails him,” he continued. “There’s something. Drinking I believe is a big part of it and that’s what happened yesterday.”

    Gasparino also shed light on his 45-minute off-air conversation with Nunberg yesterday prior to most of his media appearances, after which he warned the other networks that the former Trump aide was inebriated. 

    “We had a debate about whether we should trust information from a man who was inebriated. In the middle of that, [Nunberg] went to the Washington Post and a series of interviews. And that’s when it went off the rails,” Gasparino said, with MSNBC’s Katy Tur being the first stop.

    “I may cut Katy Tur a break because she was the first one. But after that, you’re putting a guy on that has issues.”

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

    After an awkward appearance on CNN, host Erin Burnett wrapped up the interview by suggesting Nunberg had been drinking. 

    “We talked earlier about what people in the White House were saying about you ― talking about whether you were drinking or on drugs or whatever had happened today,” said Burnett. “Talking to you, I have smelled alcohol on your breath.”

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

    Nunberg – an early aide to the Trump campaign, was fired in 2015 over racially charged Facebook posts. While on his drunken media tour on Monday, he repeatedly said said he wouldn’t cooperate with a subpoena from Special Counsel Robert Mueller.

    //video.foxbusiness.com/v/embed.js?id=5746124958001&w=466&h=263

    Watch the latest video at video.foxbusiness.com

    “I’m not going to cooperate with Mueller. It’s a fishing expedition,” Nunberg told Bloomberg News. “They want me in there for a grand jury for testimony about Roger Stone. He didn’t do anything. What is he going to do? His investigation is BS. Trump did not collude with Putin. It’s a joke.”

  • The SPY Of Crypto? Coinbase Launches Cryptocurrency Index Fund

    Coinbase dashed the hopes of thousands of ripple investors, who’ve been holding out hope that the exchange would add the coin, when it revealed that its “major announcement” Tuesday afternoon was, in fact, the introduction of the Coinbase Index Fund, a pioneering investing vehicle that just might do to cryptocurrencies what the ETFs like the SPY did for stocks. 

    The company published the announcement on its blog:

    We’re excited to announce Coinbase Index Fund.

    Coinbase Index Fund will give investors exposure to all digital assets listed on Coinbase’s exchange, GDAX, weighted by market capitalization. If a new asset is listed on the exchange, it will be automatically added to the fund.

    Index funds have changed the way that many people think about investing. By providing diversified exposure to a broad range of assets, index funds enable investors to track the performance of an entire asset class, rather than having to select individual assets. We’re excited to give our customers the ability to invest in the potential of blockchain-based digital assets as a whole.

    Twitter users were unimpressed however because, as the company pointed out, Coinbase and associated exchange GDAX only lists four coins…

    The news had some impact on the price of cryptocurrencies, which have been slumping Tuesday, with Ripple lower and the rest bouncing marginally higher…

     

     

     

     

     

    The company didn’t offer a date for the product launch, saying only that it would be available “very, very shortly.” However, there’s a catch: the fund will only be available to accredited investors based in the US. Over time, Coinbase hopes it can expand as regulators grow more comfortable with the product. The fund will be pegged to Coinbase’s new Coinbase Index…

    Coinbase

    During an appearance on CNBC, Coinbase COO Asiff Hirji said crypto is “an asset class” and that “individual investors, they tend to trade in funds, and they tend to trade in index funds, passive investing. That’s why we’ve created the index and we’ve created the index fund to enable that.”

    Importantly, the company also said it would add more coins to its platform as it vets them and there is more “regulatory certainty.”

    “We are committed to adding more assets to the exchange. If we add an asset to the exchange, it will show up in the fund. It will be market-cap weighted. We have a framework for how that works,” Hirji said. “We’re trying to make this super simple,” he added.

    The fund is marketed toward an entry-point for folks who are new to digital tokens, or for those who want a passive investment, Coinbase product manager Reuben Bramanathan told Axios.

    The fund also has a minimum investment of $10,000 and a flat 2% fee – though there are no performance fees.

    As Axios points out, Bitwise Asset Management announced its own token-focused fund in December, raising funding from several big name VCs. Several smaller companies are also looking into building indexes and funds of their own. But Coinbase, which has more brokerage accounts than Charles Schwab thanks to last year’s rally, has the clout to become a major player quickly.

    Watch the full segment below:

    Coinbase president announces index fund, initially for accredited investors from CNBC.

     

  • How The US Establishment Lies Through Its Teeth, For War Against Russia

    Authored by Eric Zuesse via TheDuran.com,

    The same people, Republicans and Democrats, who lied through their teeth for an invasion of Iraq in 2003, are doing it again for an invasion of Russia, sometime soon, so as to ‘defend’ ‘democracy’.

    The US has by now swallowed up virtually all lands surrounding Russia, at least in Europe, the latest being Ukraine, and is placing its missiles now on and near Russia’s borders, which is to Russians like would be to Americans if Russia had swallowed up Canada and were placing its missiles there.

    But the lying holier-than-thou US Establishment accuses Russia of being ‘aggressive’ when Russia holds war-games on and near its borders in order to prepare for a US-NATO invasion, which actually looks increasingly likely to them every day — and not because of ‘Russian propaganda’, but because of the US Government’s actions.

    Hillary Clinton clearly hated Russians and wanted to start a war against Russia by establishing a no-fly zone in Russia’s ally Syria (which Russia defends while the US invades and occupies Syria) so as to shoot down Russia’s planes there, and then, when Russia shoots down US planes in retaliation, America would have its pretext for invading Russia itself ‘so as to defend democracy against Russian aggression’ — but instead, Donald Trump became elected, and he has now turned out to be almost as much of a neoconservative as she was. This displays how extreme the grip is that the neocons, the Establishment and its many minions who dominate both of the two Parties and the press, now have.

    An example of the Establishment’s holier-than-thou lies, is an article that appeared on February 22nd at the magazine, The National Interest, whose article-title is itself a marvelous deception, “Averting the US-Russia Warpath” (while the subliminal message there is: reasons why we’ll probably have to invade Russia), and whose authors are three ‘defense’ hawks, including James Northey Miller, of Harvard.

    He had been an Under Secretary of Defense during the Administration of the merely moderately neoconservative President Barack Obama — the President who in 2014 grabbed Ukraine, and who used Al Qaeda in Syria to lead ’the rebels’ there in order to try to grab Syria. (Ukraine had been friendly toward Russia and is now rabid against Russia; and Syria was and is allied with Russia; so, both of these two lands were American grabs, and the neocon Trump continues both.)

    Anyone who trusts the US Government to represent in international affairs the interests of America’s public, instead of the interests of America’s billionaires, has been deceived by the Establishment’s (the billionaires’ and their agents’) virtually all-pervasive propaganda in America, and therefore needs a lot of re-learning about US history before understanding anything about US foreign policies.

    There is very good and sound reason why around the world the United States is considered, by far, to be “the biggest threat to peace” — because it is. (The Peter Kuznick book and Oliver Stone documentary Untold History of the United States, are the best cleaner-away of ‘historical’ lies about US history from 1912 to 2012 that I know of — and the seeing or reading of that, will expose to anyone the mockery of historical truth which is represented in articles such as “Averting the US-Russia Warpath.”)

    This ordinary, and profoundly deceptive, article starts:

    FOR NEARLY twenty years following the end of the Cold War, military confrontation between the United States and the Russian Federation seemed implausible. Even during periods of tension, as during the Kosovo crisis in the late 1990s, few believed that disagreement between Washington and Moscow could lead to a serious crisis, no less war.

    Before the first decade of the new century had passed, however, Russian officials were accusing the United States of working to isolate Russia. Such apprehensions have mounted steadily in Russia in the years since. At the same time, Russian behavior, including interventions in Ukraine and Syria, military posturing and harassment in Europe, and interference in Western elections, has led many in the United States to conclude that, while a US-Russian conflict is by no means inevitable, the risk of such a confrontation is growing.

    The “Russian officials were accusing the United States,” while there was supposedly actual “Russian behavior, including interventions in Ukraine and Syria, military posturing and harassment in Europe, and interference in Western elections,” which pretexts the Establishment is now debating with itself whether that will be sufficient to ‘justify’ an American and NATO invasion, as response.

    This holier-than-thou and upside-down presumption, of Russian-government guilt and American-government innocence, is reeking throughout that pompous article; but what’s even worse is that the reality is exactly the opposite of the story-line that’s portrayed in it.

    The actual reality is: Ever since 24 February 1990, the US and its NATO allies have been pursuing secretly a continuation of the Cold War after the termination in 1991 of the Soviet Union, and of its communism, and of its counter-NATO military alliance, the Warsaw Pact; and the US plan has been to swallow up, first the former Warsaw Pact nations, and then the former nations (such as Ukraine itself) that were inside the Soviet Union itself, and then, any other foreign allies that Russia might still have (such as Syria); and, then, finally, to invade and conquer Russia itself.

    And, instead of helping those countries, the US Government has been destroying them.

    Neoconservative, holier-than-thou, lying is so widespread in America’s ‘news’media, there’s practically nothing else than such deceptions about Russia, that’s “Fit to Print” (or broadcast) in today’s United States, and this is true in the media of both Parties, not merely the Republican media, or the Democratic media. This neoconservative consensus — the bipartisan ceaseless warmongering — is driven by the military-industrial complex (MIC) profiteers, whose companies’ main market is the American and allied governments (so that in order to increase their sales, more and costlier weapons must be purchased by those governments).

    It’s the MIC-sick current style of capitalism: capitalism that’s of, by, and for, the billionaires: a fascism that’s merely called ‘democracy’. (By contrast, one area of commerce that Russia refused to privatize was its weapons-manufacturers — there aren’t any stockholders who pay politicians to increase the ‘defense’ budget: instead, the Government itself is in control over that.)

    America’s billionaires, and their many agents, are giving hypocrisy a bad name.

  • CNN Flies To Bangkok To Interview Hooker Who Claims To Know Trump's Dirty Secrets

    Over the last two weeks CNN has really outdone themselves. Not content to make national news for doxxing an elderly Florida woman and badgering her in front of her house, or sending a crew of aspiring journalists to a Russian “troll farm” to dig through their trash – the ratings-starved network has decided to go full Jerry Springer; sending a crew to Bangkok to interview a hooker, pardon a “sex coach” from Belarus who claims to be the missing link in the Trump-Russia collusion narrative due to her association with a Russian billionaire, Oleg Deripaska and Deputy Prime Minister Sergei Prikhodko.

    She’s also trying to get out of a Thai jail. 

    Anastasia Vashukevich, who describes herself as a “seductress” and a “sex coach,” was arrested after her $600/head five-day sex training seminar was raided by authorities. 

    While being carted through the Thai resort city of Pattaya in an open-air police van, Vashukevich said in a live Instagram broadcast that she has evidence of collusion between President Trump and Russians. 

    I am the only witness and the missing link in the connection between Russia and the U.S. elections – the long chain of Oleg Deripaska, Prikhodko, Manafort, and Trump,” Vashukevich said in a live Instagram broadcast on Tuesday, apparently filmed while being driven through the Thai resort city of Pattaya in an open-air police van. In exchange for help from U.S. intelligence services and a guarantee of my safety, I am prepared to provide the necessary information to America or to Europe or to the country which can buy me out of Thai prison.

    In a series of subsequent Instagram posts from jail, the prostitute better known by the alias Nasta Rybka, complained of falling ill and having “frostbitten kidneys.”

    Vashukevich made headlines last month after Russian opposition leader Alexi Navalny broadcast footage from her Instagram account from an August 2016 yacht trip with Prikhodko and Deripaska. Navalny alleged that Derpiaska had bribed Prikhodko, who is one of Russia’s most influential senior officials.

    Enter CNN

    CNN’s Ivan Watson met with Vashukevich, reporting “She described herself as a seductress. This woman claims to have evidence of Russian meddling in the U.S. election. The question, is this a desperate ploy to get out of jail, or as her friend claims, is this young woman truly in danger because she knows too much?”

    “For days several Russian friends have been held at this jail in the capital of Thailand where visitors are not allowed to bring cameras,” Watson reports.

    “I came out of this detention center. It was loud and hot and chaotic and talking through the bars she says she witnessed meetings between the Russian billionaire and three Americans who she refused to name. He claims they discussed plans to effect the U.S. elections but she wouldn’t give any further information because she fears she could be deported back to Russia.”

    More in the video below.

     

Digest powered by RSS Digest

Mar 06

Today’s News 6th March 2018

  • "My First Day As CIA Director"

    Former CIA analyst and founder of ‘Veteran Intelligence Professionals for Sanity’ Ray McGovern, in this tongue-in-cheek article, outlines steps he would take on Day One as CIA Director to get to the bottom of Russiagate.

    Via ConsortiumNews.com

    Now that I have been nominated again – this time by author Paul Craig Roberts – to be CIA director, I am preparing to hit the ground running.

    Ray McGovern

    Last time my name was offered in nomination for the position – by The Nation publisher Katrina vanden Heuvel – I did not hold my breath waiting for a call from the White House. Her nomination came in the afterglow of my fortuitous, four-minute debate with then-Defense Secretary Donald Rumsfeld, when I confronted him on his lies about the attack on Iraq, on May 4, 2006 on national TV. Since it was abundantly clear that Rumsfeld and I would not get along, I felt confident I had royally disqualified myself.

    This time around, on the off-chance I do get the nod, I have taken the time to prepare the agenda for my first few days as CIA director.

    Here’s how Day One looks so far:

    Get former National Security Agency Technical Director William Binney back to CIA to join me and the “handpicked” CIA analysts who, with other “handpicked” analysts (as described by former National Intelligence Director James Clapper on May 8, 2017) from the FBI and NSA, prepared the so-called Intelligence Community Assessment (ICA) of Jan. 6, 2017. That evidence-impoverished assessment argued the case that Russian President Vladimir Putin ordered his minions “to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton.”

    When my predecessor, CIA Director Mike Pompeo invited Binney to his office on Oct. 24, 2017 to discuss cyber-attacks, he told Pompeo that he had been fed a pack of lies on “Russian hacking” and that he could prove it. Why Pompeo left that hanging is puzzling, but I believe this is the kind of low-hanging fruit we should pick pronto.

    The low-calorie Jan. 6 ICA was clumsily cobbled together:

    “We assess with high confidence that Russian military intelligence … used the Guccifer 2.0 persona and DCLeaks.com to release US victim data obtained in cyber operations publicly and in exclusives to media outlets and relayed material to WikiLeaks.”

    Binney and other highly experienced NSA alumni, as well as other members of Veteran Intelligence Professionals for Sanity (VIPS), drawing on their intimate familiarity with how the technical systems and hacking work, have been saying for a year and a half that this CIA/FBI/NSA conclusion is a red herring, so to speak. Last summer, the results of forensic investigation enabled VIPS to apply the principles of physics and the known capacity of the internet to confirm that conclusion.

    Oddly, the FBI chose not to do forensics on the so-called “Russian hack” of the Democratic National Committee computers and, by all appearances, neither did the drafters of the ICA.

    Again, Binney says that the main conclusions he and his VIPS colleagues reached are based largely on principles of physics – simple ones like fluid dynamics. I want to hear what that’s all about, how that applies to the “Russian hack,” and hear what my own CIA analysts have to say about that.

    I will have Binney’s clearances updated to remove any unnecessary barriers to a no-holds-barred discussion at a highly classified level. After which I shall have a transcript prepared, sanitized to protect sources and methods, and promptly released to the media.

    Like Sisyphus Up the Media Mountain

    At that point things are bound to get very interesting. Far too few people realize that they get a very warped view on such issues from the New York Times. And, no doubt, it would take some time, for the Times and other outlets to get used to some candor from the CIA, instead of the far more common tendentious leaks.  In any event, we will try to speak truth to the media – as well as to power.

    I happen to share the view of the handful of my predecessor directors who believed we have an important secondary obligation to do what we possibly can to inform/educate the public as well as the rest of the government – especially on such volatile and contentious issues like “Russian hacking.”

    What troubles me greatly is that the NYT and other mainstream print and TV media seem to be bloated with the thin gruel-cum-Kool-Aid they have been slurping at our CIA trough for a year and a half; and then treating the meager fare consumed as some sort of holy sacrament. That goes in spades for media handling of the celebrated ICA of Jan. 6, 2017 cobbled together by those “handpicked” analysts from CIA, FBI, and NSA.  It is, in all candor, an embarrassment to the profession of intelligence analysis and yet, for political reasons, it has attained the status of Holy Writ.

    The Paper of (Dubious) Record

    I recall the banner headline spanning the top of the entire front page of the NYT on Jan. 7, 2017: “Putin Led Scheme to Aid Trump, Report Says;” and the electronic version headed “Putin Led a Complex Cyberattack Scheme to Aid Trump, Report Finds.”  I said to myself sarcastically, “Well there you go!  That’s exactly what Mrs. Clinton – not to mention the NY Times, the Washington Post and The Establishment – have been saying for many months.”

    Buried in that same edition of the Times was a short paragraph by Scott Shane: “What is missing from the public report is what many Americans most eagerly anticipated: hard evidence to back up the agencies’ claims that the Russian government engineered the election attack. That is a significant omission.”

    Omission? No hard evidence?  No problem. The publication of the Jan. 6, 2017 assessment got the ball rolling. And Democrats like Adam Schiff (D-Calif.) ranking member of the House Intelligence Committee, were kicking the ball hard down the streets of Washington.  On Jan. 25, 2017, I had a chance to confront Schiff personally about the lack of evidence — something that even Obama had acknowledged just before slipping out the door. I think our two-minute conversation speaks volumes.

    Now I absolutely look forward to dealing with Adam Schiff from my new position as CIA director.  I will ask him to show me the evidence of “Russian hacking” that he said he could not show me on Jan. 25, 2017 – on the chance his evidence includes more than reports from the New York Times.

    Sources

    Intelligence analysts put great weight, of course, on sources.  The authors of the lede, banner-headlined NYT article of Jan. 7, 2017 were Michael D. Shear and David E. Sanger; Sanger has had a particularly checkered career, while always landing on his feet.  Despite his record of parroting CIA handouts (or perhaps partly because of it), Sanger is now the NYT’s chief Washington correspondent.

    Those whose memories go back more than 15 years may recall his promoting weapons of mass destruction in Iraq as flat fact. In a July 29, 2002 article co-written with Them Shanker, for example, Iraq’s (non-existent) “weapons of mass destruction” appear no fewer than seven times as flat fact.

    More instructive still, in May 2005, when first-hand documentary evidence from the now-famous “Downing Street Memorandum” showed that President George W. Bush had decided by early summer 2002 to attack Iraq, the NYT ignored it for six weeks until David Sanger rose to the occasion with a tortured report claiming just the opposite.  The title given his article of June 13 2005 was “Prewar British Memo Says War Decision Wasn’t Made.”

    Against this peculiar reporting record, I was not inclined to take at face value the Jan. 7, 2017 report he co-authored with Michael D. Shear – “Putin Led a Complex Cyberattack Scheme to Aid Trump, Report Finds.”

    Nor am I inclined to take seriously former National Intelligence Director James Clapper’s stated views on the proclivity of Russians to be, well, just really bad people — like it’s in their genes.  I plan to avail myself of the opportunity to discover whether intelligence analysts who labored under his “aegis” were infected by his quaint view of the Russians.

    I shall ask any of the “handpicked” analysts who specialize in analysis of Russia (and, hopefully, there are at least a few): Do you share Clapper’s view, as he explained it to NBC’s Meet the Press on May 30, 2017, that Russians are “typically, almost genetically driven to co-opt, penetrate, gain favor, whatever”?  I truly do not know what to expect by way of reply.

    End of Day One

    In sum, my priority for Day One is to hear both sides of the story regarding “Russian hacking” with all cards on the table.  All cards.  That means no questions are out of order, including what, if any, role the “Steele dossier” may have played in the preparation of the Jan. 6, 2017 assessment.

    I may decide to seek some independent, disinterested technical input, as well.  But it should not take me very long to figure out which of the two interpretations of alleged “Russian hacking” is more straight-up fact-based and unbiased. 

    That done, in the following days I shall brief both the Chair, Devin Nunes (R-Calif.) and ranking member Schiff of the House Intelligence Committee, as well as the Chair and ranking member of its counterpart in the Senate.  I will then personally brief the NYT’s David Sanger and follow closely what he and his masters decide to do with the facts I present.

    On the chance that the Times and other media might decide to play it straight, and that the “straight” diverges from the prevailing, Clapperesque narrative of Russian perfidy, the various mainstream outlets will face a formidable problem of their own making.

    Mark Twain put it this way: “It is easier to fool people than it is to convince them they have been fooled.”

    And that will probably be enough for Day One.

  • These 35 Minerals Are Absolutely Critical To U.S. Security

    What do cobalt, uranium, helium, titanium, and fluorspar have in common?

    As Visual Capitalist’s Jeff Desjardins points out, according to the U.S. government, these are all minerals that are deemed critical to both the economic and national security of the country.

    The draft list of 35 critical minerals was released on February 16, 2018 as the result of President Trump’s Executive Order 13817, which asked the U.S. Department of the Interior and the Secretary of Defense to publish a list of mineral commodities that are vital to U.S. interests.

    Under the Executive Order, a critical mineral is defined as:

    A non-fuel mineral or mineral material essential to the economic and national security of the United States, the supply chain of which is vulnerable to disruption…

    The list includes minerals that are important for defense, economic, and industrial purposes – and it keys in especially on minerals that are not produced in substantial quantities domestically.

    Courtesy of: Visual Capitalist

     

    WHY THESE CRITICAL MINERALS?

    We sorted the list based on some of the key uses of these minerals.

    Of course, some of these minerals could belong in multiple categories: for example, vanadium is used as a steel and titanium alloy strengthener, but also in rechargeable vanadium flow batteries.

    That said, the important commonality to note for all of these minerals is their crucial link to the U.S. economy and national security.

    PREPARING FOR THE WORST-CASE SCENARIO

    Imagine the hypothetical impact of a lack of uranium for nuclear plants, a hampered ability to create high-strength steel and superalloys for the U.S. military, or if U.S. auto manufacturers had limited access to aluminum, steel, PGMs, and battery metals.

    The challenge, as U.S. federal authorities realize, is that many of these raw materials are produced in limited amounts domestically. In fact, according to the USGS, the country sources at least 31 of the aforementioned materials chiefly through imports.

    While it is unlikely that these supply chains would ever be disrupted, it’s never a bad idea to prepare for the worst-case scenario.

  • The Xi Silk Road Is Here To Stay

    Authored by Pepe Escobar via The Asia Times,

    Xi’s extended tenure could embody the guarantee China needs to continue its anti-corruption purge and guide the ongoing economic reorientation....

    It took only two sentences for Xinhua to make the historical announcement; the Central Committee of the CCCP “proposed to remove the expression that ‘the president and vice-president of the People’s Republic of China shall serve no more than two consecutive terms’ from the country’s constitution.”

    That will be all but confirmed at the end of the annual National People’s Congress session starting next week in Beijing.

    A Made in the West geopolitical storm duly ensued; forceful condemnations of the “regime” and its “authoritarian revival,” across-the-spectrum demonization of the “dictator for life” and “the new Mao.” It’s as if the New Emperor was about to concoct the imminent launch of a Great Famine, Cultural Revolution and Tiananmen combo.

    Now compare the hysteria with renowned Renmin University professor of International Relations Shi Yinhong, who attempted to introduce a measure of realpolitik: “For a long time into the future, China will continue to move forward according to Xi’s thoughts, his route, his guiding principles and his absolute leadership.”

    The global economy’s captains of industry, old and new, have better shark fin to consume than to be constrained by the lowly Western Politician game of demonizing China. Turbo-capitalism – with or without “Chinese characteristics” – has absolutely nothing to do with Western liberal democracy. The Little Helmsman Deng Xiaoping introduced a real “third way”: economic proficiency coupled with political control. Deng, by the way, learned the ropes from Singapore strongman Lee Kuan Yew – a darling of the West.

    Xi may embody the guarantee China needs to carry out, as smoothly as possible, a much-needed anti-corruption purge sidelining the many rotten branches of the CCP while steering a much needed economic reorientation that should benefit, most of all, the rural proletariat.

    Besides, Xi is already leading internationally in climate change, nuclear proliferation, not to mention realigning global trade as globalization 2.0.

    And that brings us to childish Western attempts to deride the New Silk Roads, known as the Belt and Road Initiative (BRI) as “overblown,” coupled with claims that BRI is facing a “global backlash.” That barely qualifies as wishful thinking.

    What’s happening in the real world is that the Trump administration is trying to engineer an anti-BRI via the Quad (US, Japan, India, Australia) – but without BRI’s transnational and transcontinental appeal, not to mention funding.

    Japan is making noises about a $200 billion Afro-Asian counterpunch. India centers its offensive on a deal with Iran to have Chabahar port compete with Gwadar. The Turnbull administration in Australia, in its 2017 Foreign Policy White Paper, bets on engaging the US against China. And Admiral Kurt Titt, the head of Southcom, carps, among other military officers, that BRI is a threat to US influence.

    Xi, as well as Russian leader Vladimir Putin, has identified very clearly which way the wind is blowing, with Washington treating both China and Russia as “revisionist powers” and a certified strategic threat.

    The Tang dynasty meets Plato

    Xi may now turn into a post-modern version of an enlightened Tang emperor. But he also performs as the embodiment of Plato – a philosopher-king ruling with help of the best and the brightest (think Liu He, director of the Office of the Central Leading Group for Financial and Economic Affairs and Xi’s top man on economic policy).

    The CCP as Plato’s Republic has concluded that yes, it’s all about management. China’s titanic tweaking of its economic model simply cannot be accomplished at least before 2030. Challenges include managing the transition of state-owned enterprises (SOEs); the move towards added value GDP growth; how to organize China as a major consumer society; and how to contain the spread of financial risks.

    For all these, consistency and continuity is key.

    Xi has all but announced his major moves. The Chinese Dream – or China as a stable, middle-income nation. BRI as a connectivity vector integrating not only Eurasia but also Africa and Latin America. The increasing influence of the Asian Infrastructure Investment Bank as well as the Shanghai Cooperation Organization. Securing the South China Sea as well as increasing a presence not only across the Indian Ocean but all the way to the Third Island – a matter of protecting China’s connectivity/supply lines.

    And last but not least, China configured as the top power in either Asia-Pacific or “Indo-Pacific.”

    History will judge Xi by his deeds. The rest is mere Sinophobia.

  • After Day Of Bizarre, Possibly Drunken Interviews , Nunberg Says He'll "Probably" Cooperate

    After a day of bizarre interviews – possibly while under the influence of one or more substances – Trump campaign associate Sam Nunberg says he will “probably end up cooperating” with special counsel Robert Mueller after previously stating he would not comply. “Mr. Mueller should understand I am not going in on Friday,” Nunberg told the Washington Post.

    Nunberg, who was fired from the Trump campaign in 2015 over offensive Facebook posts, was subpoenaed by Mueller to appear before a grand jury investigating Russian interference in the 2016 elections. 

    “I’m not going to cooperate with Mueller. It’s a fishing expedition,” Nunberg told Bloomberg News. “They want me in there for a grand jury for testimony about Roger Stone. He didn’t do anything. What is he going to do? His investigation is BS. Trump did not collude with Putin. It’s a joke.”

    “Let him arrest me,” said Nunberg.

    * * *

    After an awkward appearance on CNN, host Erin Burnett wrapped up the interview by suggesting Nunberg had been drinking. 

    “We talked earlier about what people in the White House were saying about you ― talking about whether you were drinking or on drugs or whatever had happened today,” said Burnett. “Talking to you, I have smelled alcohol on your breath.”

    Nunberg claimed he had not had a drink and had only taken antidepressants earlier in the day – however the Daily Beast reported on Monday evening that Nunberg had been acting strangely in reaction to Mueller’s subpoena, and that they were worried he had been “drinking again,” and was about to enter into a tailspin. 

    Starting Monday morning, Nunberg began calling several close associates that he was flatly refusing, at this time, to cooperate with Mueller’s investigation into alleged Russian meddling in the 2016 presidential election. Three Nunberg friends said they walked away from those conversations fearful that he was “drinking again” and was about to embark on a personal tailspin. They didn’t know it would play out on daytime TV. –Daily Beast

    Fellow former campaign aide Carter Page said that Nunberg’s claim he colluded with the Kremlin was bogus, and implied that Nunberg had a drinking problem. “There’s been a lot of people that have been quite intoxicated for over a year and a half now, so nothing new here,” Page told Sean Hannity on the Fox News.

    After admitting to host Katy Tur that he’d been interviewed by Mueller’s investigators, Nunberg was then asked if he believes the special counsel “has anything” on Trump. “I think they may,” the ex-aide responded. “I think he may have done something during the election. But I don’t know that for sure.”

    That was enough for both the CBS Evening News and ABC’s World News Tonight – which kicked off their programs with the possibly drunk, possibly high Nunberg’s bumbling admission:

    “The former Trump campaign aide believes investigators have evidence that the Trump campaign may have colluded with the Russians, but Nunberg refuses to appear before a federal grand jury,” hyped CBS Justice reporter Paula Reid. She also played audio of Nunberg suggesting “Trump may have very well done something during the election with the Russians.”

    The [ABC] network’s Chief Justice Correspondent Pierre Thomas also hyped Nunberg’s “stunning suggestion” about Trump and collusion. “Nunberg suggesting on yet another cable show that he believes the President knew about the Trump Tower meeting with the Russians,” the ABC reporter added before playing a clip of his phone interview on CNN’s The Lead with Jake Tapper.

    Meanwhile, on NBC Nightly News, anchor Lester Holt described the off the wall interviews and phone calls as “a fascinating twist in the Russia investigation.” And NBC White House Correspondent Kristen Welker touted Nunberg’s antics: “Tonight, defiant and digging in. Sam Nunberg, a former Trump campaign aide turned Trump antagonist dropping this bombshell, becoming the first former adviser to publically suggest candidate Trump may have done something wrong.” –Newsbusters.org

    The Subpoena

    Mueller has requested all emails, text messages, work papers, telephone logs and other documents pertaining to a list of individuals dating back to November 1, 2015 – approximately four-and-a-half months after Trump launched his campaign. 

    NBC News reported last week that Mueller’s team is asking pointed questions about whether Trump knew about hacked emails from Hillary Clinton’s campaign before the public found out. The subpoena indicates that Mueller may be focused not just on what Trump campaign aides knew and when they knew it, but also on what Trump himself knew. 

    The list (via NBC): 

    •     Steve Bannon, who left the White House as chief strategist in August.
    •     Michael Cohen, a personal lawyer for Trump who testified before congressional investigators in October.
    •     Rick Gates, Trump’s former deputy campaign manager, who pleaded guilty last month to conspiracy and lying to the FBI.
    •     Hope Hicks, who resigned last week as Trump’s communications director.
    •     Corey Lewandowski, Trump’s campaign manager until June 2016.
    •     Paul Manafort, a former Trump campaign manager and Gates’ business partner, who pleaded not guilty to money laundering, conspiracy and making false statements last week.
    •     Carter Page, a former Trump campaign aide.
    •     Keith Schiller, a former bodyguard for Trump who left as director of Oval Office operations in September.
    •     Roger Stone, a longtime Republican political operative and Trump campaign adviser who sources have told NBC News is the focus of investigators interested in his contacts with WikiLeaks during the campaign.

    In response to the laundry list of deliverables, Nunberg told Bloomberg News “They want me in there for grand jury on Friday. I’m not paying the money to go down there,” Nunberg said. “What’s he going to do? He’s so tough – let’s see what they do. I’m not going to spend 40 hours going over emails. I have a life.” 

     

  • Kelly Has No Idea What Jared And Ivanka Do All Day: Report

    Chief of staff John Kelly has reportedly grown frustrated with White House advisers Jared Kushner and Ivanka Trump, and has been asking people what the couple does all day, according to a report by the Associated Press.

    “I am not a person who has sought the spotlight. First in my business and now in public service, I have worked on achieving goals, and have left it to others to work on media and public perception,” Kushner told congressional investigators last July.

    But it is not immediately obvious what he’s achieved. There has been little progress on Mideast peace and relations with Mexico, another top Kushner priority, remain contentious over Trump’s proposed border wall. Kushner’s much ballyhooed project to reinvent the federal government has gained little traction. And questions persist about his family business’s global hunt for cash just a year before a $1.2 billion mortgage on a Manhattan skyscraper must be paid off by the company. -AP

    Kushner has come under fire of late, as Special Counsel Robert Mueller is reportedly probing his family’s Real Estate dealings – including whether foreign nationals sought to manipulate him over his family’s financial position. 

    The Kushner Co. says it is financially sound, however skeptics point to the company scrambling to raise funds from investors whose country of origin may present a conflict of interest. The Intercept reported that Kushner supported a blockade against Qatar after his father, Charles Kushner, sought and failed to obtain financial support from the Qatari financial minister for the family’s troublesome 666 Fifth Avenue property. 

    “If it’s true it’s damning,” Sen. Chris Murphy (D-CT) a member of the Senate Foreign Relations Committee, told ABC on “This Week” Sunday. “If it’s true he’s got to go.”

    Kushner also lost his ability to access top-secret intelligence last week, as President Trump – who could have granted Jared a permanent clearance – left the decision to Chief of Staff John Kelly. 

    “I will let General Kelly make that decision,” Trump told reporters. “I have no doubt he’ll make the right decision.”

    The couple perceives Kelly’s crackdown on security clearances as a direct shot at them, according to White House aides and outside advisers. But one White House official disputed that account, suggesting that Kushner welcomed Kelly’s efforts to organize the West Wing, allowing him to more singularly focus on his portfolio.

    Kelly, in turn, has been angered by what he views as the couple’s freelancing. He blames them for changing Trump’s mind at the last minute and questions what exactly they do all day, according to one White House official and an outside ally. –AP

    Kushner’s clearance was downgraded from “Top Secret/SCI-level” to “secret” – walling them off from the most sensitive information. The decision was the first major shakeup since the dismissal of former White House staff secretary Rob Porter, who was exposed for abusing both of his ex-wives. The FBI insinuated that it had informed the White House of Porter’s conduct, appearing to contradict a timeline of events initially offered by Kelly.

    “Only a son-in-law could withstand this sort of exposure and not be fired,” said former Obama communications director, Jennifer Palmieri “Kushner’s vulnerable and in an accelerated fall from grace. Even though his departure would leave Trump even more isolated, a decision could be made that it’s just not worth it for him to stay.”

    That said, Trump has reportedly grown frustrated with both Kelly and over negative press surrounding Jared and Ivanka, according to the New York Times – and has been quietly seeking a solution to remove them from the White House. 

    Trump denied reports that he was displeased. “As I told Jared days ago, I have full confidence in his ability to continue performing his duties in his foreign policy portfolio including overseeing our Israeli–Palestinian peace effort and serving as an integral part of our relationship with Mexico,” said Trump. “Everyone in the White House is grateful for these valuable contributions to furthering the president’s agenda. There is no truth to any suggestion otherwise.”

    The AP reports that Jared and Ivanka have no plans on leaving Washington anytime soon.

  • These 5 Cities Are The Amazon HQ2 Finalists, According To BofA

    Two weeks ago, a surge in web queries emanating from an internal Amazon.com page devoted to the company’s HQ2 search, and focused on Arlington, VA hinted that the winner for the company’s HQ2 location was already familiar to at least a small group of Amazon employees.

    That said, Washington D.C. (and surrounding areas) winning the great HQ2 race would hardly be a major surprise: recently researchers at Hamilton Place Strategies, an analytic PR consultancy, crunched the numbers and tabulated that Washington, D.C. would be the most likely city to land Amazon’s massive second headquarters.

    AMZN

    To be sure, for now Jeff Bezos has been tight lipped about his thought process, and all the 20 original cities listed by Amazon remain viable candidates… although Bank of America begs to differ.

    In a report from cross-sector analyst, John Lovallo, the BofA strategist writes that the bank’s Data Analytics team “has developed a dynamic model to narrow Amazon’s current selection of 20 potential cities for its planned second headquarters (HQ2) to a short-list of five finalist prospective locations.” 

    BofA explains that Amazon has listed certain requirements in choosing a second headquarters, which broadly encompass the city’s financial strength, labor pool (size and education), cost of doing business, cost of living, transportation infrastructure and source of innovation. He then caveats that “Without specific guidance from Amazon, we have chosen to equally weight these factors (with the exception of source of innovation, due to limited input factors), but our selection could change if we were to weight certain criteria more highly.”

    Naturally, he then hedges:

     While Amazon has stated requirements, weighting of these factors remains unclear, introducing a degree of art in our selection of possible HQ2 cities. Our analysis also focuses exclusively on the relative attractiveness of each potential market and thus does not contemplate availability or viability of specific sites for the actual headquarters

    And with that disclaimer in place, BofA predicts that top five contender cities, listed alphabetically are:

    • Atlanta, GA,
    • Boston, MA,
    • Denver, CO,
    • Raleigh, NC
    • Washington D.C. (incl. Montgomery County, MD and Northern VA).

    Somewhat redundantly, BofA also shows a map with the five cities on it.

    More notable is the detailed methodology of how BofA thinks Amazon will approach the selection process, and how it narrowed down the list to just 5 finalist cities. This is what BofA disclosed:

    Our analysis assumes Amazon will build its next headquarters in a city that is similar to Seattle, while incorporating additional considerations such as affordable and reliable housing, business cost and commute. We utilize the results of two, equally-weighted methodologies to create a composite score.

    Methodology #1

    Our first approach isolated the cities that were most similar to Seattle. All parameters were normalized. A Euclidean distance* was calculated for each of the 17 cities relative to Seattle. These distances quantify the similarity between two cities by taking into account all the parameters like housing, business cost, commute etc. The smaller the Euclidean distance, the more similar a city was considered to be to Seattle. This approach resulted in the following top five candidates for Amazon’s HQ2 (listed alphabetically):

    Austin, TX
    Boston, MA
    Denver, CO
    Los Angeles, CA
    Washington D.C.**

    Methodology #2

    The second approach ranked the cities by each parameter/factor, determined by BofAML, in the model. The ranks were summarized within seven broader categories (financial, employment, education, business cost, housing, commute and innovation). For example, the sum of Tech occupation and Non-tech occupation’s weighted ranks equates to the employment score. The score of each broad category was normalized and weighted*** to compute the final score. Lower scores in this approach imply less overall costs to Amazon for their second headquarters and are thus more favorable (listed alphabetically):

    Atlanta, GA
    Boston, MA
    Pittsburgh, PA
    Raleigh, NC
    Washington D.C.**

    Finally, assuming BofA’s list of 5 companies is correct, here are the public stocks that stand to benefit the most from the potential pick:

    Amazon estimates that the city of choice for its HQ2 will reap $5bn of investment from the company and experience roughly 50K new job openings. This would clearly be a boon to the local economy of the winning city and provide a tailwind for numerous companies within the surrounding area. We highlight the following potential stock beneficiaries (alphabetically) in Table 1 for each of the five cities in our Amazon HQ2 short-list.

  • Retired Green Beret Warns, Prepare For War: 'Globalism, Socialism, And Communism' Versus 'Freedom'

    Authored by Jeremiah Johnson (nom de plume of a retired Green Beret of the United States Army Special Forces) via SHTFplan.com,

    “Peace Sells, But Who’s Buying?”  – Megadeath

    “SI VIS PACEM PARA BELLVM.”  (If you wish peace, prepare for war) PVBLIVS FLAVIVS VEGETIVS RENATVS (aka: “Vegetius”)

    “Peace through superior firepower.” – former President Ronald Reagan

    ***

    History: It repeats itself and is consistently ignored before it does so.

    Ignored are the elements that lead up to the repeated event, although they blossom akin to flowers right before the eyes. One of the problems is doubting it, the “doubting” that the event is happening…is really happening. One of the elements that leads to that doubt is the event transpires almost imperceptibly, with such incremental slowness that it is not recognized as a single event that is happening.

    In this case we are talking about the conversion of our society in the United States to full-blown dictatorship or a complete loss of rights guaranteed under the Constitution… such a loss that eventually leads to a dictatorship or a tyrannical, oppressive government. History shows us, and we ignore it.

    The Founding Fathers have been degraded and ridiculed by the new society the media and their Communist masters are creating. Their mortal weaknesses are upheld at every chance in substitution for the enormity of the sacrifices they made to form the basis for our nation’s government. The Constitution of the United States of America took more than 11 years to create.

    These Communists would have you believe that the Founding Fathers were a pack of illiterate morons who could not control their own lascivious appetites… who owned slaves and were elitists. These Communists have been infiltrating the United States for a hundred years… destroying the moral fabric of our society by destroying the family. The Communists infiltrated our government and camouflaged themselves with the names “Liberal” or “Progressive,” or some (such as Bernie Sanders) declaring softly, “I’m a Socialist.”

    The government is infested with Communists, plain and simple, and these Communist/Socialist traitors have denigrated our nation and sunk it into an abyss. Aided by their lackeys, such as the Cloward and Piven, Abbie Hoffman, Saul Alinsky, the Trumka’s and other union leaders… they further destroyed it by what they allowed. These Senators, Congressmen, Justices, and those in successive Presidential Administrations, bolstered by oligarchs and other magnates…what they did not foster or create, they allowed in the media and in Hollywood to be rammed into our eyes and ears.

    These Communists have destroyed the family structure, the borders, the culture, the religious and social traditions, and the history that has given us identity and solidarity with one another.

    The bottom line: J. Edgar Hoover and Joseph McCarthy had it right…100% right.

    “Globalism” is not simply international trade or commerce. Globalism is global governance. Governance is rule.  Government is supposed to derive its powers from the consent of the governed… not by chicanery, lying, theft, or by bypassing the Constitution of the United States. Globalism is a “nice” way to phrase it… akin to a happy Kumbaya-singing globe of each different genotype holding hands with a smile in a conga line.

    Hoover and McCarthy would have called globalism what it is: socialism on the “soft” side, and Communism on the concrete, reality side.

    The aim of these Communists is to have one world government. To do this, they must first destroy the United States.  In order to do this, it must be “deep” battle, in every echelon…from the Pastoral Initiative teams (religious collaborators and snitches who sell out their congregations for the scraps from the government table), to the illegal aliens crossing our borders, to the planned siphoning and sale of our natural resources to the Chinese, Russians, and other foreigners, to the crafting of laws that enable the UN and the rest of the globe to gain more ground in the U.S. (such as the transfer of Internet control to ICANN, a foreign-owned corporation with a Beijing headquarters).

    Militarily we’ve been downsized, with the quality of our service-members “diluted” with behaviors such as homosexuality and lesbianism being permitted, as well as “transgender” service-members and women placed into combat roles. Our combat-seasoned officers and non-commissioned officers in command positions have been replaced with politicians. The most effective weapons in our arsenals (such as the SR-71, the A-10, and the Tomahawk, for example) have been halted in production and/or mothballed, as well as rendered ineffective with a lack of parts or maintenance. The Air Force is severely short of pilots. We are overfunded but without enough return on our investment.

    Economically, the Petrodollar has been on its last breath for years, and the breathing is agonal. We are being eclipsed by newer markets and new alliances. Cryptocurrencies are a scam that will eventually be used to control and keep track of everyone’s wealth when all the governments nationalize it. Even worse than Fiat currency, it doesn’t even exist except electronically and with nothing to back it whatsoever.

    Akin to “Quatloos” out of the Star Trek Episode, “The Gamesters of Triskelion.”

    To complete the “fundamental transformation,” as it was termed by Obama, there must be mass unrest...civil unrest and potential racial strife and riots. The perceived differences between people are being exacerbated by the media, by the politicians, and by the socially-constructed brain patterns of the youth…dissenting for no reason except to disagree. With no motive other than the “causes” they have been herded and manipulated to uphold.

    The greatest example of this was the NFL kneeling initiated by Colin Kaepernick…to protest injustice that did not even exist. The “test program” backfired, because the NFL and the powers that back them underestimated the populace…that still has enough nationalistic pride and care for the country that they wouldn’t tolerate it. Yes, every avenue is being tested…crafted to see how they will handle the population when the big goal is finally attempted…the most necessary item in the plans to destroy the United States.

    They must have the guns.

    They must. They cannot collapse the United States and subjugate her to the rest of the world…make her a part of the Communist One-World government until they have the guns. We are seeing this materialize. Look at what the President of the United States has said! That guns can be confiscated without due process of law, and in complete violation of the Constitution. The states are already doing it: with legislation, and by executive order…they’re going after the guns.

    Read these, to learn what is happening, and what will happen again…from what has already happened before:

    1. “None Dare Call It Conspiracy,” by Gary Allen.

    2. “The Gulag Archipelago,” by Aleksandr Solzhenitsyn.

    3. “Vietnam Under Communism: 1975-1982,” by Nguyen Van Canh.

    4. “Masters of Deceit,” by J. Edgar Hoover.

    5. “None Dare Call It Treason,” by John A. Stormer.

    6. “The Insiders: Architects of the New World Order,” by John F. McManus

    7. “Why Not Victory?” by (then Senator) Barry M. Goldwater

    8. “The New World Order” by Pat Robertson Incidentally: Not being a fan of Robertson, I must state that this book outlines things in a non-didactic and factual manner that is amazingly detailed and well-organized.

    9. “Empire of Illusion,” by Chris Hedges

    10. “Rules for Radicals,” by Saul Alinsky [Know the Communist enemy by knowing his “playbook” and strategies]

    11. “1984,” by George Orwell [The only work of fiction on the list, and yet the “blueprint” for the Communist Global Government]

    A war within the United States is coming. When this occurs, we will be attacked by a foreign nation or nations.  Consider how far we went in the 8 years under Obama, and how fast it all occurred. When war comes internally (domestically) and with other nations, it will occur just as swiftly. Those who survive the initial onslaughts will have to decide and take a side. The works just mentioned can give you the information you may need to help you with that decision now, if you have not already made it. And the guns?

    Better hang on to yours: if you don’t have them, then others will make the decision for you.

    “Those who beat their rifles into plowshares will plow for those who do not.” – Benjamin Franklin

  • Israeli Firm Can Now Hack Into Virtually Any Cellphone, Tablet

    An Israeli firm claims it can now unlock virtually any phone or tablet on the market – including iPhones and Google Android devices, reports Forbes.

    Digital forensics firm Cellebrite – which helped the FBI crack iPhone used by the terrorist in the 2015 San Bernardino shooting, offers “Unlocking & Extraction Services” for several devices, including iPhones, iPads and iPods running iOS 5 through 11 – and Android devices including the Samsung Galaxy, Galaxy Note, and other devices running the Google OS such as Alcatel, Nexus, HTC, Huawei, LG, Motorola, ZTE and more. The service costs as low as $1,500 per device. 

    Cellebrite, a Petah Tikva, Israel-based vendor that’s become the U.S. government’s company of choice when it comes to unlocking mobile devices, is this month telling customers its engineers currently have the ability to get around the security of devices running iOS 11 (right up to 11.2.6). That includes the iPhone X, a model that Forbes has learned was successfully raided for data by the Department for Homeland Security back in November 2017, most likely with Cellebrite technology. –Forbes

    Founded in 1999 with a headcount of around 500 employees, Cellebrite offers “Advanced Unlocking Services,” and “Advanced Extraction Services” to law enforcement agencies through a network of “secure Cellebrite Forensic Labs (CBFLs) located around the world.” In 2007 the firm was bought for $17.5 million by Japanese manufacturing giant Sun Corp. 

    “Cellebrite Advanced Unlocking Services is the industry’s only solution for overcoming many types of complex locks on market-leading devices. This can determine or disable the PIN, pattern, password screen locks or passcodes on the latest Apple iOS and Google Android devices,” reads a document published by the firm. 

    Their Advanced Extraction claims to be “the world’s first and only decrypted physical extraction capability possible for leading Apple iOS and Google Android Services.” 

    These new capabilities enable forensic practitioners to retrieve the full file system to recover downloaded emails, third-party application data, geolocation data and system logs, without needing to jailbreak or root the device. This eliminates any risk in compromising data integrity and the forensic soundness of the process. This enables access to more and richer digital data for the investigative team. –Cellebrite

    Once a “pre-qualified” phone or tablet is selected for unlocking, “the locked and/or encrypted device is sent by trusted courier or hand carried to one of our secure global Cellebrite Forensic Labs where trained specialists perform the unlocking and/or extraction service using carefully controlled  techniques that ensure the forensic integrity of the data,” writes the company. 

    From there, it takes around 10 business days to process a device and deliver it back to the “originating agency,” while all electronics are handled using “court-tested chain-of-custody procedures.” 

    After Apple refused a 2015 FBI request to unlock an iPhone 5C belonging to San Bernardino shooter Rizwan Farook, who murdered 14 people in San Bernardino and injured 22, Cellebrite stepped in to crack the phone. Since then, the company has been engaged by several law enforcement agencies around the world – such as Australia’s Immigration Department and the Great Barrier Reer Marine Park Authority. 

    And according to a Michigan warrant unearthed by Forbes, Cellebrite cracked an iPhone X owned by Abdulmajid Saidi – an arms trafficking suspect. Saidi’s phone was nabbed as he was about to leave America for Beirut, Lebanon on November 20, sent to a Cellebrite specialist at the DHS Security Investigations Lab in Grand Rapids, after which data was extracted on December 5. Saidi’s trial is set for July 31.

    From the warrant, it wasn’t clear just how the police got into the iPhone X in the first place, nor does it reveal much about what data was inside. Back when the iPhone X was launched, some fears were raised about the possibility for investigators to simply lift the device to a suspect’s face to unlock it via Apple’s Face ID facial recognition. Researchers also claimed to have found ways to dupe the Face ID tech into unlocking with a mask. The DoJ prosecutor on the case declined to comment, whilst the DHS didn’t respond to requests for comment. –Forbes

    “I’d be zero-percent surprised if Cellebrite had a zero-day [exploit] that allowed them to unlock iPhones with physical access,” Patrick Wardle, chief research officer at Digita Security, told cybersecurity news site Threatpost. “These guys clearly have the skills, and there is also a huge financial motivation to find such bugs.”

    In response to Cellebrite’s claims, Apple has urged customers to upgrade to the latest version of iOS 11 – which contains several patches for several of the exploits potentially used by the Israeli firm. 

    Apple has said publicly a recent version of iOS 11.2 does address several serious vulnerabilities found by Google Project Zero. In December, Project Zero researcher Ian Beer published details of an “async_wake” exploit and proof-of-concept local kernel debugging tool for iOS 11.1.2. The vulnerability exploited two patched flaws in iOS 11.1.2 that made it possible to jailbreak iPhones running earlier versions of the OS. –Threatpost.com

    “Cellebrite’s techniques clearly pose privacy concerns for Apple customers, but there are also underlying issues around the private forensics contractors doing business with them,” said David Pearson, Principal Threat Researcher at Awake Security. “We’ve already seen what happens when governments weaponize undisclosed exploits and fail to protect them, such as Eternal Blue, Doublepulsar and other tools and exploits alleged to belong to the NSA. This iOS technique may bring more of the same, not to mention the added scrutiny of many security researchers and criminals alike being on the lookout for such information.”

  • The Tyranny Of Algos Is Here

    Authored by John Harris, op-ed via TheGuardian.com,

    Credit scores already control our finances. With personal data being increasingly trawled, our politics and our friendships will be next…

    For the past couple of years a big story about the future of China has been the focus of both fascination and horror. It is all about what the authorities in Beijing call “social credit”, and the kind of surveillance that is now within governments’ grasp. The official rhetoric is poetic. According to the documents, what is being developed will “allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step”.

    As China moves into the newly solidified President Xi Jinping era, the basic plan is intended to be in place by 2020. Some of it will apply to businesses and officials, so as to address corruption and tackle such high-profile issues as poor food hygiene. But other elements will be focused on ordinary individuals, so that transgressions such as dodging transport fares and not caring sufficiently for your parents will mean penalties, while living the life of a good citizen will bring benefits and opportunities.

    Online behaviour will inevitably be a big part of what is monitored, and algorithms will be key to everything, though there remain doubts about whether something so ambitious will ever come to full fruition. One of the scheme’s basic aims is to use a vast amount of data to create individual ratings, which will decide people’s access – or lack of it – to everything from travel to jobs.

    The Chinese notion of credit – or xinyong – has a cultural meaning that relates to moral ideas of honesty and trust. There are up to 30 local social credit pilots run by local authorities, in huge cities such as Shanghai and Hangzhou and much smaller towns. Meanwhile, eight ostensibly private companies have been trialling a different set of rating systems, which seem to chime with the government’s controlling objectives.

    The most high-profile system is Sesame Credit – created by Ant Financial, an offshoot of the Chinese online retail giant Alibaba. Superficially, it reflects the western definition of credit, and looks like a version of the credit scores used all over the world, invented to belatedly allow Chinese consumers the pleasures of buying things on tick, and manage the transition to an economy in which huge numbers of people pay via smartphones. But its reach runs wider.

    Using a secret algorithm, Sesame credit constantly scores people from 350 to 950, and its ratings are based on factors including considerations of “interpersonal relationships” and consumer habits.

    Bluntly put, being friends with low-rated people is bad news. Buying video games, for example, gets you marked down. Participation is voluntary but easily secured, thanks to an array of enticements. High scores unlock privileges such as being able to rent a car without a deposit, and fast-tracked European visa applications. There are also more romantic benefits: the online dating service Baihe gives people with good scores prominence on its platforms.

    Exactly how all this will relate to the version of social credit eventually implemented is unclear: licences that might have enabled the systems to be rolled out further ran out last year. There again, Ant Financial has stated that it wants to “help build a social integrity system” – and the existing public and private pilots have a similar sense of social control, and look set to feed the same social divisions. If you are mouldering away towards the bottom of the hierarchies, life will clearly be unpleasant. But if you manage to be a high-flyer, the pleasures of fast-tracking and open doors will be all yours, though even the most fleeting human interaction will give off the crackle of status anxiety.

    It would be easy to assume none of this could happen here in the west. But the 21st century is not going to work like that. These days credit reports and scores – put together by agencies whose reach into our lives is mind-boggling – are used to judge job applications, thereby threatening to lock people into financial problems. And in the midst of the great deluge of personal data that comes from our online lives, there is every sign of these methods being massively extended.

    Three years ago Facebook patented a system of credit rating that would consider the financial histories of people’s friends. Opaque innovations known as e-scores are used by increasing numbers of companies to target their marketing, while such outfits as the already infamous Cambridge Analytica trawl people’s online activities so as to precisely target political messaging. The tyranny of algorithms is now an inbuilt part of our lives.

    These systems are sprawling, often randomly connected, and often beyond logic. But viewed from another angle, they are also the potential constituent parts of comprehensive social credit systems, awaiting the moment at which they will be glued together.

    That point may yet come, thanks to the ever-expanding reach of the internet. If our phones and debit cards already leave a huge trail of data, the so-called internet of things is now increasing our informational footprint at speed.

    In the short term, the biggest consequences will arrive in the field of insurance, where the collective pooling of risk is set to be supplanted by models that focus tightly on individuals. Thanks to connected devices, insurers could soon know how much television you watch, whether you always obey traffic signals, and how well your household plumbing works. Already, car insurance schemes offer lower premiums if people install tracking devices that monitor their driving habits; and health insurance companies such as the British firm Vitality offer deals based on access to data from fitness trackers. In the near future, as with Sesame Credit, people will presumably sign up for surveillance-based insurance in their droves because of such simple incentives, and those squeamish about privacy may simply have to pay more. Many people, of course, will simply be deemed impossible to protect.

    Personal data and its endless uses form one of the most fundamental issues of our time, which boils down to the relationship between the individual and power, whether exercised by government or private organisations. It speaks volumes that in Whitehall responsibility for such things falls uncertainly between the culture secretary, Matt Hancock, whose “digital” brief includes what the official blurb limply calls “telecommunications and online”, the Treasury and an under-secretary of state in the business department, Andrew Griffiths, whose portfolio takes in “consumers”.

    That is absurd, and it may yet play its part in our rapid passage into a future that could materialise in both east and west, in which we do what we’re told, avoid the company of undesirables – and endlessly panic about how the algorithms will rate us tomorrow.

Digest powered by RSS Digest

Mar 05

Today’s News 5th March 2018

  • Gold, Diamonds Used To Bribe Banker In Sprawling $2 Billion Indian Fraud Scandal

    It has been more than two weeks since Punjab National Bank – one of India’s largest state-owned financial institutions – informed the public about a nearly $2 billion lending fraud allegedly masterminded by Nirav Modi, a famous celebrity jeweler and one of India’s richest men.  And still, investigators are just beginning to piece together the exact mechanics that allowed a celebrity jeweler, working with a handful of rogue bank employees at PNB’s Mumbai branch (the bank is based in New Delhi) to pull off the largest financial fraud in modern Indian history.

    In their latest update, federal investigators told Reuters and a host of other media organizations that Modi and his uncle Mehul Choksi – who played an integral role in the fraud – successfully bribed bank employee with gold coins and diamonds to help coax them to look the other way when signing off on fraudulent letters vouching for the shell companies receiving the loans.

    Authorities have apprehended a retired PNB manager named Gokulnath Shetty, pictured below, who was essentially Modi and Choksi’s inside man at the bank.

    Shetty

    Last week, we pointed out a disturbing trend whereby large multinational financial institutions were backing away from Indian banks, setting the stage for a painful credit crunch that could potentially destabilize the Indian economy.

    The Central Bureau of Investigation (CBI), which has arrested 14 people in the case, on Saturday for the first time said bribes were paid to at least one Punjab National Bank (PNB)official by Modi.

    The agency told the court that Yashwant Joshi, who worked as a manager in the forex department of the Mumbai branch that is at the center of the fraud, admitted to having received two gold coins weighing 60 grams and a pair of gold and diamond earrings from Modi.

    The articles have been recovered from Joshi’s house in the presence of independent witnesses, the CBI said.

    Police have also arrested two low level employees from the Brady House branch of PNB for helping ferry the fraudulent guarantee letters past the bank’s internal controls. The two men allegedly helped produce some of the letters of understanding, then recorded them in the bank’s internal system, effectively leaving its stewards in the dark. As any expert on India’s state-run banks would tell you, the fact that most Indian banks haven’t integrated their internal controls with the Society for Woldwide Interbank Telecommunication (SWIFT) leaves them incredibly vulnerable to fraud, particularly when bank employees who have nearly unfettered access decide to take advantage of their position.

    In its latest story, Reuters provided a detailed graphic explaining exactly how Modi and his crew managed to secure the fraudulent loans. The fake letters of undertaking that were so vital to the scheme allowed shell companies controlled by the fraudsters to receive loans mostly from foreign branches of Indian banks.

    Gold

    Over the weekend, an Indian federal judge issued a warrant for Choksi’s arrest. Both Choksi and his nephew Modi have fled the country, and are believed to be in Hong Kong. Prosecutors are also zeroing in on Modi, who is believed to be the ringleader of the whole scheme.

    “Modi appears to be the prima donna in the whole saga of the fraud perpetrated on the PNB,” the directorate said in a filing to the court seen by Reuters.

    But perhaps even more embarrassing – and ultimately more problematic – than the authorities’ inability to apprehend the ringleaders of the fraud (though they have arrested a total of 14 people over their suspected involvement in aiding or abetting it) is the fact that nothing is being done to strengthen oversight of Indian banks.

    Without that, the damage to the credibility to the state-run banking system may never be repaired – and if that happens, it’s the small business owners of India who will suffer as credit conditions are rapidly tightened.

  • An Anarchist Explains How Hackers Could Cause Global Chaos

    Authored by Laura Sydell via NPR.org,

    Artists and criminals are often the first to push the boundaries of technology. Barrett Brown is a criminal who has actually helped inspire art – the TV show Mr. Robot. Its protagonist is a hacktivist – a hacker who breaks into computer systems to promote a cause.

    Brown was connected to Anonymous, a group that hacked a private security firm to reveal secrets. He is now out and living in a halfway house in Dallas.

    He had spent years in a prison cell thinking about what he might do when he got out. And he says he is ready to change, so next time he gets involved in hacking a corporation he is able to inflict maximum damage.

    “Certainly, I haven’t gotten any less militant in the course of having these things done to me,” Brown says.

    Barrett Brown served time for being part of Anonymous, a group that hacked a private security firm to reveal secrets.

    Courtesy of Barrett Brown

    Since most hacktivists operate in the shadows, Brown offers the best look at these cyber-revolutionaries and their motivations.

    The 36-year-old Brown was born in Dallas. His father was a wealthy real estate investor, until he was investigated by the FBI for fraud. Brown’s father was never charged, but the family lost all its money and his parents divorced.

    “It was something that I’m sure instilled in me the idea that there was a degree of arbitrary power out there that could come down at any time and disrupt your life, as it did to me when I was a child,” Brown says.

    He hates arbitrary power and always has. He is an anarchist who believes the U.S. government is fundamentally corrupt. And he says most Americans are too complacent to do anything about it.

    “That’s what … in part brings me to contempt for the American citizenry,” he says. “Obviously, I have no respect for the laws, for the government or for the voters.”

    Instead, he says, his own code of values drives him.

    He became a radical intellectual — more interested in spreading revolutionary ideas than in protesting in the streets. But in 2006, Brown saw a potential outlet for his anarchist dreams — the hacktivist group Anonymous. It was leaderless, crowdsourced and militant.

    Anonymous managed to organize a massive attack on Scientology, even taking down its website. Brown started covering Anonymous as a journalist but soon became deeply involved.

    “I saw this as the very first ripples in something that would grow to be one of the great dynamics of the 21st century, that we would see more of this emergence [of] online warfare essentially against institutions including nation-states,” he says.

    For many years, Brown was a sort of unofficial spokesman for Anonymous, appearing in interviews dressed in a beige corduroy or navy blue jacket and dress shirt, a cigarette dangling from his hand. He looked more like a preppy than a revolutionary.

    In 2011, the group began targeting companies that contracted with the U.S. government. One of them was Stratfor — a global intelligence firm. Emails released after an Anonymous hack included sensitive information on top-secret government missions like the killing of Osama bin Laden. The emails also show Dow Chemical hired Stratfor to spy on activists trying to get money for families who suffered during the Bhopal disaster.

    Brown viewed this as a private corporate version of COINTELPRO — the FBI’s effort in the 1960s to discredit activists like Martin Luther King Jr.

    Brown created Project PM, an online chatroom where participants looked through thousands of hacked emails to find the most incriminating. One email contained thousands of credit card numbers — and stealing credit cards is a crime.

    In September 2012, Brown was at home talking online with members of Project PM. “I heard a rustling at my door and I walked over to the door. I was holding a beer in my hand,” he says. “[I] thought it was another friend of mine.”

    But when he opened the door there was a SWAT team equipped with shields and helmets. Brown says they were yelling, “Put your hands up buddy.” Brown says they had him on the floor and put a boot on his back. The audio of the arrest was recorded by someone in the Project PM chatroom.

    Brown faced up to 100 years in prison. His mother was charged with hiding his laptops.

    Brown admits he went a bit off the rails. He posted a video on YouTube attacking an FBI agent.

    “I was a former heroin addict,” Brown says. “I was getting off Suboxone at the time, which is a synthetic opiate. And I was sort of suddenly feeling emotions again that have been kind of bottled, kept down a few months. I was very upset about my mother being threatened with indictment.”

    Still, Brown was a cause célèbre among certain activists and journalists. Many felt he was being put away for simply looking through hacked emails — something any journalist would do.

    Brown eventually pleaded guilty to threatening a federal officer and to two other charges. The government imprisoned other members of Anonymous. The group kind of faded away, but its tactics did not.

    During the 2016 election, Russian state-supported hackers used some of the same tools as Anonymous — hacking emails from the Democratic National Committee and posting them on WikiLeaks to embarrass Hillary Clinton.

    I wondered, is there really any difference between a foreign agent trying to undermine our democracy and hacktivists like Anonymous? Is Brown a hero or a villain?

    I turned to an unlikely expert to help me figure that out — Sam Esmail, the creator of the TV show Mr. Robot. “Their spirit is in activism,” Esmail says. “Their spirit is in exposing these frauds and abuses by people in power. And that’s just something on a human level I respect.”

    But Mr. Robot is hardly a glowing portrait of hacktivists. Its hero, Elliot, is a drug addict who can’t access his own emotions. Sound familiar? Elliot leads a group called fsociety that takes down the world’s largest corporation — erasing everyone’s debt. Chaos erupts.

    Mr. Robot actor Rami Malek (from left), writer/producer Sam Esmail and actor Christian Slater, at the Critics’ Choice Awards in Santa Monica, Calif., in 2016. “Their spirit’s in exposing these frauds and abuses by people in power,” Esmail says of hacktivists. “And that’s just something on a human level I respect.”

    Jason Merritt/Getty Images

    Esmail says he is looking at an age-old dilemma. “Do we commit a criminal act for something that we feel is just, even though the consequences could be great?” he says. “That’s such a kind of loaded, huge, but very relevant question today.”

    Brown doesn’t seem interested in examining the moral ambiguity of hacktivist crimes. But he says he is learning from past mistakes. Ultimately, Brown feels that Anonymous was disorganized and lacked leadership.

    So he is designing a software program called Pursuance, which he says will take hacktivism into the future. It will be fully encrypted, anyone could use it to sort through a trove of hacked documents, and it could even be used to recruit a team of hackers.

    Brown says when people tweet and post their opinions on social media it’s just “slactivism.” “The next great act of hacktivism, if it really is going to be great, it has to be an act of reaffirming the idea of civic duty,” he says. He says he wants to provide a mechanism for people who do feel that sense of civic duty to really have impact.

    Brown is ready to be a martyr for the cause if he has to be. He would even go back to prison.

    “I want to be in a position to defeat my powerful adversaries in public,” he says, “where everyone could admire the pluck in which I did it.”

    Brown is casting himself in a starring role in the new world. And in his mind Mr. Robot is no fantasy. It’s what the future really looks like.

  • St.Cyr: "We're Not Starting A 'Trade War' – We're Revoking Prior Agreements Of Preordained Surrender"

    Authored by Mark St.Cyr,

    When it comes to business there’s one group that believes they, above all else, know how business should be conducted at all levels. The problem is most, if not all, have never run a business in their careers. If they have, it’s quite common that it never rose beyond the equivalent of a lemonade stand.

    And yet, it is this very same group that will/have imposed regulations so egregious, that even that simple lemonade stand, that fixture of years past, enabling many a kid their first brush with business – to be nearly regulated out of existence. You know – for the safety of the children and public at large.

    Lord knows how many unsuspecting patrons consumed lemonade over the years and fell dead, or were hospitalized needing to undergo tests as to find out what contaminants may have been present, because there were no warning labels, or listed ingredients affixed to the plastic cups. And to top it off: No license!

    What other possible offense could these business malcontents be involved in that would demand political intervention? Brace yourselves: They actually dealt in an all-cash business model. Obviously those 6 year-olds were just posing as neighborhood children, raising money for a local cause or charity.

    No, what was obvious (via the political eye) was they must be underworld kingpins, extorting unsuspecting passer-byes of their hard-earned money to funnel back into their ill-gotten coffers. Need I say it again? They. Only. Accepted. Cash. (or pocket change) Obviously they must be criminals. So, therefore, they must be stopped! And sadly, for many, they have.

    And who gets the credit for all this “brilliance?” Hint: Politicians, of all stripes.

    The reason for the above is this: That’s about the level of business understanding that many, if not most, of today’s politicians have that negotiated the multi-national, multi-$Trillions of trade deals we are now, supposedly, bound by.

    I know it’s seems over-the-top, however, let me assure you – it is not. For if you think I’m off base? Need I remind you of the most egregious statement made directly to business people which demonstrated today’s political leaders understanding of business; its fundamental relevance to a nation, its economy, as well as its working public. e.g, “You didn’t build that.”

    Sorry, that’s not a capitalist infused statement of argument. That’s a defensive communist infused statement. Period. If you take offense to my statement? I’ll assume you are not, nor have ever, built a business. And you should probably stop reading here. Consider that your, “trigger alert.”

    Over the last few decades politicians of all stripes (e.g., Left, Right, and everyone in-between) have entered the U.S. and its business sovereignty into trade deals that have done more damage to the U.S. and its middle class than anything before it.

    “Free-Trade,” as it is bandied about, is great in theory. However, most “Free-Trade” agreements prior were nothing more than simple documents with general outlines that set a framework that was easily understandable, as well as administered. (i.e., Trade agreements used to be some 20 or 50 pages long. Now, their 2000 to near infinitum. And that’s just for, “Lemonade!”)

    If you look at the results of all the trade agreements over the last few years, one thing is glaringly obvious: The U.S. rarely breaks even.

    In most cases (Hint: See China for one) the counter-party to all U.S. trade agreements usually not only gets the oversized proportions of the deal, but are seemingly inoculated from any violations they commit. i.e., Dumping products into U.S. markets? Complain all you want. Just don’t “rock the boat.” Or should I say, “shipping container ship?”

    Again, one (as in the U.S.) can complain all they want. Does anything ever come of it?

    No. All you’ll hear is some form of “Well, we brought this up to the ___________(insert political body of you choice) and the needed recommendations are a process and will take time, and blah, blah, blah. But we’ll keep up the good fight to get those jobs back, just remember to donate to __________” (fill in part affiliation here.)

    Remember – To a politician: “Talking business, is doing business.” To a business person: “Talking is one thing – bona fide sales, are quite another.”

    Regardless how one feels politically about the current stance being initiated by the administration, what is abundantly clear is the following:

    This is what business looks like when you’re trying to turn around, or right past mistakes, in the midst of a “turn around operation.”

    For those unfamiliar with the term, “turn around operation.” This is what is used to describe the process that a failing business adopts when there’s only two options: (1) Go out-of-business, now. (2) Try to save it.

    Being a former successful “turnaround specialist.” This is precisely (i.e., what everyone is currently mislabeled a “trade-war”) what you do (and need to do) when you’re engaged in the latter. (I’ve expressed a similar point before in an article titled “The media is perplexed because this is what business looks like and they don’t get it.”)

    All prior negotiations are simply either curtailed, rewritten, or thrown into the scrap-heap. Nothing is sacred. Repeat: Nothing.

    Again, we are currently engaged in the latter. And the ones that have benefited in prior agreements, at the expense of the U.S. and its industrial backbone, are naturally going to wail like spoiled children.

    “Free Trade” agreements were meant to be reciprocal, honest, sharing of markets. Otherwise, there is no “Free” anything.

    What’s been taking place for decades is nothing more than a business bloodletting, being forced via a legion of leeches that have done nothing more than negotiate away a nations most fundamental asset. i.e., Its business and industrial might. It’s been a deplorable, disgusting display of nothing more than the equivalent of a bastion of rentier’s greed. This has not been about capitalism, business principles, or ideals at all.

    It’s been nothing more than pure “Wall Street” incentivized greed. The greatest bastion for capital formation is now, nothing more, than a shell game. Literally.

    Most, if not all, of the past agreements have been nothing more than structures of one form or another to fuel the insatiable thirst of what “Wall Street” has now become. i.e., It’s no longer the greatest capital formation vehicle the world has ever known. No, now it’s nothing more than a front running, parasitical infested, algorithmic, headline reading, High-Frequency-Trading, casino. My apologies to casinos everywhere.

    Do not get me wrong, I’m not making any argument in favor of any administration, or politician. That is not what I’m discussing here.

    What I am making clear is this: There’s a difference between opening up a “Trade War” and – just ending prior egregious trade agreements.

    That’s not “War.” That’s called defending oneself. And just as in life at the schoolyard level – The bully doesn’t like when they suddenly find their “bullying” not only unheeded, but rather, they now find the once “bullied” has decided to fight back.

    Again, all we are now engaging is – defending ourselves. That’s a distinction with a mighty big difference. And most of the mainstream business/financial media hasn’t the slightest clue of the differences.

    Wall Street objectives (i.e., wringing every last cent, regardless of the human toll or national cost to its business sovereignty) have done nothing more than incentivize businesses to move operations offshore using the “wage gap,” “regulation gap,” and “environmental gap,” as an incentive to jettison any and all morals of capitalistic fundamentals, and replaced it with some form of grotesque hodgepodge of business maxims which are entirely specious when used improperly.

    All hyperbole? Fair point. So, let’s use another example for comparisons, shall we?

    This time let’s use the media’s go-to patriarch of U.S. business: “Ole Uncle Warren.” Far too many hold this man up as “The Face of what U.S. Business should look like.” Here’s a hint: Here’s what you get with that “face” and a trade deal such as NAFTA.

    I made this point originally back in May of 2014 in the article, “Moving The US Economy Forward By Reversing Its Tax Policies”  when it originally took place. To wit:

    “We hear many on the taxation issue regurgitate so-called “wisdom” or arguments for higher levels of taxes using opinions from academia such as the Krugman-ites, or axioms by none other than Uncle Warren (aka Warren Buffett) as to buttress their claims or stance why they’re unquestionably correct.

    Remember when we were told ad nauseam Mr. Buffett believed in higher taxes? We heard: “Oh his secretary pays more in taxes than he does, blah, blah, blah.” And if Uncle Warren says it, well it must be so. After all, he throws great shareholder parties and plays the ukulele. He’s for the little guy. Yeah, right. Until you actually try to touch his money. For no matter what they say, one needs to watch what they do.

    A little event took place last month that for all intents and purposes resembled a tree falling in the forest for today’s financial media. Fruit Of The Loom™ is closing its plant which employs some 600 U.S. workers in Kentucky and moving the operation to (wait for it….) Honduras. I guess those 600 U.S. workers were doing jobs that people paying lower wages, taxes, and more won’t do. Oh wait, they will. And now Honduras can claim family ties to Uncle Warren. I wonder if Mr. Buffett broke out into a rendition of Cinco de Mayo when he played his annual ukulele solo surrounded by the Fruit Of The Loom quartet?”

    Sure, Mr. Buffet bought FOTL in the early 2000’s when it was in bankruptcy. Nothing wrong there. What’s wrong is his implied song and dance across the media in a willing to pay up, or call for higher taxes in some “good steward of business ” tone. i.e., “I don’t pay enough in taxes, blah, blah, blah.” or some other such drivel.

    The fact of the matter is: If there’s a tax break or incentive that he or his businesses can take advantage of? They’re going to take it, regardless of the economical costs to the people he employed, or the community that was built around it.

    Welcome to, “Uncle Wall Street” priorities, first, via the cover provided by prior trade deals negotiated by “lemonade stand” politicians. Great for them – not so good for the U.S.

    Here’s a question: Do you think those 600 jobs would be gone today (and the devastation to the community that was built around it for years) had the prior “trade agreements” to incentivize such were not implemented? Imagine if “Ole Uncle Warren” didn’t have NAFTA as a useful argument to jettison all those U.S. jobs. Truly contemplate it, for this is just one example that demonstrates what has been taking place across the entire U.S.

    Also contemplate: This was prior (e.g. 2014) to all the tax reversals, incentives, and more coming out today. Think KY would still lose to Honduras in 2018 vs 2014 tax policies, or recent NAFTA calls for renegotiating? Maybe, but then again, they’re already gone so why bother, right?

    Is trying to make those once “Free Trade” incentives or conditions less favorable now entering some part of a “Trade War?” And if it is, why so? Is a country dumping products (Steel is just one) on a market subsidized by its government, flooding its trading “partner” and businesses with unsustainable pricing parameters, with no toleration (actually more like laughing in the face) for trying to protect oneself from such practices “Free Trade?”

    As far as the Ivory-towered academia cabal is concerned that answer is: Yes, yes it is.

    But if you’re an American citizen or business owner? I would garner to assume your view is a little bit different, is it not? (not to mention if you are one of those 600 that were jettisoned.)

    So now – it’s China’s turn, along with a growing list of others. (E.U. springs to mind)

    Will there be fallout? Economic upheavals? Financial chaos? Wall Street bedlam?

    The answer is more than likely, Yes, too all, and then some.

    But what’s the alternative? Here’s one:

    Further bloodletting of U.S. industrial and business might – and a further – if not complete – obliteration of its workforce. All at the expense of remaining in prior “trade agreements” made by politicians that don’t possess even a “lemonade stand” understanding of business. Agreements that did nothing more than gut the U.S. of its once ingrained competitive advantages, enabling a cabal of international pols and business leaders to become rich beyond compare.

    That’s not capitalism – that’s oligarchy. Pure and simple.

    But there is an alternative, which is this:

    Simply rip up all prior agreements – and start anew the best we can. Even if it means, yes, I’ll dare say it: Tariffs. Then, suffer through the healing process best we can as we rebuild.

    That’s the two decisions at the core of any turn around plan. Hint:

    Only the latter has a chance of working. It’s not easy, and at times feels utterly frightening, but that’s the cost. You either pay it now, or slowly bleed away into oblivion. And if that means we’re going to enter a trade war as most Ph.D’s argue? Then I say…

    “Let’s Roll!”

  • Jetsonian Era Looms: Boeing Is Preparing To Launch Flying Taxis

    It is hard to believe the Jetsons, an American animated sitcom produced by Hanna-Barbera, originally airing in 1962, portrayed the life of a space-age family living in 2062 in a futuristic wonderland of elaborate robotic contraptions and whimsical inventions.

    It is now 2018, and the year 2062 is less than 44-years away, but already a handful of the Jetsons’ contraptions exist including smartwatches, smart shoes, drones, 3-D printed items, holograms, robotic help, jetpacks, and even flying automobiles.

    In particular, the fantasy of flying automobiles zipping around the skies of America could be taking flight within the next ten years.

    That is according to Boeing CEO Dennis Muilenberg, who said, “it will happen faster than any of us understand,” in a Bloomberg interview.

    “Real prototype vehicles are being built right now. So the technology is very doable,” he added.

    Muilenberg said Boeing has been preparing for the new era of flying urban vehicles, and his company has been designing what would be the “rules of the road for three-dimensional highways” that carry autonomous flying taxis.

    Bloomberg claims autonomous air taxis and parcel-hauling drones have the potential to disrupt the transportation industry as we know it, with Boeing and Airbus SE already situating themselves for an era of flying automobiles. Muilenburg claims the window to reshape the transportation industry is now. “Fleets of self-piloted craft could be hovering above city streets and dodging skyscrapers within a decade,” he exclaimed.

    According to the latest research by Deloitte, more than a dozen drone and flying automobile manufacturers have already passed conceptualization/design phase, and a majority of the manufacturers are currently exiting the prototype stage into the testing phase, with most manufactures targeting launch/delivery by 2020.

    “If safety and regulatory hurdles are cleared, passenger drones are expected to get wings by 2018–2020, and traditional flying cars by 2020–2022, while revolutionary vehicles could be a reality only by 2025,” Deloitte reported.

    In the second half of 2017, NASA’s Aeronautics Research Mission Directorate (ARMD) started examining the feasibility of what the government space agency calls “Urban Air Mobility.”

    Here is how NASA defines Urban Air Mobility:

    Our definition for UAM is a safe and efficient system for air passenger and cargo transportation within an urban area, inclusive of small package delivery and other urban Unmanned Aerial Systems (UAS) services, which supports a mix of onboard/ground-piloted and increasingly autonomous operations.

    “NASA has the knowledge and the expertise to help make urban air mobility happen,” said Jaiwon Shin, NASA’s associate administrator for aeronautics. “We plan to conduct the research and development, and test the concepts and technologies that establish feasibility and help set the requirements. Those requirements then serve to make using autonomous vehicles, electric propulsion, and high density airspace operations in the urban environment safe, efficient and economically viable.”

    Boeing signaled that it was serious about flying taxis last year by acquiring Aurora Flight Sciences, whose projects include a new flying taxi it is developing with Uber Technologies Inc, said Bloomberg. Other partners on the project include Textron Inc.’s Bell Helicopter and Embraer SA, a Brazilian aerospace company.

    Bloomberg details the major players who are becoming more visible on the playing field of developing urban flying taxis:

    Aurora has been inventing autonomous vehicles since the late 1980s, and its portfolio of novel flying machines includes a two-seat robotic copter known as an eVTOL (an abbreviation for electric vertical take-off and landing). For its rideshare of the not-too-distant future, Aurora plans to whisk passengers between rooftop “vertiports.” Test flights could begin as soon as 2020 in Dallas and Dubai, according to the company.

    Others are also rushing rotorcraft concepts to market. Vahana, the self-piloting air taxi developed by A3, Airbus’s tech-centric Silicon Valley outpost, completed its first test flight on Jan. 31. Intel Corp. and EHang Inc. are also testing their flying vehicles.

    But the next generation of Uber and Lyft Inc. vehicles can’t arrive by air until manufacturers and regulators figure out how to keep them from bumping into buildings, commercial planes, personal drones and each other. That requires leaps in artificial intelligence and sensor technology from today’s personal drones, which mostly fly within sight of operators.

    “Right now, what we’re transitioning from is a hobbyist industry to a commercial industry,” said Darryl Jenkins, an aerospace consultant specializing in autonomous vehicles.

    Deloitte explains there are numerous potential applications for these new forms of urban mobility vehicles:

    Bloomberg mentions U.S. and foreign drone manufactures must demonstrate that catastrophic failures are so remote that they will not happen in a billion flights. Unless if Congress or the FAA eases regulations on standards for autonomous flying vehicles. Boeing and other manufacturers would have to show regulators that their high-tech flying taxis are incredibly reliable.

    “It’s extremely costly to certify new aircraft, even when you’re certifying it for a well-established use and with well-established rules,” said Steve Wallace, a former FAA official who oversaw accident investigations and also worked in the agency’s certification branch. “Here we’re trying to open up a whole new use where there aren’t any rules. That’s an enormous task.”

    Muilenburg said Boeing is heavily investing in sense-and-avoid systems and other technologies to prevent airborne disaster. “We are making investments there,” he said. “The autonomous car ecosystem is making investments there.”

    Since Muilenburg took control of Boeing in 2015, he has expanded investment dollars into futuristic aircraft and created a venture capital arm called HorizonX to further the development of hybrid-electric propulsion.

    As Boeing and other major corporations usher in a Jetsonian era of flying automobiles starting in 2020 and beyond. Nearly every automaker and major technology companies are pouring billions into the development of flying automobiles. Will this trend be another bubble, as we have seen many in this Central-Bank-free-money-anything-goes-induced environment, or is there something legitimate here?

  • "Sex Sells Cigarettes, But Fear Sells Government"

    Authored by Robert Gore via Straight Line Logic blog,

    Reality doesn’t give a damn how you feel.

    A long time ago, I was talking with a woman and the discussion turned to abortion. I don’t remember our exact words, but she said something to the effect that she was viscerally opposed to anything that curtailed women’s right to abortions. I do remember her use of the words “visceral” and “viscerally” because she used them repeatedly, emphasizing her stance.

    I asked if the right to control one’s body implied a right to control one’s mind, and the right to control the products of one’s body and mind. Should freedom be general, or does it apply only to the specific case of freedom to abort a fetus? I didn’t get a response, other than one last exclamation that she was viscerally opposed to anything that curtailed women’s right to abortions.

    The dictionary defines “visceral” as: “Relating to deep inward feelings rather than to the intellect.” I was trying to get the woman to define the principle supporting her assertion and perhaps extend it to other issues. She had a deep inward feeling, that’s all, no principle, a product of the intellect.

    It was some years before I realized that “visceral” was a key to understanding the world. Its definition is not just a definition, it’s a description of how most people perceive and interpret reality most of the time—with their emotions rather than their intellects.

    That isn’t an original insight, it’s been around for centuries (most of my “original” insights have been around for centuries). Aristotle defined rhetoric’s three persuasive appeals as logos, pathos, and ethos: the mind, the emotions, and the conscience.

    The leaders throughout history who incited their followers to storm ramparts, mount invasions, or march on crusades appealed to pathos—emotions—hatred of the enemy and love of family, clan, country, or God. The led only encountered the often-grim realities after they’d signed up.

    Emotional appeals kicked into high gear with the development of mass markets and advertising. The first tenet of marketing copywriting is you sell to emotions, not reason. Reasons come later, after you’ve emotionally hooked the mark prospect and he is rationalizing his decision.

    List a car’s many fine features and make bullet-proof logical arguments that they’re better than anybody else’s and you might sell a few. Show the car in front of a high-class hotel, the owner holding the door for a smoking hot babe, her breathtaking legs emerging seductively from the car as he takes her hand, and you’ll sell a lot more.

    Naturally this primacy of emotion became part of politics, which has become a playpen of intellectual infants demanding the world take note of their visceral emotions and respond to them…now! The playpen hosts much of the media, especially social media. In education, children can progress from preschool to graduate programs without ever leaving the playpen, and without ever leaving childhood.

    Only by completely isolating one’s self can one escape the “demands” of those who perceive reality through the lens of their oh-so-precious feelings. Their paramount demand: the world acknowledge and kowtow to those unique and special feelings. Primacy of emotion is their privilege, and anyone who questions it (questions being the weapon of the rational) is subject to scathing attack. They are viscerally visceral.

    There’s one obvious problem. If everyone’s feelings are uniquely special and the object of justifiable self-absorption, who’s left to acknowledge and kowtow to everyone else’s unique and special feelings? The answer is straight from Animal Farm: some feelings are more special than others.

    The feelings on display during CNN’s Parkland shooting town hall were extra special. The feelings (and thoughts) of those who oppose gun control were shouted down. The “gun control debate” is a phrase much in the media recently. As the town hall demonstrated, there’s no “debate.” It’s passion for the “right” side uber alles, and the other side had best just shut up and kowtow.

    It’s not clear what the implicit “or else” is, maybe a collective holding of breaths until everyone’s blue, but there’s no mistaking the snarling anger. The more cowardly captains of corporate America caved.

    However, there’s a much bigger problem with self-centered primacy of emotion: while other people may respond to your emotions, reality doesn’t give a damn. A strong desire for food, even if fervently expressed, won’t make a garden grow. Hoping for a windfall doesn’t prevent poverty. Cursing blizzards or droughts doesn’t change the weather. Wishing doesn’t make it so.

    It would be instructive to check the majors of students drawn to today’s fashionable campus demonstrations. Engineering, chemistry, biology, physics and the other hard sciences are undoubtedly underrepresented. Students in those fields must apply rigorous and unremitting logic to unlock reality’s mysteries—hard and demanding work—or they drift to other disciplines. Those who succeed learn to check their feelings at the door. If they think at all about their epistemological opposites raising a ruckus across campus, it’s probably with a mixture of wonder and contempt.

    Abandon reason and one emotion dominates: fear. Scared people are not rational, they’ll buy virtually anything that promises to alleviate their fear. Every totalitarian, every proponent of curtailing freedom, knows this. It’s the equivalent of the smoking hot babe: fear sells government.

    How will gun control or confiscation stop criminals, who by definition don’t observe laws, from shooting up schools, churches, movie theaters, and other places where people peaceably assemble? Those places are generally gun-free zones, wouldn’t it be better if the shooters weren’t assured that nobody would fire back, so that maybe they’d think twice? The gun controllers ignore such questions. Something must be done now, they screech. Pass more laws so we’ll all “feel” safer. (Anytime someone sells a law touting its benefits for “all,” it’s a rock-solid bet the only beneficiary will be the government.)

    Fear is not confined to one part of the political spectrum. It sold the Patriot Act and the like, gargantuan defense budgets, global military intervention, the surveillance state, the militarization of local police departments, and all manner of regulatory intrusion and extortion. Tell people you’re protecting them and you can do damn well whatever you want to them. It’s doubtful Americans will figure it out even as they’re herded into protective and preventative detention facilities, aka concentration camps. You can’t be too safe.

    Reason is the toughest sell out there. As the advertisers know, what passes for reason is usually emotion-based rationalization. Yet, reason always wins. It has an unbeatable ally, reality, the anchor for those who live their lives guided by their intellects rather than their emotions.

    Remember the tears, screaming, and general hysteria after Trump won the election? Imagine when our system, built as it is on wishful thinking, finally collapses. Imagine confronting these hysterical creatures. You, your family, and friends saw what was coming and are riding out the storm. They are screaming, demanding that you take care of them. However, you have the firearms they eschewed, so demand is all they can do. “Imagine how we feel!” they scream. You stare at them with complete indifference.

    “Nobody gives a shit how you feel.”

    Collapse will have its compensations.

  • China Confirms Further Economic Slowdown: Highlights From 2018 Government Work Report

    In the latest confirmation that as part of its grand deleveraging campaign, China’s economy is set to slow further in the current year, Beijing has set a 2018 growth target of around 6.5%, omitting an intention to hit “a faster pace if possible”, as the world’s largest nation continues its push to ensure financial stability. While the target of 6.5% is the same as last year, Bloomberg notes that the statement excludes an objective for output growth to be “higher if possible in practice” as it did in 2017.

    “The omission from the GDP growth target of ‘higher if possible’ and the new lower budget deficit target suggest slower growth and a fiscal drag,” said Eurasia’s Callum Henderson. “This makes sense for China in the context of the new focus on financial de-risking, poverty alleviation and environment clean-up, but is less good news at the margin for those economies that have high export exposure to China.”

    China’s newly downgraded growth target was released Monday ahead of Premier Li Keqiang’s report to the National People’s Congress gathering in Beijing.

    While China’s GDP surpassed 2017’s target with 6.9% growth, the first acceleration since 2010, economists forecast a moderation to 6.5% this year amid the ongoing deleveraging drive and trade tensions with the Trump administration. To be sure President – or rather Emperor – Xi Jinping has made it clear he will accept slower growth in his push to curb pollution, poverty and debt risk at a time when the world’s second-largest economy is on a long-term growth slowdown. As a result, numerical GDP targets have been de-emphasized in favor of higher-quality expansion since last year, according to Bloomberg.

    The government also signaled its intent to continue efforts to slow debt growth, and set the budget deficit target markedly lower, at 2.6% of GDP, down from 3% in the past two years; news of the proposed reduction in borrowing sent 10-year sovereign bonds futures higher last week after Bloomberg reported the plan to reduce the budget deficit target.

    Commenting on the proposal, Bloomberg’s Asia economist Tom Orlik said that “Li’s plan for the year is consistent with a moderate slowdown in real growth,” noting that “there were signals of significantly reduced fiscal support for growth, and lower ambitions on capacity closures in the industrial sector.“

    Furthermore, authorities reiterated their prior language saying prudent monetary policy will remain neutral this year and that they’ll ensure liquidity at a reasonable and stable level. The report said broad M2 money-supply growth would remain moderate, without including a numerical target as had been previously the case. M2 growth slowed to a record low 8.2 percent in December, down from more than 11 percent a year earlier. A separate report from the National Development and Reform Commission said M2 growth would remain roughly in line with last year’s real growth rates.

    “We will improve the transmission mechanism of monetary policy, make better use of differentiated reserve ratio and credit policies, and encourage more funds to flow toward small and micro businesses, agriculture, rural areas, and rural residents, and poor areas, and to better serve the real economy,” state media reported, citing the work report. The report also said that an increase in the  thresholds for personal income taxes was planned.

    Below courtesy of Bloomberg are the other key highlights from China’s government work report released today in Beijing.

    Import tariff cut (or did Trump win the trade war already?):

    • China to lower import tariffs for vehicles and some consumer goods

    Internet/Telecom:

    • China to cancel domestic Internet data roaming fees in 2018
    • China to cut rates for mobile Internet services by at least 30% this year
    • China to expand free wifi spots in public areas
    • China to lower broadband charges for families and enterprises

    Opening up:

    • China to expand opening to foreign investment in telecom, new energy vehicle, healthcare and education

    Tax and wages:

    • China to cut taxes for enterprises, individuals by 800b yuan this year
    • China to lift thresholds for for levying personal income taxes, without elaborating
    • China to adjust level of minimum wages reasonably this year

    Property:

    • Govt reiterates that housing is not for speculation and aims to develop housing rental market
    • China to steadily push forward legislation of property tax, without elaborating

    Capacity Cut:

    • China to cut steel capacity by 30m tons this year; to remove 150m coal capacity

    Financial regulations:

    • China’s overall economic, financial risks controllable
    • China to boost coordination among financial regulators
    • China totally able to prevent systemic risks
    • China to improve regulation for shadow banking, Internet financing

    Source: Bloomberg

  • Visualizing How Money Is Spent By Different Income Groups

    If you started making twice the amount of money that you do today, how would your spending habits change?

    Consider if the tables were turned, and you instead were reduced to half of your current income. Where would you likely make cuts to spending?

    As Visual Capitalist’s Jeff Desjardins points out, the reality is that the money you have coming in has big implications on how expenses get prioritized – and so it’s interesting to see how people in different income brackets allocate what they have.

    Courtesy of: Visual Capitalist

    Visualizing Spending

    Today’s series of graphics come to us from data visualization expert Nathan Yau at FlowingData, and they show how money is being spent by different income groups.

    It uses data from the 2016 Consumer Expenditure Survey, an annual survey by the Bureau of Labor Statistics. Meanwhile, embedded words in the graphics come from Yau, as he makes observations on the data.

    To Buy or Rent a House?

    How do income groups differ in spending for housing?

    Housing expenditures

    Housing Expenses

    How is money spent on utilities, furniture, and other household expenses?

    Household expenditures

    Food Expenses

    Do income groups spend more eating at home, or eating out?

    Food expenditures

    Travel and Transportation

    The cost of vehicles, gas, and other travel expenses.

    Transportation expenditures

    Health Expenditures

    What about money spent on health insurance, services, or drugs?

    Health expenditures

    Pensions and Social Security

    Lastly, the money going to retirement, pension, social security, and insurance plans.

    Pensions expenditures

    For more data analysis, as well as many other great visualizations on income, we highly recommend checking out FlowingData.

  • Iran Says It Will Give Up Its Missiles When The US Gives Up Its Nukes

    Via Middle East Eye,

    Iran’s armed forces spokesman said on Saturday that there can be no talks on the country’s missile program without the West’s destruction of its nuclear weapons and long-range missiles.

    “What Americans say out of desperation with regards to limiting the Islamic republic of Iran’s missile capability is an unattainable dream,” Brigadier General Masoud Jazayeri told the official IRNA news agency.

    “The condition for negotiations on Iran’s missiles is the destruction of America’s and Europe’s nuclear weapons and long-range missiles.“

    Jazayeri said US criticism of Iran’s missile program was driven by “their failures and defeats in the region”.

    US President Donald Trump has threatened to tear up a 2015 nuclear deal between Iran and world powers unless more is done to curb Iran’s missile program.

    European governments have been scrambling to appease Trump and keep the deal intact, and have voiced increasing concern over Iran’s missile program. 

    French Foreign Minister Jean-Yves Le Drian, who is due to visit Iran on Monday, said last month that Iran’s missile program and involvement in regional conflicts needed to be addressed if it “wants to return to the family of nations”.

    Ali Akbar Velayati, foreign policy adviser to Supreme Leader Ayatollah Ali Khamenei, criticized Le Drian’s position on Saturday, just two days before they are expected to meet.

    “Iran’s defence program is not the concern of other countries such as France, that they should come and tell us what missiles we can have. Do we tell France how it should defend itself?” he told the semi-official ISNA news agency.

    “If Le Drian’s visit is aimed at reinforcing our relations, he would do well to avoid negative positions,” Velayati added.

  • It's Not A "Conspiracy Theory": Here's How Central Banks Actively Suppress The Price Of Gold

    Alhambra Investment Partners CIO Jeffrey Snider returned to Erik Townsend’s MacroVoices podcast this week to discuss one of his favorite topics: How central banks’ use gold lending to manipulate their balance sheets, and also to manipulate the broader market for precious metals by sheer dint of their size, and willingness to buy and sell without any consideration for the price.

    Their conversation begins with Snider explaining the history of “gold swaps” between central banks that helped birth the concept of fractional reserve lending.

    Gold

    The first “gold swap” conducted between the Federal Reserve and the Bank of England: The Fed handed the BOE $200 million in bullion through the New York Fed; in exchange, the BOE gave the Fed a “gold receivables” in the same amount. This is essentially an IOU that could (in theory, at least) be cashed in for gold, but allowed the Fed to keep the gold deep in its vaults. As Townsend explains, the gold is being taken out of the accounting for the balance sheet, but it’s not being removed from the accounting.

    Again, in theory, one could argue that these gold receivables were, in fact, “as good as gold” because the default risk from a counter party central bank is, effectively, zero.

    Essentially, what happened was the Federal Reserve Bank of New York on behalf of the Federal Reserve system made $200 million of gold bullion available to the Bank of England for its disposal in whatever transactions it might take in defending sterling at that pre-war parity price. What’s important about that is that it aids both sides of the equation.

    Because the way a gold swap works is that, essentially, the central bank agent that is providing the gold exchanges it for what’s called a gold receivable.

    If you look at Slide 5, for example, I’ve sketched out roughly what this gold swap meant. $200 million in gold was made available to the Bank of England, which it would then sell in the market for sterling at the price that it wished to defend. They put the sterling currency into an account in London on behalf of the Federal Reserve Bank of New York.

    So what really happened was gold disappeared from New York and ended up as cash in the UK denomination in London. But, for accounting purposes, the Federal Reserve Bank of New York showed a gold receivable where gold used to be.

    …

    Because if (for whatever reason) the Federal Reserve Bank of New York needed its gold back, there was sterling in an account where it could theoretically buy it back. So the gold receivable was taken as equivalent to actually having bullion on hand in a vault in New York City.

    So both parties were satisfied. The Federal Reserve Bank of New York got to continue reporting the same amount in its possession, while the Bank of England was supplied additional metal in order to help defend the sterling at pre-war parity.

    As anybody who lived through the financial crisis would remember sometimes credit-risk analysts ignore have a tendency to ignore black-swan tail risks like the prospect of a central bank default. We delved into this topic in greater detail about a year-and-a-half ago when Carmot Capital’s George Sokoloff explained why even the most sophisticated hedge funds tend to get slaughtered during market shocks.

    The way that the accounting works in the gold swap scenario outlined above is the central banks are basically pretending the Fed didn’t give its gold to the BOE…yet, there is still only the one $200 million slug of gold…it didn’t just magically double. In a way, this feat of financial engineering echoes China’s massive “rehypothecation” fraud which we’ve critiqued time  and time again…

    Two

    It’s also important to remember, too, that all of this was done for political purposes: In the aftermath of World War II, Winston Churchill briefly brought the UK back to the gold standard. But to prevent a destabilizing spike in volatility, the central bank needed the gold reserves to defend the peg in the open market.

    Knowing the roots of fractional reserve lending will help reframe like our stories about the missing gold at the Fed. Even Snider admits there’s ample room for these so-called “conspiracies” to flourish…

    …Because, as he admits, we don’t know the difference between gold and gold receivables – though that is something that could be determined via a simple audit..

    That’s the way this works. And of course it opens the door to all sorts of conspiracy theories. Because, obviously, people have argued, and do argue still, that if there’s more receivables than gold, then there’s no gold left. And how would anybody know the difference?

    And the point of fact is we don’t know the difference. We don’t know how much gold has ever been swapped out. And how much gold remains. Because nobody has ever been required to make a distinction there.

    Our interest here is defining why that would be. Why are central banks interested in doing this kind of transaction? Other than the fact that they are intentionally trying to mislead the public, which I don’t think is the case.

    Again, there are legitimate reasons for all of these things to happen. You may not agree with why they’re being done, or the times of when they’re being done, but there are legitimate reasons for this.

    Snider goes on to explain how these gold swaps led to the creation of the gold forward rate, a strategy that many smaller central banks employ to turn their gold reserves into a profit engine. Essentially, central banks allow gold miners to hedge their exposure by fronting them the gold to sell short before they ever pull the metal out of the ground.

    The central bank receives a small interest rate, the miners are hedged and capitalized – everybody is happy – or at least that’s what one might suspect at first brush.

    In reality, the central banks’ involvement in the gold market is considerably more fraught – in ways that many mainstream analysts aren’t yet ready to consider.

    For instance, as Townsend points out, gold bugs have for years expounded to anybody who would listen their theory about how central banks surreptitiously intervene in the gold market to suppress the price of the precious metal. As anybody who trades gold has also undoubtedly noticed that often we get what traders call “gold pukes” – sudden, sharp declines in the price of gold – often around 8 am.

    Because central banks are the largest logical price-insensitive participants, many have blamed them for this phenomenon.

    Snider said that, while he agrees that central banks are, in effect, manipulating the price of gold when they intervene in the market, there are more plausible explanations for why central banks might do this – aside from being motivated to manipulate the price of gold.

    And there’s no legitimate reason for them to actually take an interest in price, because the gold leasing arrangement is, by its very nature, negative in price. For reasons that have nothing to do with monetary policy of any central bank around the world. Because it’s dislodging previously off-market stored gold onto the marketplace. That’s a key point to remember moving forward.

    When this stuff happens, when there’s an uptick in lending and leasing for whatever reason, it is price negative. It has nothing to do with manipulation. It’s just the natural supply and demand mechanics of the way these things are set up.

    In short, central banks are doing this not because they’re intentionally manipulating the price of gold. Rather, the manipulation is an unavoidable side effect of their gold leasing arrangements…

    Three

    Finally, Townsend and Snider discuss the latter’s theory about how major turning points in gold’s long-term price trajectory have been influenced by anomalies in the eurodollar market, as depicted in the chart above…

    There are a couple of anomalies – or aberrations, whatever you want to call them – in
    the gold market that popped up in especially 2010. Remember, 2010 is supposed to be a year of recovery. Not just in the economy, but in the financial markets. We had ZIRP (zero interest rate policy) in the US, we had ZIRP in Europe. We had QE in the US. We had all of these positive monetary factors.

    And yet, in the middle of 2017, it came to light that the Bank For International Settlement, which is the central bankers’ central bank, had swapped 346 tons of gold with ten European banks in December of 2009 and January of 2010. And people couldn’t figure out why that was.

    Because, again, things are supposed to be recovering. Why the hell are they taking gold out of the hands of European banks? And the reason was, of course, continued funding anomalies in dollar markets. What was reported along the way, as these things became more and more investigated, was: What had happened during the bull market in the 2000s was that people – European customers in particular – who were interested in buying gold because gold was in a bull market, may not have intentionally been buying gold for gold property. They had been buying gold – physical metal – and depositing it with their local bank for custody.

    …

    But an unallocated account was a very big difference in terms of legalities and who actually owns the metal. An unallocated account means that you’re just depositing the gold with the bank. The gold then becomes a liability with the bank. And what they give you back in return is essentially a warehouse receipt. Not actual title to the metal.

    All the bank is saying is that if you ever ask for your metal, we’ll give you metal back. Not necessarily the specific bars or the specific whatever that you deposited.

    And what that allowed was, in times of stress and strain, because that metal became a liability at the bank and not a separate constructive bailment as an allocated account would be, these European banks, including Swiss banks, found that they had a deep pool of unallocated gold that was their own liability that they couldn’t realize.

    Again, their only liability was that they would have to put the same kind of metal or the same amount of metal back if their customers ever asked for it back.

    What happened in 2010, as the European crisis wore on and got worse, was that these
    European banks started to appeal to those stores of unallocated gold. They started to motivate them into the lending and leasing arrangements, which tended to be negative in price the more that happened.

    Where that really broke out was in later 2011 as the dollar crisis worsened that year.
    September 6, 2011, the Swiss National Bank shocked the markets by pegging the franc to the Euro, essentially trying to get away from the dollar balance. Which triggered all sorts of responses across US dollar funding markets.

    And you could see, once again, another big, massive gold puke.

    In summary, once again, bank’s forward-lending agreements had a massive impact on the gold market because of the price insensitive nature of the transactions…

    …But, of course, that’s totally different from banks “intentionally” dumping on the price of gold.

    Listen to the whole interview below:

     

Digest powered by RSS Digest

Mar 04

Today’s News 4th March 2018

  • Zuesse: America's News Media Foment Hate

    Authored by Eric Zuesse via The Strategic Culture Foundation,

    Mimiccing the movie 1984, in its two-minute section “Two Minutes of Hate,”…

    …the US-installed Ukrainian regime on Russia’s doorstep, will soon be debating a bill to make hate of Russia obligatory to be inculcated into all Ukrainian children.

    The Hill, on 9 November 2017, had the extraordinary courage to publish an opinion-piece that condemned the mainstream news-media’s charges that reports of widespread “neo-Nazi formations in Ukraine” are nothing but “Russian propaganda.” An editor who would accept a submission like that at such media as the Washington Post, New York Times, New Yorker, The Atlantic, or just about any other in America, would probably be fired or else re-assigned, so as to prevent a repeat.

    It’s the way to achieve mass-indoctrination, which the Ministry of Truth specializes in. Thus, among the reader-comments to that bold article, the top-listed one under “sort by best” (in other words, the most popular) was the anti-Russian “Have you counted how many neo-Nazis are in the Russian army as well?”

    But there is actually nothing at all in Russia which even begins to approach the outright nazi displays and rallies that are routine in today’s Ukraine, and some of which Ukrainian marches are publicly displaying symbols from Hitler’s regime — in fact, it’s all outright illegal in Russia, which had lost (by far) more of its citizens to Germany’s Nazis (13,950,000, or 12.7% of its population) than did any other country (except Belarus — another state within the Soviet Union — which lost 25.3% of its population). (The US, which might be where the obvious bigot who wrote that reader-comment resides, lost 419,400, or 0.32% of its population.) Metaphorically spitting like that, onto such millions of victims’ corpses, is to be expected from bigots, and from the fools who “up-vote” them. Furthermore, the US CIA provided protection and employment in Germany for top members of Hitler’s equivalent to the CIA, the Gehlen Organization. (America’s CIA continues flagrantly to violate the law and hide from Congress and the American people crucial details of its relationship with the Gehlen Organization.) By contrast, the Soviet Union was unremitting in killing Nazis whom it captured. Understandably, Hitler is admired far less in Russia than in today’s far-right United States, despite any lie such as “Have you counted how many neo-Nazis are in the Russian army as well?”

    Stupid indoctrinated readers can’t change the facts about the post-coup Ukraine, which are documented not only in that excellent opinion-piece at The Hill, but by innumerable thousands of uploaded videos and other evidences of the nazism of the US-imposed Ukrainian regime. In fact, under US President Barack Obama, whose Administration imposed this nazi government upon Ukraine, the US Government was one of only 3 in the entire world who stood up publicly for nazism at the U.N. The other two nations were Ukraine itself (this vote having occurred after the coup) and Canada. Then, under the current US President Donald Trump, the US was again one of this time the only 2 nations in the entire world who stood up publicly for nazism at the U.N. The other country on that occasion was Ukraine itself. Thereby, Trump took upon himself, Obama’s nazi mantle. And, under Trump, there’s now supply of US weaponry directly to proudly and publicly nazi battalions in Ukraine. Even Obama wasn’t so bold as to do that. FDR would cry, but the Ministry of Truth has prohibited the public even to know about the reality.

    Even UK’s supposedly anti-nazi BBC routinely states such baldfaced lies as “Ukraine is emphatically not run by fascists”, though clearly it is run by the worst type, racist fascists, ideological nazis, and they do typically nazi and outright horrendous things, which the Government that the US imposed refuses to punish anyone for having done. That’s because what was done is what the US Government itself had wanted them to do. It had put these people into power.

    Here are yet further evidences, that the silence about this fact – silence by virtually all US and allied ‘news’ media, about Ukraine’s US-imposed nazism – is a scandalous proof of the utter corruptness of the US-and-allied ‘news’ media: “Nazism of Ukraine’s Western-Backed Government Is Hidden by Western ‘News’ Media”

    The US regime foisted nazi rule on Ukraine, and backs the ethnic-cleansing program there to kill or else cause to flee from Ukraine into Russia the residents in Ukraine’s far-eastern Donbass region, in which over 90% of the people had voted for the democratically elected Ukrainian President that the US regime overthrew and replaced by fascists and nazis, in February 2014. Obama needed to get rid of those intensely anti-nazi voters, because otherwise the regime that he installed wouldn’t have lasted beyond the first post-coup election. That’s the purpose of ethnic cleansing – to get rid of unwanted voters. Western ‘news’ media portray it (when they do) simply as mass bigotry, but the installed political thugs have actually organized and armed it, in order to retain their power by getting rid of their political opponents’ voters. (Obama required it, in this case, because Ukraine has Europe’s longest border with Russia, and is thus ideal for posting US missiles).

    But instead of The West’s recognizing publicly that the ethnic-cleansing program exists, The West’s propaganda-vehicles (called ‘news’ media by Big Brother) accuse Russia of ‘aggression’ for arming Donbass’s residents and bringing in food and medicine so that these people can stay there instead of emigrating into Russia. Russia is doing what it can to help them, but turned down the residents’ pleas to become admitted as a new region into Russia. Russia had gotten hit badly enough with America’s sanctions which resulted from Russia’s taking on the burden of protecting and allowing to become Russians again (as had been the case until the Soviet dictator in 1954 transferred them to Ukraine) Crimeans.

    So: this ugly mindless and misinformed hate, which America’s ‘news’ media foment by constant lies and distortions against Russia, is being fomented for a reason: conquest. Conquering Ukraine wasn’t enough — the US regime wants, ultimately, to conquer Russia; and, so, that’s what all of this hate build-up is actually about. It’s the prelude to an invasion. Otherwise, it wouldn’t be done, at all. Invasion of Russia, is the sole sensible ultimate reason.

    The American people would not tolerate, even for just ten seconds, Russia overthrowing Canada’s Government – our next-door neighbor – in order to place missiles on our border, but people who say such things as “Have you counted how many neo-Nazis are in the Russian army as well?” are, in effect, approving of our country doing that to the Russian people.

    Ukraine is Russia’s equivalent to our Canada. And, America’s media constantly feed this stupidity and hate, by Americans against Russia, and blindly ignore the hate that the US regime has already unleashed in Ukraine, against Ukraine’s next-door neighbor, in preparation for an invasion of Russia. Never has the US sunk so low, at least not in modern times, but the direction in which we are heading is toward even worse, even lower than now, even more like Hitler’s Germany. Candidate Trump had promised to be the non-Obama, but turns out, on the most important matter of all, to be instead the super-Obama. This is playing with fire — a global fire. And the US Government is doing it with the most-evil intent imaginable. And the media play right along with it, and they whip the hatred even higher than they already have done. 

    Things aren’t looking good. There are too many lies, for any intelligent person to be able to feel at all comfortable about where we’re headed.

    The sound of those two minutes of hate is becoming unbearable, for anyone with the ears and brain to hear it. It’s now all around us.

  • 'Rent-For-Sex': Landlords Exploit Thousands Of Broke Millenials

    It is now time to sound the alarm bells on the economic prospects for the Millennial Generation in the Western world, but more importantly, in the United Kingdom. This generation of citizens aged 18 to 36, is the first in modern developed economies on course to have a lower standard of living than their parents.

    Housing affordability and a decaying job environment are some of the most pressing issues affecting Millennials. The future is bleak for this avocado and toast generation, as Western world economies have likely plateaued regarding economic growth. Surging debt and rising government bond yields are producing an environment that could lead to more hardships for this lost generation.

    Landlords in the United Kingdom have taken full advantage of broke Millennials by offering “adult arrangements” for a roof over their heads. Yes, you heard this correctly, Millennials are trading sex for a place to sleep — unearthed in a new documentary by the British Broadcasting Corporation (BBC), which provides a chilling insight into just how bad the Millennial generation has it.

    BBC reporter Ellie Flynn went undercover to expose the scale of the ‘Rent For Sex’ issue in the United Kingdom, in which landlords on Craigslist are advertising “free” accommodation in exchange for sexual acts.

    Ellie portrayed herself as a broke, 24-year-old nursing student with very little alternatives. She confronted one man in a Newcastle cafe who defended his actions and told cameras: “I’m not doing anything wrong… it’s not just about sex, it’s about companionship.”

    “BBC Three’s Ellie Undercover: Rent For Sex also met up with a landlord who had built a log cabin in his garden where tenants could sleep if the agreed to have sex in return for a ‘physical arrangement once a week,” the Daily Mail reported.

    “The man offers to show Ellie around after saying: ‘That’s where you sleep, it’s a log cabin, alright,” the Daily Mail reported.

    He later denied knowing the practice of asking for sex in exchange for housing is a serious offense in the United Kingdom, saying: “I don’t know, I can’t truthfully answer that .”

    One landlord put Ellie in touch with a former tenant who told of “how he tried touching her while she was staying rent-free with him,” said the Daily Mail.

    “I would just feel almost paralyzed every time he tried to touch me but he didn’t force himself on me,” said the unnamed woman.

    The woman added: “The idea of consent gets mashed up because a woman thinks this is the exchange I have to give this man in order for me to have a roof over my head.”

    In fact, the number of listings on Craigslist and social media websites offering rent for sex is exploding. Latest figures from the Housing Charity Shelter are absolutely mind-numbing, more than 250,000 women over the last five years have been asked for “adult arrangements” in exchange for housing.

    UK Millennials lack a living wage, therefore, this generation sees nothing wrong in offering their bodies to landlords for a roof over their heads. Apparently, the smartest generation to ever step foot on planet earth is the first generation since the 1950s to fail to do better than their parents, as this chart shows:

    The homeownership rate for UK Millennials is so low that these levels have not been seen since World War I:

    According to the Office for National Statistics, millennials have largely been priced out of the real estate market as prices soar above 2008 levels.

    Over the same period of rising real estate prices, UK Millennials have dealt with stagnating wages:

    Real estate price increases and low personal savings rate for U.K. Millennials have been mostly fueled by low-interest rates, set by the Bank of England (BoE). Some ten years ago, the BoE decided to juice the economy by suppressing UK lending rates to a zero lower bound with cheap money after the 2008 crisis:

    “In our society, it seems acceptable for people to wield their power over the vulnerable in order to get what they want, no questions asked,” explains Ellen Moran of Acorn, a tenants union and anti-poverty group.

    “That power is entrenched and such actions are ignored by law enforcers. Sometimes, though, this happens because people are alienated in their society to such an extent that they crave physical affection without knowing considerate ways to get it. Sometimes it is a mixture of those two things,” she added.

    Unfortunately, the ‘Rent For Sex’ issue in the United Kingdom will only get worse as the economic prospects continue to deteriorate for the Millennial generation. There is no end in sight for this madness, and it will only be a matter of time before this trend washes up on the shores of the United States. It seems as failed Central Bank policy has given landlords one new perk to owning real estate: sex with millennials.

  • Someone Is Trolling the Sh*t Out Of The Oscars In Hollywood

    Authored by Carey Edler via TheAntiMedia.org,

    Just days before the first Academy Awards ceremony since Hollywood was hit with allegations of rampant sexual harassment, assault, and pedophilia, a Los Angeles street artist made a bold statement just a few miles from the Dolby Theater where the Oscars will be held.

    Sabo, a conservative-leaning artist who has previously tagged the city with art referencing former President Obama’s drones, purchased three billboards, echoing the sentiment of a Academy Award-nominated film, Three Billboards Outside Ebbing, Missouri, which tells the story of a mother who seeks accountability for her daughter’s rape and murder, which police in her small town have failed to solve.

    In the film, the mother purchases three billboards that read:

    “RAPED WHILE DYING”

    “AND STILL NO ARRESTS?”

    “HOW COME CHIEF WILLOUGHBY?”

    In Sabo’s version, the billboards plastered in Hollywood read:

    “AND THE OSCAR FOR BIGGEST PEDOPHILE GOES TO…”

    “WE ALL KNEW AND STILL NO ARRESTS”

    “NAME NAMES ON STAGE OR SHUT THE HELL UP!”

    Kevin Spacey’s career went down in flames last year amid the fallout of widespread allegations of abuse by now-scorned producer Harvey Weinstein. Anthony Rapp accused the actor of making advances on him in 1986, when Rapp was only 14. Other accusations against Spacey followed, including some others that alleged Spacey attempted to take advantage of the victims when they were under the age of 18.

    Further, Corey Feldman, who has long warned of predatory, pedophilic behavior in Hollywood, revealed several of his accused abusers last year, citing John Grissom, former talent manager Marty Weiss, and Alphy Hoffman, who was the son of a high-power producer and ran the trendy Soda Pop Club, where Feldman claims widespread harassment took place in the 1980s.

    Feldman claimed there were six abusers total, saying one is an A-list actor who might kill him. He has previously said his fellow child star, Corey Haim, now deceased, received worse abuse than he did.

    In a 2011 appearance on Nightline, Feldman said:

    “[T]he No. 1 problem in Hollywood was and is and always will be pedophilia…that’s the biggest problem for children in this industry… It’s the big secret.”

    Last year, Bryan Singer, a noted director, was accused of and sued over allegations he raped a 17-year-old boy in 2003. He has denied those claims.

    Also last year, amid the systemic controversy, the creators of An Open Secret — a documentary about child abusers in the industry that failed to obtain distributors or wide release — posted the film online for free.

    In light of the pedophilia allegations, along with general accusations of sexual harassment against women and other vulnerable people seeking success in the film industry, Sabo’s art seems timely.

    Much like the title of the documentary, this abuse was reportedly widely known and swept under the rogue.

    As Barbara Walters told Corey Feldman, rejecting his attempts to sound the alarm about pedophilia, “You’re damaging an entire industry.”

    As it turns out, the industry’s unwillingness to acknowledge and address the problem has done arguably equal if not more damage than Feldman’s refusals to stay silent.

    In another show of artistic commentary on the ongoing scandals, a statue of Harvey Weinstein wearing a bathrobe, holding an Oscar, and sitting on a “casting couch” has also appeared on the Hollywood Walk of Fame ahead of the ceremony.

  • Jim Grant: "Bond Markets Worldwide Are Living In Their Own Hall Of Mirrors"

    Welcome to economic ‘fantasy’ island.

    Jim Grant, the world’s most famous interest rate observer, ventured on CNBC this week to expose and explain the utterly farcical world of financial markets (and in particular, risk assets) and how grotesquely distorted global bond markets have become.

    He began with an example…

    “As an example of where the world is mispricing interest rates… look to Italy, which is having a big [potentially disruptive] election on Sunday…

    …there is a speculative grade Italian security, Telecom Italia, the 5 1/4’s of 2022 are trading at 0.61 percent, that is a junk bond with a zero handle.”

    This bond traded with almost a 6 handle just 5 years ago…

    Thank you Mr Draghi.

    But it doesn’t stop there, Grant warns…

    “…and since interest rates are critical in the pricing of financial instruments, these distortions preceded the uplift in all asset values.. and the manifestation of this manipulation is in many ways responsible for what we are now seeing in the markets.”

    These distortions and the chaotic aftermath of their withdrawal are exactly what current Fed Chair Powell warned of in 2013…

    [W]hen it is time for us to sell, or even to stop buying, the response could be quite strong; there is every reason to expect a strong response. So there are a couple of ways to look at it. It is about $1.2 trillion in sales; you take 60 months, you get about $20 billion a month. That is a very doable thing, it sounds like, in a market where the norm by the middle of next year is $80 billion a month. Another way to look at it, though, is that it’s not so much the sale, the duration; it’s also unloading our short volatility position.

    …

    I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.

    Almost?

    “And I think there is a pretty good chance that you could have quite a dynamic response in the market. “

    While Powell is anxious, Grant reminds listeners that the ‘end of the bond bull market’ does not necessarily mean disruptive change…“it took ten years for the long-dated Treasury to move from its low in 1946 of 2.25% to 3.25% in 1956…” but, as Grant points out, it’s different now, “that was before risk parity and the leverage that is now in financial instruments surrounding the bond market.”

    However, Grant warns that he “suspects the tempo of a bond bear market will indeed be faster now than it was in 1946-56.”

    *  *  *

    Once again Grant is correct in his diagnosis of the symptoms… and the prognosis – all of which reminds us of his rhetorical question – What will futurity make of the [so-called] Ph.D. standard [that runs our world]?

    Likely it will be even more baffled than we are. Imagine trying to explain the present-day arrangements to your 20-something grandchild a couple of decades hence – after the crash of, say, 2019, that wiped out the youngster’s inheritance and provoked a central bank response so heavy-handed as to shatter the confidence even of Wall Street in the Federal reserve’s methods…

    I expect you’ll wind up saying something like this:

    “My generation gave former tenured economics professors discretionary authority to fabricate money and to fix interest rates.

    We put the cart of asset prices before the horse of enterprise.

    We entertained the fantasy that high asset prices made for prosperity, rather than the other way around.

    We actually worked to foster inflation, which we called ‘price stability’ (this was on the eve of the hyperinflation of 2017).

    We seem to have miscalculated.“

    Source: Jim Grant’s November 2014 speech at the Cato Institute

  • The Middle-East's Nuclear Technology Clock Starts Ticking

    Authored James M Dorsey via ‘The Turbulent World of Mid-East Soccer’ blog,

    The Middle East’s nuclear technology clock is ticking as nations pursue peaceful capabilities that potentially leave the door open to future military options.

    Concern about a nuclear arms race is fuelled by uncertainty over the future of Iran’s 2015 nuclear agreement, a seeming US willingness to weaken its strict export safeguards in pursuit of economic advantage, and a willingness by suppliers such as Russia and China to ignore risks involved in weaker controls.

    The Trump administration  was mulling loosening controls to facilitate a possible deal with Saudi Arabia as Israeli Prime Minister Benyamin Netanyahu prepared, in an address this week to a powerful Israeli lobby group in Washington, to urge US President Donald J. Trump to scrap the Iranian nuclear deal unless the Islamic republic agrees to further military restrictions and makes additional political concessions.

    Israel has an undeclared nuclear arsenal of its own and fears that the technological clock is working against its long-standing military advantage.

    The US has signalled that it may be willing to accede to Saudi demands in a bid to ensure that US companies with Westinghouse in the lead have a stake in the kingdom’s plan to build by 2032 16 reactors that would have 17.6 gigawatts (GW) of nuclear capacity.

    In putting forward  demands for parity with Iran by getting the right to controlled enrichment of uranium and the reprocessing of spent fuel into plutonium, potential building blocks for nuclear weapons, Saudi Arabia was backing away from a 2009 memorandum of understanding with the United States in which it pledged to acquire nuclear fuel from international markets.

    “The trouble with flexibility regarding these critical technologies is that it leaves the door open to production of nuclear explosives,” warned nuclear experts Victor Gilinsky and Henry Sokolski in an article Bulletin of the Atomic Scientists.

    While Israeli opinion is divided on how the US should respond to Saudi demands, Messrs Trump and Netanyahu’s opposition to the Iranian nuclear accord has already produced results that would serve Saudi interests.

    European signatories to the agreement are pressuring Iran to engage in negotiations to limit its ballistic missile program and drop its support for groups like Lebanon’s Shiite Hezbollah and Houthi rebels in Iran. Iran has rejected any renegotiation but has kept the door open to discussions about a supplementary agreement. Saudi Arabia has suggested it may accept tight US controls if Iran agreed to a toughening of its agreement with the international community.

    The Trump administration recently allowed high-tech US exports to Iran that could boost international oversight of the nuclear deal. Deputy Secretary of State John Sullivan signed a waiver that allows a Maryland-based company to export broadband networks, satellite dishes and wireless equipment to Iran for stations that monitor nuclear explosions in real time.

    Iranian resistance to a renegotiation is enhanced by the fact that Europe and even the Trump administration admit that Hezbollah despite having been designated a terrorist organization by the US is an undeniable political force in Lebanon. “We…have to recognize the reality that (Hezbollah) are also part of the political process in Lebanon,” Secretary of State Rex Tillerson said on the eve of a visit to Beirut.

    A US willingness to go easy on demanding that Saudi Arabia adhere to tough safeguards enshrined in US export control laws, widely viewed as the gold standard, would open a Pandora’s box.

    The United Arab Emirates, the Arab nation closest to inaugurating its first nuclear reactor, has already said that it would no longer be bound by the safeguards it agreed to a decade ago if others in the region were granted a more liberal regime. So would countries like Egypt and Jordan that are negotiating contracts with non-US companies for construction of nuclear reactors. A US backing away from its safeguards in the case of Saudi Arabia would potentially add a nuclear dimension to the already full-fledged arms in the Middle East.

    The Washington-based Institute for Science and International Security (ISIS) cautioned last year in a report that the Iranian nuclear agreement had “not eliminated the kingdom’s desire for nuclear weapons capabilities and even nuclear weapons… There is little reason to doubt that Saudi Arabia will more actively seek nuclear weapons capabilities, motivated by its concerns about the ending of the (Iranian agreement’s) major nuclear limitations starting after year 10 of the deal or sooner if the deal fails.”

    Rather than embarking on a covert program, the report predicted that Saudi Arabia would, for now, focus on building up its civilian nuclear infrastructure as well as a robust nuclear engineering and scientific workforce. This would allow the kingdom to take command of all aspects of the nuclear fuel cycle at some point in the future. Saudi Arabia has in recent years significantly expanded graduate programs at its five nuclear research centres.

    “The current situation suggests that Saudi Arabia now has both a high disincentive to pursue nuclear weapons in the short term and a high motivation to pursue them over the long term,” the report said.

    Saudi officials have repeatedly insisted that the kingdom is developing nuclear capabilities for peaceful purposes such as medicine, electricity generation, and desalination of sea water. They said Saudi Arabia is committed to putting its future facilities under the supervision of the International Atomic Energy Agency (IAEA).

    Vietnam constitutes a precedent for application of less stringent US safeguards. The US settled for a non-binding Vietnamese statement of intent in the preamble of its agreement that Vietnam had no intention to pursue fuel cycle capabilities.

    Tailoring Saudi demands of parity with Iran could be addressed, according to former senior US non-proliferation official Robert Einhorn, by sequencing controls to match timelines in the Iranian nuclear agreement. This could involve:

    — establishing a bilateral fuel cycle commission that, beginning in year 10, would jointly evaluate future Saudi reactor fuel requirements and consider alternative means of meeting those requirements, including indigenous enrichment;

    — creating provisions for specific Saudi enrichment and reprocessing activities that would be allowed if approved on a case-by-case basis by mutual consent and would kick in in year 15;

    — limiting the period after which Saudi Arabia, without invoking the agreement’s withdrawal provision, could end the accord and terminate its commitment to forgo fuel cycle capabilities if it believed the United States was exercising its consent rights in an unreasonably restrictive manner.

    Saudi foreign minister Adel al-Jubeir recently raised the stakes by declaring that the kingdom was engaged in talks with ten nations about its nuclear program, including Russia and China, nations that impose less stringent safeguards but whose technology is viewed as inferior to that of the United States.

    To strengthen its position, Saudi Arabia has added Pillsbury Winthrop Shaw Pittman, an international law firm specialized in energy regulation, to its army of lobbyists and public relations firms in Washington, in a bid to ensure it gets a favourable agreement with the United States.

    “Allowing Moscow to gain a nuclear foothold in Saudi Arabia would deal a serious blow to U.S. regional influence and prestige,” warned the Washington-based Arabia Foundation’s Ali Shihabi.

  • Venezuelans Are Paying Black-Market Dealers A 100% Markup For Worthless Paper Bills

    Since the wheels came off Venezuela’s economy back in 2013, the US financial press has displayed an at times unhealthy preoccupation with the fate of Latin America’s favorite “Socialist Paradise” – once the region’s wealthiest economy.

    So it’s hardly surprising that Bloomberg, in an effort to unearth more gritty vignettes about the hardships endured by Venezuelans – particularly those who were once middle class who have now fallen into abject desperation in the streets of Caracas, or elsewhere – is publishing a series of first person essays called “Life in Caracas”.

    VZ

    And in its introductory installment, reporter Andrew Rosati points out one of the most dumbfounding ironies of hyperinflation: The need to pay insane mark-ups to obtain paper cash from grey-market dealers.

    Rosati describes setting up a clandestine meeting with his “cash dealer” in language that could be used for a drug buy.

    My most recent order arrived by motorcycle, a loaded, black trash bag tossed my way. “This is what’s available,” the courier said gruffly before zooming off. I nodded. There’s no begging in the bolivar business.

    What he delivered was cash, 200,000 bolivars of it. I, in turn, wired 400,000 bolivars to his bank account. Why such a huge markup? Because in hyper-inflationary Venezuela, we’re all desperate for paper money, a ridiculously scarce commodity but a necessity, even for someone like me with plenty of credit cards. You need cash for gasoline, to use the metro or park your car in a garage, to buy fried fish on the beach or a cup of coffee on the street.

    So this is the question that’s all over Caracas: “You got a guy?” I hear it, in dive bars and at posh dinner parties, and in line at the bank, which, invariably, is out of the desired product.

    The guy, of course, is a cash dealer. My phone is filled with a half-dozen numbers. They’re cab drivers and restaurant owners and produce sellers, anyone with a bit of hustle. It’s a booming business. The 100 percent premium I paid that day isn’t unusual.

    While conventional wisdom might lead one to believe that ordinary Venezuelans sought to settle transactions digitally, this couldn’t be further from the truth: While bitcoin, monero and other digital currencies have become crucial sources of badly needed foreign capital, most Venezuelan merchants prefer to accept cash for small goods. This is true for restaurants and most food vendors, also.

    As Rosati explains, the difficulty of obtaining enough cash before the value of the bolivar further disintegrates isn’t just a headache – in the slums, it makes a desperate situation worse.

    For me, it’s just another of the frustrations of living in an imploding economy. Low-denomination bills—anything below 100 bolivars ($0.0005 at the black-market rate)—are often used nowadays for such things as confetti at baseball games. And the government is so broke, it can’t afford to print bigger bills fast enough. It’s a curiosity, this whole mess, almost bordering on a Yogi-ism: Hyperinflation’s rendered paper money so worthless that it’s become incredibly valuable.

    The paper chase is most intense in the slums, where many people have no other means of payment. Fixers are everywhere in these neighborhoods, eager to get their hands on all the cash swirling around.

    One flipper, Orlando Villarroel, told me he positions himself at a bakery check-out. One by one, he pays for customers’ items with his credit card, giving them a markdown and collecting their banknotes until he’s chased out of the place.

    Venezuela, which struggles with the world’s worst hyperinflation, saw annualized inflation accelerate to 4,651%. As Rosati points out, the struggle to obtain enough cash is becoming increasingly more difficult to win. And it’s unlikely the money raised by President Nicolas Maduro’s petro will do anything to soften the blow.

  • Change Is Coming: China Is Accelerating Its Plan For A Military Base In Pakistan

    Authored by Lawrence Sellin, op-ed via The Daily Caller,

    On January 1, 2018, The Daily Caller published information – later confirmed in two separate reports, here and here – about a plan for a Chinese military base on the Jiwani peninsula in Pakistan, near Gwadar, a sea port critical to the success of the China-Pakistan Economic Corridor (CPEC).

    According to noted national security correspondent Bill Gertz:

    “Plans for the base were advanced during a visit to Jiwani on Dec. 18 by a group of 16 Chinese People’s Liberation Army officers who met with about 10 Pakistani military officers.”

    “The Chinese also asked the Pakistanis to undertake a major upgrade of Jiwani airport so the facility will be able to handle large Chinese military aircraft. Work on the airport improvements is expected to begin in July.”

    Sources now say the plan has been accelerated. Upgrade of the Jiwani airport is already underway. In addition, procedures are being formulated for the relocation of the local population to make way for Chinese military and other support personnel. The sensitivity and importance of this issue to China and Pakistan cannot be overstated. After the disclosures and the expected denials from both Islamabad and Beijing, Pakistani officials, as early as January 5, 2018, launched a leak investigation and it was jointly decided to advance the schedule for the Jiwani base.

    Strategically, China’s Belt and Road Initiative (BRI) is their roadmap to geopolitical dominance. It is soft power with an underlying hard power, military component, the so-called “String of Pearls” bases and facilities.

    A Chinese military base on the Jiwani peninsula will complement the Chinese base in Djibouti, which became operational in 2017. Both are located at strategic choke points. The Djibouti base is near the entrance to the Red Sea and the Suez Canal, while the Jiwani base will be within easy reach of the Strait of Hormuz, a combination, not only capable of dominating vital sea lanes in the Arabian Sea, but boxing-in U.S bases in the Persian Gulf and outflanking the U.S. naval facility on Diego Garcia.

    There is concern that the Chinese will transform its 99-year lease of the Sri Lankan port of Hambantota into another naval base, the exact “debt-trap” method the Chinese used in Djibouti and after its acquisition of a 40-year lease of the Pakistani port of Gwadar. There are also continuing Chinese diplomatic efforts to gain access to the Maldives.

    All of the above represent elements of China’s “String of Pearls” bases to secure military dominance of the maritime component of BRI.

    In addition to explicit economic and military moves, China is planning a fiber optic network to control the flow of information and is mapping the northern Indian Ocean seabed, potentially for a SOSUS-like system to monitor maritime traffic and control a fleet of subsurface drones.

    While the United States is tinkering with counterinsurgency policy and nation building in Afghanistan, there are seismic strategic changes taking place in South Asia and the Indian Ocean region.

    It is senseless to continue an unsuccessful, costly and exhaustive approach in Afghanistan, which not only places our forces at an equivalent tactical level to the Taliban, but allows Pakistan to regulate the operational tempo and the supply of our troops.

    Instead, the U.S. should be moving toward a policy that shifts the burden of Afghanistan stability to the regional players who have thwarted our efforts there and adopt a strategy that exploits our technological advantages to counter growing Chinese sophistication and ambition through augmented U.S. naval and air power projection and the selective use of covert, special operations and cyber warfare operations.

    The foremost regional problem is to have a workable plan to secure Pakistan’s nuclear arsenal, which is growing more dangerous because of its expanding tactical nuclear weapons program.

    The United States is not without strategic options to disrupt Chinese hegemony. The linchpin of BRI is CPEC. Pakistan’s main vulnerability remains ethnic separatism, which was largely the reason Pakistan adopted a program of Islamization in the late 1970s. Pakistan is the Yugoslavia of South Asia with the Pakistani province of Punjab as the equivalent of Serbia, when that country pursued an expansionist policy in the 1990s.

    For example, BRI cannot succeed without CPEC and CPEC cannot succeed without a subservient Balochistan, a province with a festering insurgency that was once independent and secular before it was forcibly incorporated into Pakistan. Balochistan is also where Pakistan maintains a significant Taliban infrastructure and provides safe haven to its Quetta Shura leaders.

    There clearly needs to be a sense of urgency applied to this challenge because current U.S. policy in Afghanistan is about to be overtaken by events.

    An American withdrawal from Afghanistan will only be a humiliating defeat if the United States is forced into strategic retreat because we do not have a plan in place to address the changing regional conditions.

  • A Tiny Island Nation You've Never Heard Of Has Become A Global Battleground

    Authored by Darius Shahtahmasebi via TheAntiMedia.org,

    Last week, Saudi Arabia and the United Arab Emirates announced a grant of $160 million for “development projects” in the Maldives, a country located in the Indian ocean that is currently battling an economic and political crisis.

    “As part of the support of the Kingdom of Saudi Arabia and the United Arab Emirates, the Saudi Fund for Development and the Abu Dhabi Fund for Development has pledged $160 million in support of the Maldives and its brotherly people for the development projects including the airport development and fisheries sector of the Maldives,” a statement on the Maldives presidency website said on February 18.

    Foreign debt is viewed with great enthusiasm by the current governments in the Asia-Pacific region, but not so much by the rest of the population. Former Maldivian President Mohamed Nasheed recently warned that its monumental debt to China has put the country at risk of a “land grab.”

    “We can’t pay the $1.5-2 billion debt to China,” Nasheed told the Nikkei Asian Review in an interview.

    If the Maldives falls behind on its payments, China will “ask for equity” from the owners of various islands and infrastructure operators, and Beijing will then “get free hold of that land,” he also reportedly said.

    Just days ago, the current President, Abdulla Yameen, extended the state of emergency that was implemented in early February. Fortunately for China, the focus has quickly shifted from China’s influence in the country to the Gulf’s growing involvement, particularly Saudi Arabia’s.

    “It is unfortunate that certain countries are assisting the deep state,” Mohamed Aslam, Maldivian Democratic Party (MDP) legislator and member of the House Economic Committee, told Al Jazeera. He also said:

    “The Maldives, at present, is in a state of flux politically and socially. It is also under siege by an organised and systematic strategy developed and implemented by radical Islamists with the intention of infiltration and subsequent total control of key departments of the state.”

    In 2015, the Maldives approved a law to allow foreigners who invest more than $1 billion to own land in perpetuity. While this may not seem like that big of a deal, having a five-minute conversation with anyone in the Asia-Pacific region will immediately tell you otherwise because land is everything to local inhabitants of the Asia-Pacific. As the New York Times articulated last year:

    “But Mr. Ahmed [a local resident] and others here are bracing for a life change they fear could be catastrophic, after the Maldivian president’s announcement in January that leaders of Saudi Arabia were planning a $10 billion investment in the group of islands where Mr. Ahmed lives, known as Faafu Atoll.

    “Most alarming to the residents were reports that the government was breaking with a longstanding policy of leasing the islands that are home to some of the world’s premier resorts and selling the atoll outright to the Saudis. The inhabitants fear they might be moved off the islands.”

    However, despite the potential loss of land ownership, Saudi funding for any country comes with some more disturbing strings attached. As Fareed Zakaria has explained:

    “In Southeast Asia, almost all observers whom I have spoken with believe that there is another crucial cause [behind the ‘cancer’ of Islamic extremism] – exported money and ideology from the Middle East, chiefly Saudi Arabia. A Singaporean official told me, ‘Travel around Asia and you will see so many new mosques and madrassas built in the last 30 years that have had funding from the Gulf. They are modern, clean, air-conditioned, well-equipped – and Wahhabi [Saudi Arabia’s puritanical version of Islam].’ Recently, it was reported that Saudi Arabia plans to contribute almost $1 billion to build 560 mosques in Bangladesh. The Saudi government has denied this, but sources in Bangladesh tell me there’s some truth to the report.”

    As The Week also explained in 2015, Saudi Arabia has spent billions of dollars “investing heavily in building mosques, madrasas, schools, and Sunni cultural centers across the Muslim world. Indian intelligence says that in India alone, from 2011 to 2013, some 25,000 Saudi clerics arrived bearing more than $250 million to build mosques and universities and hold seminars.”

    According to the New York Times, Saudi Arabia has “for decades spread its conservative strand of Islam in the Maldives by sending religious leaders, building mosques and giving scholarships to students to attend universities.”

    It should therefore come as no surprise to anyone that the South China Morning Post reported that Indian intelligence sources are claiming hundreds of Maldivians have joined ISIS in Syria. ISIS essentially holds the world ransom with Saudi Arabia’s strict strain of Islam, a mere coincidence one can be sure.

    India, for its part, also has a deep interest in claiming the Maldives for itself, though it was noticeably left out when President Yameen sent envoys to Saudi Arabia, China, and Pakistan to request help in its current political crisis.

    China sees the Maldives as a key part of its One Belt, One Road initiative, and Beijing does not necessarily view Saudi Arabia’s desire to inject itself in the region as a bad thing. In fact, the South China Morning Post lamented that Saudi Arabia is doing so in its bid to assert itself as a more viable partner in China’s rapidly expanding economic projects as opposed to its major arch-rival, Iran, with which China also has a cooperative relationship.

  • One Company Now Owns Over 7% Of The Entire S&P500

    By now it has become common knowledge that in the ongoing war of attrition between expensive – but very much underperforming under central planning – active investing and cheap and efficient passive, ETFs, the latter are winning and the former will likely concede majority control of market AUM in just over a year.

    Furthermore, as BofA notes, US trading volume (as of late summer 2016) was 24% exchange traded funds (ETFs) and 76% single stocks versus 20% ETFs and 80% single stocks three years ago. By now ETFs are likely responsible for 30% of trading volume or much more.

    However, it is far less known that as “active” loses market share, “passive” has become a giant force in the overall market, and as of 2016, the percentage of S&P 500 market cap held by Vanguard alone has doubled since 2010. At this rate, ETF-giant Vanguard alone will own 10% of the entire market by the end of the decade.

    Unfortunately, this unprecedented dominance by investment vehicles that merely reflect flows and not fundamentals, means that the market is becoming increasingly fragile, inefficient and broken, something which can be seen in the excess volatility (measured by both standard deviation & price declines) of stocks with a larger proportion of shares held by passive investors.

    Yet while in the US ETFs are yet to dominate the market, resulting in even greater systemic fragility and irrationality, this is already the case in Japan, which like with QE and NIRP, has been the guinea pig for countless monetary and market experiments.

    Just like in the US, there is a tangible reason why the flows into Japan passive investing have been massive: active managers suffered outperformance rates 12ppt lower between 2014-2016, a period in which passive inflows were accelerating vs. over the prior decade (34% of funds outperforming the TOPIX between 2014-2016 vs. 46% outperforming between 2002-2013).

    As a result, in Japan passive funds are now two-thirds of total….

    … with the flow differential between active and passive absolutely staggering.

    It is unclear how much of this has been the result of BOJ intervention, but what we do know is that over the past 5 years the Japanese central bank has been purchasing massive amounts of equity ETFs in its attempt to control the stock market, and at last check the BOJ owned 75% of total Japanese ETFs.

    If Japan is indeed the harbinger of what is coming, then over the next 3-5 years, the Fed will become the biggest investor in the ETF market as the US central bank does everything in its power to avoid a terminal stock market collapse after the next depression.

    Meanwhile, the trend in the US is clear: investors increasingly are giving up on single stocks, and thus fundamentals, and embracing the collective hive mind of ETFs…

    … resulting in “less stock selection, more sector selection”, and an ominous increase in “long-term market inefficiencies” according to Bank of America…

     

Digest powered by RSS Digest

Mar 03

Today’s News 3rd March 2018

  • Putin's Ultimatum Is The Next Stage Of The War

    Authored by Tom Luongo,

    Russian President Vladimir Putin’s State of the Union address may be the most important speech since his address to the U.N. in September 2015 on the eve of Russia’s intervening in the War on Syria.

    Putin’s sober analysis and admission of demographic constraints on the Russian economy’s growth was welcome.  It highlights the real challenges for Russia over the next fifteen years.  The shift for those of us analyzing the Russian economy is to look at it purely in terms of per capita growth, not absolute growth.

    But, that admission of Putin’s highlights the backdrop of his publicly outing Russia’s new and formidable weapons technology.

    That he did this during the height of his re-election campaign should bring a smile to the cynic’s face. Well played, sir.

    Now, about those new weapons.  I defer to Alex Mercouris at The Duran for the only in-depth look at these new weapons.  The Saker, who is absolutely one of the best analysts of Russia’s military capabilities, considers these new weapons, “Game, set, match for The Empire.”

    No More Parallel Aggression

    Putin has played the game very well over the past few years.  Employing the strategy of ‘parallel aggression’ when responding to a U.S. escalation, he’s kept a lid on hostilities in Syria and Ukraine, while grinding out small victories, playing for time.

    The announcement of these new weapons, however, change that game plan.  Putin is now going on the attack.

    Here are some early thoughts on this implies:

    1. Announcing these weapons begs the question, “What is Putin not telling us about?”  That should scare many in the Pentagon and civilians who believe the U.S.’s response should be to escalate.

    2. Arming Ukraine with more heavy weapons to take back the Donbass will be countered because there is no reason not to.

    3. Now we know (versus suspect) why the U.S. Deep State has been so adamant about pushing an anti-Russian narrative now.  The window has closed on any potential regime change in Russia.

    4. U.S. forward deployments in Afghanistan and Syria and backing proxy armies such as ISIS and the Kurds is part of a subversion strategy to soften the underbelly of Russia forcing them to fight expensive, conventional warfare while extending U.S. logistical supply lines, its core competency in warfare.

    These new weapons represent a state change in weapons technology but, at the same time, are cheap deterrents to further escalation.  They fit within Russia’s budget, again limited by demographic and, as I pointed out in a recent article, domestic realities.

    The Narrative Quagmire

    And it’s why point #4 above is the most important.  We’re not winning in technology.  So, all we can do it employ meat-grinder policies and force Russia and her allies to spend money countering the money we spend.

    It’s a game that hollows everyone out.  And it’s easier for Putin to sell the defensive nature of his position to Russians than it is to sell our backing Al-Qaeda and ISIS to defeat them.  Because that reality has broken through the barrier to it.

    Trump’s fighting the RussiaGate narrative domestically dovetails with exposing our duplicity in Syria.  The important point of the Urainium One scandal is not that Hillary Clinton the gutting of our uranium reserves.  No, the important point is that the the very people screaming out Russia today were cutting deals with them yesterday.

    Even the dumbest American sees the hypocrisy in that.

    Putin coming forward now with this announcement puts a halt to the political games being played in the media and at the U.N. to hang onto a failing narrative of Russian and Syrian malfeasance in the war.

    You can only scream about the chemical weapons wolf so many times before no one believes it any more.

    Don’t Get M.A.D.

    The U.S. knew about all of these systems.  If we didn’t then what are we truly spending all this money on spycraft for.  We also know first-hand how good Russian electronic warfare (EW) is, c.f. the airstrike on Al-Shairat last April where less than 40% of those Tomahawks hit their intended targets.

    The Saker has made the point many times that Russia’s armed forces, up to this point, are designed around rapid response within 1000 kilometers of Russia’s borders.  It is not designed around global force projection.

    These new weapons fundamentally change that stance.  And much of the current geopolitical knife-fighting will come to a rapid close because of it.

    Russian diplomacy has stymied U.S. attempts to game the geopolitical landscape for the past four and a half years (since Putin beat Obama over the false flag chemical weapons attack in 2013).  Now he’s given everyone another thing to consider, Russia’s Big Stick.

    And I invoke Teddy Roosevelt here on purpose.  Putin’s foreign policy has morphed into that.  This is his ‘walk softly and carry a big stick’ moment.  He’s been building to this point for fourteen years, since Bush the Lesser pulled the U.S. out of the ABM Treaty.

    Now it’s here and we have no reasonable response.  The Defense Department’s statement was laughable.  All we can do it try and put inferior weapons closer to Russia’s borders to approximate M.A.D., a situation I feel we haven’t been at for quite a while now.

    Putin just red-pilled the world on this subject.

    The current hot-spots will begin resolving themselves over the next year.

    Escalation by the U.S. in Ukraine is simply a way to empower Putin’s hardline critics on the eve of an election.  The cries of “Putin is a traitor” or “Putin is a Zionist shill” have been growing louder in the fringes of the Russian-centric commentariat.

    He just ended them by changing the rules of engagement completely.  If Putin was truly that guy, a weak-handed fool secretly working for Zionists, then he would have left Russia defenseless and would not have announced on the eve of his re-election after playing ‘possum for months the hammers Russia needs to secure her future.

    In the broader sense, Putin has now put all of his allies under the same nuclear umbrella.  And it should give everyone running their mouth about going to war, from Hezbollah to Israel, from Turkey to Iran pause.

    Syria is now a game of attrition which Damascus and Moscow will win.

    With Trump’s massive win at CPAC and the mid-term elections on the horizon, expect a major summit between Trump and Putin this year.  Trump cannot hide behind the Democrats’ lunacy in the face of what Putin just announced.

    They have to talk formally about how to pull the world back from what appears to be the brink of war.

    *  *  *

    For more commentary like this, advice on how to structure your investments and exclusive ideas ranging from stocks to bonds to cryptocurrencies, sign up for the Gold Goats ‘n Guns Investment Newsletter at my Patreon Page for just $12/month.

  • "Avoiding The Mistakes Of Our Parents" – Only A Third Of Millennials Have A Credit Card

    Nearly a decade has passed since Lehman Brothers collapsed, ushering in the most acute phase of the financial crisis – yet, despite all the time that has passed many millennials remain deeply distrustful of banks and borrowed money, according to a study published by Bankrate.

    The study found that, while a majority of older Americans own credit cards, only 33% of adults between the ages of 18 and 29 say they have one. That is, even as the economy and job prospects have improved, millions of Americans continue to shun credit – something that is probably related to the massive pile of student loan debt, the bulk of it borne by millennials, who are defaulting in ever-greater numbers.

    While that figure might seem surprisingly large, it’s actually down from two years ago, when Bankrate discovered that two-thirds of young adults said they had no “major” credit cards, defined as cards issued by either American Express, Visa, MasterCard or Discover.

    One

    In interviews with several “real-life” millennials, Bankrate said they hadn’t even considered getting a credit card. Others said they shunned credit cards because of previous financial problems.

    “I’ve never owned nor have ever wanted to own a credit card,” says Kristian Rivera, 25, a digital marketing specialist in New York City.

    “It wasn’t really a decision that I made, but growing up I was warned of the risks of having a credit card and advised to put off getting one as long as possible.”

    “We don’t want to make the same mistakes our parents made in the past,” Rivera says. “We want to do things smarter and safer.”

    For millions of Americans, the agglomeration of debt that most people have accumulated by early adulthood is forcing them to put off marrying or starting a family. And roughly one-third of adult millennials are still living in their parents’ basements. 

    Darnell Billups, 29, a U.S. Marine Corps captain stationed in Twentynine Palms, California, says when he and his wife, Natasha, married in 2011, they had a combined $40,000 in debt, including credit cards and student loans. They paid off their debts in 2013, just 2 weeks before Billups was deployed to Afghanistan for the second time.

    “Our thing is, we will never have a credit card ever again,” Billups says.

    More than just credit cards, the couple wants to steer clear of all debt. They recently opened a photography business, Emmanuel Photography & Designs, without taking on any debt, and they plan to eventually buy a house using only cash.

    “It’s been just wonderful because we don’t have to pay anyone back,” he says.

    To be sure, young adults aren’t the only demographic group shying away from credit card use…

    …While it doesn’t perfectly align, credit card use is most common among groups that are also more likely to own stocks. According to one study, one in three millennials say they would rather own bitcoin than stocks (though, to be fair, that’s probably due to bitcoin’s torrid rally late last year.

    Here’s a breakdown provided by BankRate:

    • Have an annual income of less than $30,000.
    • Haven’t attended college.
    • Are black or Hispanic.

    Credit card ownership is most prevalent among:

    • Baby boomers.
    • College graduates.
    • Adults with an annual income of more than $75,000.
    • Those who identify themselves as Republicans.

    Unsurprisingly, people with higher incomes are more likely to own credit cards:

    Two

    By avoiding credit cards, millions of millennials will find it difficult to obtain other types of credit – like mortgages or car loans – when they need it.

    Marc Aschoff learned this lesson when he and a group of friends tried to buy a rental property shortly after college. But since Aschoff had never had a credit card, he hadn’t developed a solid credit history and none of the mortgage brokers he spoke with would qualify him for a mortgage.

    “Needless to say, this isn’t something I considered,” says Aschoff, 25, of Hoboken, New Jersey.

    Aschoff and one of his business partners, Chris Sorrentino, also 25, say they now own credit cards only to help with their credit scores. And building up their credit helped them qualify for a mortgage.

    The survey was conducted May 19-22, 2016, by Princeton Survey Research Associates International and included responses from 1,002 adults living in the continental United States. The margin of error is plus or minus 3.7 percentage points.

    They now own 3 rental properties near Lehigh University in Bethlehem, Pennsylvania. In January, Aschoff, Sorrentino and 2 other partners in their real estate firm — Acrez LLC — purchased a house in Springfield, New Jersey, with cash. They are now renovating and hope to resell.

    “The only debt we really take on is mortgage debt,” Aschoff says. “Other than that, debt is not our friend.”

    Given the fact that millions of millennials can’t even be bothered to get even a low-limit card, it probably won’t come as a surprise that millennials also don’t care about so-called “status” cards like the American Express Black Card.

    Three

    Given millennials well-documented preference for experiences – like travel – over material possessions, their unwillingness to apply for credit cards might seem foolish. 

    After all, they’re missing out on all those free miles…

  • Smashing The Myth Of America's "Stingy" Welfare State

    Authored by Ryan McMaken via The Mises Institute,

    According to the usual news sources, Donald Trump’s new budget proposal “envisions steep cuts to America’s social safety net“ and will “gut social programs.” Most of the cuts were proposed to pave the way for more Pentagon spending. 

    In truth, Trump’s proposal doesn’t matter, and Congress will set to work piling on more deficit spending for both social programs and for the Pentagon. 

    But, the debate of “gutting” social programs will no doubt be used to perpetuate, yet again, the myth that the United States is ruled by libertarian social Darwinists who ensure that no more than a few pennies are spent via social programs for the poor. 

    Now setting aside the question of whether or not social programs are the best way to address poverty, the fact is that the United States spending on social programs is on a par with Australia and Switzerland, and can hardly be described as “laissez-faire.” 

    Moreover, government spending on healthcare per capita in the United States is the fourth largest in the world.

    Governments in the United States pour money into social-benefits programs at rates typical to a Western welfare state. We can debate whether or not the way this is done is sub-optimal or not, but the fact remains, that if we’re going to talk about social programs, the amount of spending in the US is not low in a global context. 

    According to the 2016 social expenditure database at the Organisation for Economic Co-operation and Development (OECD), public social spending as a percentage of GDP in the US was 19.4 percent:

    While it is true the US is hardly the highest on this list, its social spending is higher than that of Canada, Australia, Ireland, and Iceland, all of which we are often told are far more “generous” countries in terms of their welfare states. Indeed, if the typical American leftist were asked if the US should spend as much as Canada or Australia on social benefits, the response is very likely to be an emphatic “yes.” 

    And yet, the US outpaces all of these, and has spending levels comparable to that of Switzerland. Indeed, the difference between Switzerland and the US in this measure is four-tenths of one percent. The OECD average is 21.4 percent, a matter of 2.1 percentage points difference from the US. 

    When we turn to the matter of healthcare, we find that the US is a world leader in terms of governmental healthcare spending. 

    According to the World Health Organization, only Luxembourg, Norway, and the Netherlands spend more government money on healthcare per capita. 

    In the US, the sum is $4,153 per capita, and in Norway it is $5,154. In the United Kingdom, the total is $2,716. 

    This presents a problem for advocates for more government control of the healthcare system, of course. Often, their line of argument is that Americans are too “stingy” with social health benefits. When confronted with the fact that government spending is quite high, however, they switch tactics, and then declare that if the US adopted a more government-regimented system, then spending would actually be lower. This was a tactic employed by Bernie Sanders. 

    This latter claim may or may not be so, but the one thing we do know is that the US already spends more taxpayer money on healthcare than most everyone else. So, it seems hard to fathom that the “problem” — whatever that may be — is a product of too little government spending on health care. 

    If advocates for reform want to argue over how the money is spent, let them do so, but the debate should hardly include any proposals to increase government spending. 

    In the US, government spending on healthcare as a percentage of total government spending, is one of the highest among wealthy nations. Although, by this measure the US is equal with Japan and the Netherlands. 

    I am not a defender of the US government’s gargantuan military budget, but even considering that huge expense, government healthcare spending still takes up an unusually large amount of government spending in the US. 

    There is no shortage of articles in publications like Slate and The Nation stating that “the American social safety net does not exist” and that the US has a “stingy social safety net.”

    Now, if by “stingy” one means, “poorly administered,” “ineffective,” or “counterproductive,” then one would be on to something. But if by “stingy,” one means “underfunded,” well, there’s little evidence of that. 

    Even many advocates for a reduced federal budget are likely willing to consider ideas that would spend taxpayer dollars more effectively. After all, if it’s a given that one is going to pay a large federal tax bill, one usually would rather see that money go to something like housing for a single mother and her children who are living in a car. 

    But are federal dollars actually doing this well? 

    Critics of American “stinginess” are themselves quick to point out that all that American spending on social benefits isn’t pushing down poverty rates as in other countries. Even if one believes that governments are generally poor at accomplishing the goals they set out to accomplish, it seems that in this regard, the US government is especially bad.

    A Modest Proposal — Dismember America’s Huge Welfare State

    There may be many reasons for this. But it is also worth noting that among the Western welfare states, the United States is by far the largest with 320 million people. The next largest country isn’t even half that size, and is Japan with 125 million people. And, of course, Japan’s geography, culture, are demographics are completely different from that of the US. Once we get to governments of the size and physical scope of the US government, we’re looking at something on a scale that can’t possibly be considered  “responsive” or “accountable” by any measure. It becomes nearly impossible to make changes in such an enormous apparatus which itself cannot possibly take into account the vast number of different populations and conditions that exist across a place as huge as the United States. 

    One immediate solution is to decentralize the welfare state immediately, and take it out of the hands of the federal government. But that by itself isn’t a magic bullet, since we know that in California, which has its own supplemental welfare state on top of the federal one, poverty is higher than in any other state. 

    Nevertheless, if we’re going to hear constantly about what successes the Scandinavian welfare states are, for example, we might use this as an excuse to create welfare states on a more Scandinavian scale. Given that the largest Scandinavian nation-state (Sweden) has 10.1 million people, this means breaking up the American welfare state into at least 30 totally independent smaller pieces and going from there. These programs would then be under the control of local residents — as they are in, say, Denmark — and not something controlled by distant, untouchable Washington bureaucrats and politicians. An even better size for each piece would be something on the scale of Norway, which has five million people, and is thus the size of Minnesota or Colorado. At the very least, no government larger than a US state ought to be in the business of social benefits. 

    When it comes to government, bigger has never been better. 

  • It's Not All Bad – These 6 Charts Show How The World Is Improving

    It only takes a few minutes of cable news to get the feeling that the world is heading into a tailspin.

    Endless images of homicide investigations, natural disasters, car crashes, and drug busts fill the airwaves on a daily basis. It’s upsetting – but also certainly captivating for the average viewer.

    In fact, as Visual Capitalist’s Jeff Desjardins notes, the news cycle thrives on fear and violence, so mainstream networks find a way to fill up 99% of programming with these singular events. It’s addicting and sometimes anger-inducing, but is it representative of what’s really going on in the world?

    GOOD NEWS HAPPENS SLOWLY

    Today’s infographic comes to us from economist Max Roser of Our World in Data, and it highlights six megatrends that show that in many important ways, our world is improving drastically.

    Courtesy of: Visual Capitalist

    The one commonality of these six indicators? They all happen slowly and incrementally, but are more evident with a long-term perspective.

    Each family lifted out of poverty, each classroom that gets built, and each village gaining access to basic vaccinations may not seem significant on a scale of billions of people – but over decades, these gains add up to create a richer, more educated, and healthier world and a very powerful statistical story.

    SIX GLOBAL TRENDS

    Here are the six big picture trends pointed out by Roser, using data collected over hundreds of years:

    1. Extreme Poverty
    The portion of people in extreme poverty – making less than $1.90 per day – has dropped like a rock over the years. Back in 1940, about 75% of the world was in extreme poverty – today, that number is just 10%.

    The most potent recent example of this is China, where access to free markets have enabled 700 million people to be lifted out of poverty in just over 20 years.

    It’s also worth mentioning that statistics for this category are done using inflation-adjusted international dollars, which take into account inflation over time as well as exchange rates. Non-monetary forms of income are also included in the calculations.

    2. Basic Education
    In 1820, only a privileged few were able to get basic schooling. Since then, millions of classrooms and schools have been added around the globe, and the numbers are staggering. In relative terms, we’ve gone from 17% of people having a basic education to 86% today.

    Here’s a more detailed breakdown of this, also from Our World in Data:

    3. Literacy
    Following a similar trend line as basic education, literacy has risen from 12% to 85% over roughly two hundred years. In absolute terms, these numbers are even more impressive. In the 1820s, there were only about 100 million people that could read that were 15 years or older. Today, the number stands at 4.6 billion.

    4. Democracy
    While the world has been having some short-term setbacks when it comes to freedom and democracy, the overall trend line is still impressive over the long run.

    In 1900, only 1 in 100 people worldwide lived in a democracy – and today, the majority (56 in 100) can say they live in a country with free and fair elections.

    5. Vaccination
    Vaccinations for diseases like whopping cough, tetanus, and diphtheria were unavailable for most of the 200 year chart. However, today around 86% of people globally are vaccinated against these basic and devastating illnesses.

    6. Child Mortality
    Even as far back as 1920, it used to be that over 30% of infants would die before they hit their 5th birthday.

    Since then, developments in housing, sanitation, science, and medicine have made it so that death is a much rarer occurrence for the youngest people in our society. Today, on a global basis, child mortality has been reduced to 4%.

  • Army Major Explains Why The US Military Should Stay Out Of Iran

    Authored Major Danny Sjursen via BreakingDefense.com,

    Last week, after Israel reportedly shot down an Iranian drone and Prime Minister Netanyahu proudly displayed a hunk of twisted metal as a war trophy, Americans were treated to fresh calls for regime change from some prominent neoconservatives.

    Granted, Iran is no friend to the U.S. and might even qualify as a modest adversary. Its nuclear ambitions should continue to be thwarted, as most reports indicate they are.

    Still, what Washington desperately needs right now is some perspective and an honest conversation about the realities of the Middle East. Not alarmism. The last thing the overstretched U.S. military needs is another hot war. It’s already pretty busy. President Obama bombed seven countries in 2016, and President Trump has continued apace.

    There’s reason to worry. Trump, who ran on an eminently reasonable platform of disengagement from “dumb” wars in the region, quickly pivoted to a hawkish stance on the Islamic Republic. In December, when protestors hit the streets of Tehran based on mostly economic motives, Trump immediately rallied in support and not-so-subtlety tweeted “Oppressive regimes cannot endure forever.” Except, that is, for Saudi Arabia, Egypt, and other illiberal authoritarian regimes we support.

    Perhaps Trump simply meant the people of Iran would topple the ayatollahs, but if the recently released National Defense Strategy is any indicator — it lists Iran as one of four core threats —U.S.-imposed regime change is certainly on the table.

    Defense Secretary Jim Mattis

    It shouldn’t be. At present, Iran does notpresent a clear and present vital threat to American national security. Statements from Defense Secretary Jim Mattis, however, indicate he disagrees.

    Mattis’ Blind Spot

    The secretary is the boss, my boss, but his focus on the Iranian regime qualifies as his blind spot, a veritable Iran obsession.

    Since at least 2011, Mattis has overstated the Iranian threat and hinted at toppling the regime in Tehran. And he’s only doubling down. This past May, Mattis told “Face the Nation,” that “what we find is, wherever there are challenges, wherever there is chaos, wherever there is violence, whether it be in Lebanon, in Syria, in Iraq, in Yemen, the attempts to unsettle Bahrain. We always find Iran and the IRGC [Islamic Revolutionary Guard Corps] at it.” He also once told then-President Obama that the top three threats in the Middle East were “Iran, Iran, Iran.” That sounds excessive.

    Iran spends about as much on defense annually as the U.S. does on a single aircraft carrier. A simple comparison is instructive: Iran’s GDP was about $427 billion, and it spent some $11.5 billion on defense in 2016. U.S. allies, like Saudi Arabia (GDP: $678 billion; defense spending: $66.7 billion) and Israel (GDP: $348 billion; defense spending: $19.6 billion) can more than hold their own. And remember, standing behind them is the real behemoth, the U.S., which plans to spend $716 billion on defense in 2019—that’s $300 billion more than Iran’s entire GDP. The numbers speak for themselves. Conclusion: some perspective is in order.

    While Iran definitely is engaged in the Mid-East, its own neighborhood, it’s rarely behind much of anything and doesn’t have nearly the power or influence to pull all the various regional strings. Yemeni and Bahraini unrest were homegrown. Conflict in Syria and Lebanon preceded Iranian deployments there. And Iraq, well, the U.S. handed Baghdad to Iran on a silver platter after that ill-fated invasion. Iran use regional proxies, rather than its own military, precisely because it is weak and fearful.

    Furthermore, though he’s recently backed off some of his most bellicose threats, Mattis regularly draws distinctions between the supposedly disenfranchised people of Iran and an ostensibly separate revolutionary regime. There’s something to this, but in Mattis’ statements, it sounds like he’s calling for the fall of the regime. “It’s not the Iranian people,” Mattis added. “We are convinced it’s a regime that is conducting itself in order to stay in power in Tehran as a revolutionary regime, not as a proper nation-state. They are not looking out for the best interests of their own people.”

    Maybe that’s true enough, but surely dozens of governments fail to represent their populace the world over. That doesn’t necessitate regime change, does it? Such rhetoric raises tensions and threatens to stoke nationalist tendencies in Iran which work to the advantage of relative hardliners.

    The View from Tehran

    After all, try and view the last decade of U.S. military actions from Tehran. Washington toppled and seemingly permanently occupied Iran’s neighbors on its western (Iraq) and eastern (Afghanistan) flanks, encircled the country with its military bases, and intervened in just about every country in its neighborhood.

    Iranian C-14 missile boat.

    I remember way back in August 2002, and even then the rhetoric was chilling: “Everyone wants to go to Baghdad. Real men want to go to Tehran,” a British official close to the President Bush team told Newsweek in the lead up to the Iraq War. Who could rationally blame Iran’s leaders for fearing they were next? And who would be surprised to see them turn to Shia militias to trap the U.S. military in a Baghdad quagmire? That’s basic survival instincts. While not excusing their tactics, it’s undeniable that their approach enhanced their standing vis-à-vis Iraq and the region—an unintended consequence of ousting Saddam Hussein.

    Iranians also have a long memory. The CIA helped overthrow a democratically elected government in Tehran in 1953. Then, throughout the 1980s, the U.S. backed Saddam Hussein in Iraq’s brutal invasion of Iran. Heck, President Reagan even sent one Donald Rumsfeld (remember him?) to make nice with Saddam.

    None of this sordid history obviates Iran from acting responsibly in the region—but this must serve as a reality check for Washington’s triumphalism and an unfathomable commitment to strategic overreach. Walking the proverbial mile in an adversary’s shoes isn’t “soft,” it’s smart. Only by understanding the motives of other countries can we correctly predict and counter actions that undermine America’s interests.

    Military Action: A Bad Idea

    Iran’s military is far from the imposing behemoth threat of hawkish imagination. In fact, Saudi Arabia is much better armed and could likely handle Iran by itself—remember, it spends more than five times much on its military than Iran.

    Nonetheless, Iran is spatially large and mountainous with an enormous, fiercely nationalist population. Make no mistake, U.S. military occupation of the Islamic Republic would make the Iraq War, for once, actually look like the “cakewalk” it was billed to be.

    America’s armed forces are currently spread thin in a dozen simultaneous operations and deployed in nearly 70 percent of the world’s countries. The Army alone is rotating brigades to deter Russia in Eastern Europe; manning the DMZ in South Korea; training and advising across Africa; conducting raids in Somalia, Yemen, and Niger; and actively fighting in Syria, Iraq, and Afghanistan.

    So where are the troops available to topple Tehran? They don’t exist. The U.S. military is already running at full throttle, and the American people won’t be flocking to recruiters to stave off an overhyped, distant Iranian threat. The polling data is clear: Americans don’t want another war.

    Ubiquitous, over-the-top proclamations aside, Iran’s various regional interventions have been more cost than benefit for Tehran and largely defensive in nature—look no further than recent protests throughout Iran for proof. Iran isn’t seeking a New Persia any more, or less, than our purported Turkish (NATO) ally’s dream of a revamped Ottoman Empire. That’s rhetoric, not reality. And these days, with Turkish tanks just miles from U.S. forces in Syria and openly threatening Washington, guess who the greater threat is?

    Indeed, it might be time for Washington to swallow its pride and admit to some common interests with Iran in the region—the defeat of ISIS, suppression on Sunni Islamists, and a stable, non-threatening Afghanistan—rather than harping on the exaggerated negatives.

    Look, I don’t take any of this lightly. Iranian-supplied bombs killed two of my soldiers on January 25, 2007. Still, it’s important to remember, no Iranians have attacked the homeland since 9/11 (not something that can be said of our many autocratic “allies” in the region). The proper role of the U.S. military is to prevent enemies killing Americans, not to keep rival Mid-East factions from killing each other.

    Forget a new war. Iran isn’t worth it. Not now, probably not ever. The U.S. military is busy, thank you very much. And any trouble it causes can easily be countered by our partners and allies in the region.

    Washington should ditch the alarmism and get real in the complex Middle East.

  • Was This $1,600 Uber Ride The Most Expensive Ever?

    One New Jersey native took the Uber ride of his life last Friday when he accidentally requested that his driver bring him back to his home, in Gloucester County, New Jersey, from Morgantown, West Virginia, where he had been partying with friends at WVU.

    Uber

    The rider, Kenny Bachman, thought he had requested a ride back to his friend’s house near campus. Instead, he passed out, and when he woke up two hours later, his driver told him they were on their way to New Jersey.

    “I just woke up,” Bachman told NJ Advance Media in a phone interview.

    “And I’m thinking, ‘Why the f— am I in the car next to some random ass dude I don’t even know?”

    The final price was a steep $1,635.93 – which is a lot of money for a college student.

    And what’s worse, Bachman inadvertently chose the more-expensive option at seemingly every turn. He requested an UberXL instead of an UberX, and his ride was also subject to surge pricing, which practically doubled its cost. 

    The Uber driver didn’t have money for tolls, and was fined at every tollbooth. When they did get back to New Jersey, Bachman went to a CVS in Sewell and got cash back to give him money for tolls on the way back.

    Bachman gave his driver five stars, but he contested the charge, arguing that the driver accessed his phone without his permission, and that he remembers putting in his friend’s address, not his home address.

    Uber confirmed that the ride did indeed occur and that the driver took the rider to the destination he requested. Uber also connected with Bachman and resolved the matter, which ended with Bachman agreeing to pay the fare.

  • The Faster America "Grows", The Faster America Goes Bust

    Authored by Chris Hamilton via Econimica blog,

    As of October 1st of 2007 (the start of the 2008 Federal Government fiscal year), federal debt stood at $9 trillion and 70 billion.  In the subsequent ten years and nearly five months, the US federal debt has grown $11 trillion and 785 billion and now stands at $20 trillion and 855 billion (chart below).  Over the same period, US GDP grew $5 trillion and 169 billion. 

    Simply put, for every $1 of new federal debt undertaken, the US achieved $0.44 cents of economic activity or “growth”.  However, as the chart below shows, the huge increase in federal debt (red line) was accompanied by a minimal increase in interest payable on all that debt (blue line).  The boxes detail the total debt incurred during each period against the annual increase in interest payments on that additional debt.  The Federal Reserve is primarily to thank for the cheapening of debt and encouragement to undertake all that debt, but many fear the same Fed is set to hike those interest payments with its ongoing rate hikes.

    In nearly five months of fiscal year 2018 (through Feb 27), the Treasury has already issued $611 billion in new debt.  The Treasury is on pace to issue $1.2+ trillion in new debt (2017 was a mere $672 billion increase).  But let’s be conservative and assume the Treasury reins it in and “only” issues another $389 billion over the next seven months…for a nice round $1 trillion in new debt.  Big numbers are hard to comprehend, so I’ll show just the added responsibility from the debt undertaken in 2018, per every full time employee in the US (there are 127 million FT US employees):

    +$31 a day
    +$157 week
    +$658 month
    +$7.9 thousand annually

    This would be in addition to the $163 thousand every full time employee is already responsible for.  But, sadly, this vastly understates the issue.  According to the Treasury’s 2017 Financial Report of the US Government, the “total present value of future expenditures in excess of future revenues” is $49 trillion in addition to the federal debt!!!  Simply said, Social Security and Medicare require $49 trillion here and now to allow that money to grow at a compounded annual rate in conjunction with estimated future tax revenues to meet the present and future payouts that have been promised.

    The US Treasury is telling you that between the federal debt and unfunded liabilities, the US is $70 trillion in the hole and despite record tax revenue, record stock and real estate valuations…the US is bankrupt.  Of course, the US can never “technically” go bankrupt as it will issue new debt at an accelerating rate to pay the old debt…but this has been the “end times” for every empire.  Debasement is the functional equivalent of national bankruptcy, the only means to pay the just the interest on the debt is creation of new debt at an accelerating rate.

    So, a little focus on that $49 trillion unfunded liability (UL) portion (solid red line) seems due.  Charted below is the UL, according to the US Treasury, from 2000 through 2017 alongside the federal debt (dashed red line), and Gross Domestic Product (market value of all goods and services provided, annually).

    Clearly, UL’s and federal debt are far larger and growing so much faster than economic growth represented by GDP.  Since ’00, GDP has not quite doubled (+88%) while UL’s have more than doubled (+157%) and federal debt has nearly tripled (+258%).  You may notice a dip in the UL from 2009 to 2010…a $15 trillion dip essentially overnight, when America’s UL fell by a third?!?  This was the estimated impact of the ACA, aka Obamacare.

    The UL is made up of four primary components; the OASDI (Old Age, Survivors, and Disability Insurance), Medicare Part A, B, and D.  The UL components are broken out below (again, according to the US Treasury Financial Report of the United States Government)…

    • The OASDI deficit has been growing consistently.

    • Medicare, Part A…the liability fell by 80% with the passage of ObamaCare and has essentially been unchanged since.

    • Medicare, Part B…the liability fell by 25% with the passage of ObamaCare, but has again been rapidly increasing.

    • Medicare, Part D…the liability has essentially been unchanged since 2000.

    The chart below details the unfunded liabilities, by source, and federal debt.

    To comprehend the magnitude of the growing unfunded liabilities,  I’ll briefly explain what each is and show its revenues vs. expenditures on a net present value basis.

    OASDI (Old Age, Survivor, Disability Insurance)

    What – Federal program that provides earned benefits to retirees, their beneficiaries, and the disabled.
    Eligibility – If you worked minimum of 10 years and are at least 62 years old (for partial benefits) or 65+ (rising to 67) for full benefits.  Presently, 61 million beneficiaries vs. 127 million full time employees.  Beneficiaries set to swell, quantity of full time employees likely to be little changed.
    Unfunded Liability – UL is $15.4 trillion and set to grow rapidly as revenue stalls versus fast growing expenditures.

    Medicare Part A

    What – Hospital Care, nursing facility care, limited home health care, hospice care.
    Eligibility – 65+ year olds receiving SS or those disabled (also those with ALS), typically no premium is paid.  Presently 44 million Americans enrolled in Medicare.
    Unfunded Liability – With the passage of the Affordable Care Act (aka, Obamacare) in 2010, it was estimated that the gross costs of the ACA would be more than offset by reductions in Medicare spending, increased revenue, etc.  The massive Part A UL was estimated to have been reduced by 80%.   

    Medicare Part B

    What – Outpatient care, preventative care, ambulance services, durable medical equipment.
    Eligibility – If eligible for Part A, you are eligible for Part B plus paying a premium.
    Unfunded Liability – The UL is huge and growing faster than any other liability.

    Medicare Part D

    What – Prescription drug coverage.
    Eligibility – If you are eligible for Part A and/or Part B, you are eligible for Part D.  Monthly premiums and out of pocket expenses help subsidize prescription drugs, premiums vary by plan.
    Unfunded Liability – I only have full data back to ’04 for Part D…but apparently the UL is large but stable?!?

    The problem areas should be fairly easy to see; Federal Debt, OASDI (SS), and Medicare Part B.  I have major questions regarding the assumptions going into these and the validity of these numbers?  Big questions regarding the assumptions of reduced costs via the ACA,and the potential impacts of an Obamacare repeal on the unfunded liabilities?  I have detailed why this situation is only going to worsen, (HERE) because of decelerating population growth among the young and surging growth among the elderly.  But still, the above is the governments baseline from which they are working and I think it’s important to at least know that.

    But in search of higher economic growth rates, the US federal government is again running huge deficits in a vain attempt to grow its way out of the hole it finds itself.  In an attempt to hit a growth “home run” and achieve 3.5% GDP (or about a $700 billion increase in economic activity via debt fueled deficit spending), the federal government will undertake $1+ trillion in new debt plus $2 to $3 trillion increase in unfunded liabilities.  If a more realistic 2% GDP growth is achieved, that’s a $400 billion “growth” on a net increase of $3 to $4 trillion in federal debt and UL’s.  The chart below shows annual GDP “growth” minus the annual deficit incurred to achieve the growth, from 2000 through 2017.  Plus estimated “growth” through 2025 based on 2% GDP “growth”?!?

    And no one sees a problem with this math???  Said more simply, the faster America “grows”, the faster America functionally goes bankrupt (detailed HERE).

  • Delta Reveals Only 13 Passengers Used NRA Discount Which Cost Airline $40 Million Tax Break

    Delta Air Lines is paying a hefty price for jumping on the gun control bandwagon in the wake of the February 14 school shooting in Parkland, FL. After eliminating a discount for NRA members, the Georgia state legislature responded by eliminating a $40 million discount on jet-fuel which had been part of a larger tax package. 

    Delta admitted, however, that only 13 people had taken the airline up on the NRA discount – which translates to roughly $3 million per discount in tax breaks. While one can imagine Delta looked at the low participation rate and felt the discount was an expendable token to jump on the anti-gun bandwagon, they probably didn’t see the Georgia legislature coming:

    Georgia GOP lawmakers signed into law a broad tax bill which had been amended to kill a proposed break on jet fuel, signed into law by Georgia Governor Nathan Deal – despite objecting to the Delta fight as an “unbecoming squabble.” 

    In response, Delta CEO Ed Bastian sent out a memo to employees that insisted the airline’s aim is to stay neutral in the gun debate. 

    “While Delta’s intent was to remain neutral, some elected officials in Georgia tied our decision to a pending jet fuel tax exemption, threatening to eliminate it unless we reversed course,” Bastian said. “Our decision was not made for economic gain and our values are not for sale.”

    Delta will also review discounts offered to other politically involved groups. “We are in the process of a review to end group discounts for any group of a politically divisive nature,” Bastian said.

    Delta is one of Georgia’s largest private employers – a state in which 31.6% of residents own firearms.

    The NRA and Georgia GOP legislators argued that Delta’s elimination of the NRA discount amounted to a punishment for people who cherish the Second Amendment. 

    The Georgia Senate passed the tax measure 44-10 after the jet-fuel provision was removed, while the House followed with a 135-24 vote. 

     

  • Charles Nenner: "We're Totally Out Of Stocks, What's Coming Is Big"

    Authored by Greg Hunter via USAWatchdog.com,

    Renowned geopolitical and financial cycle expert Charles Nenner says forget what the mainstream media talking heads are telling you about this market.

    Nenner says, “When unemployment is low, it’s the end of the bull market.  Last Sunday, I published a chart that shows every time the unemployment is around 4.1% or 4.2%, and you can see this in 1973, 1987, 1990 and 2007, and you can go on and on, and now, also, you have a market crash.  I find it amazing that people can come on television and say things that are totally wrong factually, and you can prove it is wrong.”

    So, Charles Nenner is calling a top right now, but the market is not going to go straight down. Market tops are a process.  Nenner explains,

    “The cycles saw a market top.  It doesn’t always have to come down immediately, it just means the market will not go higher.  I don’t think we will go back to the highs one more time because the quarterly cycle, and it is a long cycle, did top at the end of last year.  I also want to put in a caveat about all this talk that we are in a 10% correction.  Somebody came up with 10%, and it is not based on anything…

    The fact is we are totally out of stocks.  What is coming is big, but market tops take time.  I don’t think it’s going to go down immediately.”

    When will this new bear market hit bottom? Nenner says,

    “We should hit a major low in 2020… I have been on record saying that the next bear market goes down to 5,000.  If you are in stocks, I say you could lose everything if the DOW goes to 5,000.  This is the price target I have had for a couple of years.”

    What does Nenner think you should buy for protection? Nenner says,

    “You buy gold because nothing else is going to keep its value.  Gold is going, as I have said for a long time, to $2,500 (per ounce) at least.  Again, you buy gold because nothing else will keep its value. 

    Stocks can go down, you can get stuck with some losses in the bond market, the housing market will go down based on homebuilder stocks and the financial system can scare you.  So, what is left? Buy gold.”

    Join Greg Hunter as he goes One-on-One with financial expert Charles Nenner of the Charles Nenner Research Center.

    (To Donate to USAWatchdog.com Click Here)

    After the Interview: 

    Charles Nenner points out if you look back every year that ended in the number 7, it was a market top year. He said, “2017 will follow the same pattern as 2007, 1997, 1987, 1977, 1967, 1957, 1947 and 1937.”  Nenner contends 1927 was supposed to be a market top year, but things got distorted and it was pushed off until 1929.

    Nenner predicts the next market crash will not be quite as bad as 1929, but it will be bad.

    There is free information and videos on CharlesNenner.com. To sign up for a free trial of Nenner’s detailed analysis, click here.

Digest powered by RSS Digest

Mar 02

Today’s News 2nd March 2018

  • Tor Project "Almost 100% Funded By The US Government": FOIA

    The Tor Project – a private nonprofit known as the “NSA-proof” gateway to the “dark web,” turns out to be almost “100% funded by the US government” according to documents obtained by investigative journalist and author Yasha Levine.

    The Tor browser, launched in 2001, utilizes so-called “onion routing” technology developed by the US Navy in 1998 to provide anonymity over computer networks. 

    In a recent blog post, Levine details how he was able to obtain roughly 2,500 pages of correspondence via FOIA requests while performing research for a book. The documents include strategy, contract, budgets and status updates between the Tor project and its primary source of funding; a CIA spinoff known as the Broadcasting Board of Governors (BBG), which “oversees America’s foreign broadcasting operations like Radio Free Asia and Radio Free Europe.”

    By following the money, I discovered that Tor was not a grassroots. I was able to show that despite its indie radical cred and claims to help its users protect themselves from government surveillance online, Tor was almost 100% funded by three U.S. National Security agencies: the Navy, the State Department and the BBG. Following the money revealed that Tor was not a grassroots outfit, but a military contractor with its own government contractor number. In other words: it was a privatized extension of the very same government that it claimed to be fighting.

    The documents conclusively showed that Tor is not independent at all. The organization did not have free reign to do whatever it wanted, but was kept on a very short leash and bound by contracts with strict contractual obligations. It was also required to file detailed monthly status reports that gave the U.S. government a clear picture of what Tor employees were developing, where they went and who they saw. –Yasha Levine

    The FOIA documents also suggest that Tor’s ability to shield users from government spying may be nothing more than hot air. While no evidence of a “backdoor” exists, the documents obtained by Levine reveal that Tor has “no qualms with privately tipping off the federal government to security vulnerabilities before alerting the public, a move that would give the feds an opportunity to exploit the security weakness long before informing Tor users.”

    Exit nodes

    Cybersecurity experts have noted for years that while Tor may be technically anonymous in theory – the ‘exit nodes’ where traffic leaves the secure “onion” protocol and is decrypted can be established by anyone – including government agencies.

    Anyone running an exit node can read the traffic passing through it. 

    In 2007 Egerstad set up just five Tor exit nodes and used them to intercept thousands of private emails, instant messages and email account credentials.

    Amongst his unwitting victims were the Australia, Japanese, Iranian, India and Russia embassies, the Iranian Foreign Ministry, the Indian Ministry of Defence and the Dalai Lama’s liaison office.

    He concluded that people were using Tor in the mistaken belief that it was an end-to-end encryption tool.

    It is many things, but it isn’t that.

    Dan Egerstad proved then that exit nodes were a fine place to spy on people and his research convinced him in 2007, long before Snowden, that governments were funding expensive, high bandwidth exit nodes for exactly that purpose. –Naked Security

    Interestingly, Edward Snowden is a big fan of Tor – even throwing a “cryptoparty” while he was still an NSA contractor where he set up a Tor exit node to show off how cool they are. 

    In a 2015 interview with The Intercept’s (Wikileaks hating) Micah Lee, Snowden said: 

    LEE: What do you think about Tor? Do you think that everyone should be familiar with it, or do you think that it’s only a use-it-if-you-need-it thing?

    SNOWDEN: I think Tor is the most important privacy-enhancing technology project being used today.

    “Tor Browser is a great way to selectively use Tor to look something up and not leave a trace that you did it. It can also help bypass censorship when you’re on a network where certain sites are blocked. If you want to get more involved, you can volunteer to run your own Tor node, as I do, and support the diversity of the Tor network.”

    Interesting...

  • Prisons Of Pleasure Or Pain: Huxley's "Brave New World" Vs. Orwell's "1984"

    Authored by Uncola via TheTollOnline.com,

    Definition of UTOPIA

    1: an imaginary and indefinitely remote place

    2: a place of ideal perfection especially in laws, government, and social conditions

    3:   an impractical scheme for social improvement

     

    Definition of DYSTOPIA

    1: an imaginary place where people lead dehumanized and often fearful lives

    2: literature: anti-utopia

    – Merriam-Webster.com

    Many Americans today would quite possibly consider Aldous Huxley’s “Brave New World” to be a utopia of sorts with its limitless drugs, guilt-free sex, perpetual entertainment and a genetically engineered society designed for maximum economic efficiency and social harmony.

    Conversely, most free people today would view Orwell’s “1984” as a dystopian nightmare, and shudder to contemplate the terrifying existence under the iron fist of “Big Brother”; the ubiquitous figurehead of a perfectly totalitarian government.

    Although both men were of British descent, Huxley was nine years older than Orwell and published Brave New World in 1932, seventeen years before 1984 was released in 1949. Both books are widely considered classics and are included in the Modern Library’s top ten great novels of the twentieth century.

    Brave New World

    Aldous Huxley was born to academic parents and he was the grandson of Thomas Henry Huxley, a famous biologist and an enthusiastic proponent of Darwin’s Theory of Evolution who was known as “Darwin’s Bulldog”. Huxley’s own father had a well-equipped botanical laboratory where young Aldous began his education. Given the Huxley family’s appreciation for science, it makes perfect sense that Brave New World began in what is called the “Central London Hatchery and Conditioning Centre” where human beings are artificially grown and genetically predestined into five societal castes consisting of: Alpha, Beta, Gamma, Delta and Epsilon.

    Initially, the story centers on Bernard Marx, who is a slightly genetically flawed Alpha Plus psychologist with an inferiority complex due to his short stature. By the end of the novel, however, the protagonist becomes a boy named “John the Savage” who is the bastard child of the “Director of the Central London Hatchery”, and a lady named Linda, who naturally birthed John on a remote American Indian Reservation. When Bernard discovers the true identities of John and Linda, he arranges to fly them back to London in order to leverage his position with John’s biological father, the Hatchery Director.

    Bernard is in love with a beautiful fetus technician named Lenina Crowne, who, upon meeting John the Savage falls madly in lust. Lenina is a gal who enjoys multiple lovers because, in the Brave New World, “everyone belongs to everyone else”. In other words, sexual promiscuity is encouraged as sort of a societal “pressure relief valve” designed to discourage negative emotions such as jealousy and envy. John the Savage, however, suppresses his sexual attraction to Lenina because he considers her a slut.

    Eventually, John’s sexual repression contributes to him violently attacking some children of the Delta caste who were waiting in line for their “Soma”, a mood-altering drug; and the outburst causes both Bernard and John to be brought before the powerful Mustapha Mond, who is one of ten world controllers. A debate ensues between John and Mr. Mond who explains to the Savage that a stable society requires the controlled suppression of science, religion, and art. John, who is an avid admirer of William Shakespeare, argues that human life is not worth living without these things.

    In Brave New World, the State achieves a harmonic equilibrium via the economic parity of production and consumption while utilizing Eugenics as a means to counterbalance the life and death of the citizens. Technology is employed as a means of control in lieu of any search for scientific, or spiritual, truth; as these are considered a threat to the established order. People are cloned in hatcheries in accordance to the needs of the State and trained into obedience through “Hypnopedia”, or sleep-teaching. Happiness is valued over dignity and morality, and emotions are regulated through the use of the drug, Soma, amid constant entertainment including superficial games and virtual reality venues called the “feelies”. Although there is no God or religion, per se, in Brave New World, Henry Ford is canonized in the place of a deity as a testament to corporate efficiency, assembly line production and rampant consumerism.

    1984

    Like Huxley, George Orwell also envisioned a future where government monitored and controlled every aspect of human life; yet the world is much more terrifying in 1984. Orwell actually volunteered and fought in the Spanish Civil War in 1936 before being injured by a sniper’s bullet in May of 1937; it was there where he witnessed, first-hand, the ghastly barbarism of political fascism. Moreover, he previously observed the rise of Joseph Stalin in the Soviet Union and, later, Adolf Hitler in Germany. In turn, Orwell published Animal Farm in 1945 and four years later, his novel 1984, as literary warnings to mankind.

    The setting of 1984 takes place in a futuristic, post-apocalyptic Great Britain which, at that time, was part of “Oceania”; one of three world super-states all engaged in never-ending warfare. The protagonist of the novel is Winston Smith, a middle-class member in the Outer Party of INGSOC, a totalitarian regime led by the figurehead known only as “Big Brother”.

    Winston works in the Records Department of the “Ministry of Truth” where he revises history on behalf of the Party while under constant surveillance both at work and home. Everywhere he goes; there are posters with a photo of the party’s leader and the words: “BIG BROTHER IS WATCHING YOU”. In an act of rebellion, Winston acquires a diary and begins to record what Big Brother and the INGSOC party would label as “crimethink” and “thoughtcrime”.

    Eventually, Winston meets and falls in love with a beautiful coworker named Julia, and they engage in what they believe to be a secret affair whereby they have illicit sex as a form of political rebellion. In 1984, the Party members living in Oceania are brainwashed to have sex only for procreation and this is how sexual repression is channeled into enthusiasm for the State.

    Under the threat of detection by the “Thought Police”, torture and even “vaporization”, which would eliminate every last vestige of proof he ever existed, Winston persists in his rebellion against the Party with certain fatalism. In fact, just before he and Julia are captured by the militant, jackbooted INGSOC Party authoritarians, Winston told Julia “we are the dead”; to which she replied the same words back to him.

    Throughout Orwell’s dark narrative, various themes are explored such as “Newspeak” which is a language of mind control; the terrifying tyranny of totalitarianism; historical revisionism; torture, and psychological manipulation. The INGSOC Party’s prisonlike control and complete invasion of individual privacy is such that a citizen’s own facial expression could betray their inner disloyalty to the Party through what Orwell labeled as “crimeface”:

    Your worst enemy, he reflected, was your own nervous system. At any moment the tension inside you was liable to translate itself into some visible symptom.

    – Winston Smith, 1984, part 1, chapter 6

    Orwell was near prophetic in describing the proliferation of listening devices in both public and private settings as well as “telescreens”, which simultaneously broadcast propaganda while relaying live video feeds back to the Party watchers. In Orwell’s chilling story, free will and individuality are sacrificed to the extreme demands of Collectivism and in deference to complete societal control by an authoritarian government.

    Compared and Contrasted

    In both, Brave New World and 1984, common themes are addressed including government, orthodoxy, social hierarchy, economics, love, sex, and power. Both books portray propaganda as a necessary tool of government to shape the collective minds of the citizenry within each respective society and towards the specific goals of the state; to wit, stability and continuity.

    In Brave New World, The “Bureaux of Propaganda” shared a building with the “College of Emotional Engineering” and all media outlets including radio, television, and newspaper. Much of the brainwashing of the citizens in Huxley’s world included messaging to stay within their genetically predetermined castes or to encourage the daily use of the drug, Soma, in order to anesthetize emotional agitation:

    a gramme in time saves nine

    A gramme is better than a damn

    One cubic centimetre cures ten gloomy sentiments

    When the individual feels, the community reels.

    The “Ministry of Truth”, in 1984, also known as “minitrue” in Newspeak, served as the propaganda machine for Big Brother and the INGSOC regime. Although its main purpose was to rewrite history in order to realign it with Party doctrine and make the Party look infallible, the Ministry of Truth also promoted war hysteria in order to unite the citizens of Oceania while broadcasting simple messages designed to discourage any self-determination or autonomous thought.

    Who controls the past controls the future. Who controls the present controls the past.

    war is peace

    freedom is slavery

    ignorance is strength

    Whereas the citizens of Brave New World used the drug Soma and cursory material distractions to vanquish any desire for real knowledge or truth; the “memory hole” in 1984 was a chute connected to an incinerator and served as the mechanism by which the Ministry of Truth would abolish historical archives as if they never existed.

    In other words, truth was unimportant to the citizens of Brave New World and it was summarily rescinded from the realm of 1984.

    Furthermore, in order to additionally fill the empty existence of those living in Brave New World, Huxley envisioned a character by the name of Helmholtz Watson as a creator of hypnopaedic phrases designed to fill the mental and emotional vacuum vacated by knowledge:

    Alpha children wear grey. They work much harder than we do, because they’re so frightfully clever. I’m really awfuly glad I’m a Beta, because I don’t work so hard. And then we are much better than the Gammas and Deltas. Gammas are stupid. They all wear green, and Delta children wear khaki. Oh no, I don’t want to play with Delta children. And Epsilons are still worse. They’re too stupid to be able to read or write. Besides, they wear black, which is such a beastly colour. I’m so glad I’m a Beta.

    – BNW, Chapter 2, pg. 27

    In 1984, however, Orwell conceived of a character named Syme, who was an enthusiastic Newspeak redactor of language:

    It’s a beautiful thing, the destruction of words.

    Don’t you see that the whole aim of Newspeak is to narrow the range of thought? In the end we shall make thoughtcrime literally impossible, because there will be no words in which to express it. Every concept that can ever be needed will be expressed by exactly one word, with its meaning rigidly defined and all its subsidiary meanings rubbed out and forgotten.

    – Syme, 1984, part 1, chapter 5

    In Brave New World, Helmholtz Watson worked to fill the mind of people with hypnotic messages. In 1984, Syme strived to remove words from the English language in order to eliminate what the Party considered to be “thoughtcrime”.

    Although the methodologies varied, mind control was prevalent throughout both the fictional worlds of Huxley and Orwell.

    Social hierarchies were also present in both futuristic novels. The citizens of Brave New World consisted of the Alpha caste which held the highest jobs in the world state, and Betas, who were allowed to interact with the Alphas. The Gamma’s were considered to have average intelligence, they were eight inches shorter than Alpha’s in height, and they maintained the office jobs and held administrative positions. The Delta’s were trained from a very young age to despise books and were conditioned to work in manufacturing, while the Epsilon caste members were considered as morons who performed the menial labor within the lowest strata of society.

    Although 1984 doesn’t have a caste system, per se, the citizenry were still separated into three groups: the Inner Party, the Outer Party, and the Proles, or the proletariat. The Proles constituted 85% of the population and were allowed privacy and anonymity, yet they lived in extreme privation in pursuit of bread and circuses.

    As the Party slogan put it: ‘Proles and animals are free.’

    – ”1984”: part 1, chapter 7

    Although both Inner and Outer Party members of 1984’s Oceania lived under constant surveillance, the members of the Inner party led lives of relative luxury compared to the middle-class lifestyle of those within the Outer Party. Additionally, the members of the Outer Party were denied sex, other than within marriage and for the sole purposes of procreation. They were also denied motorized transportation and were allowed cigarettes and gin as their only vices.

    Governments of both Brave New World and 1984 also filtered information and propaganda in accordance to the class ranking of their citizens.

    In Brave New World, the separate castes, except for the Epsilons who couldn’t read, received their own newspapers delivering specific propaganda for each class of society; whereas the INGSOC party members of 1984 were allowed newspapers and to view broadcasted reports of world news via their telescreens.

    Even though there is no actual organized religion described in either book, there were deities endorsed by the government, primarily for economic reasons, and complete with mandated rigorous orthodoxies.

    Again, the aforementioned god of Brave New World was called “Ford”, after Henry Ford, in celebration of his efficient assembly-line production of goods that was worshiped by both the overseers and citizenry of the world state.

    In 1984, Big Brother served as the almighty “beginning and end”, creator, judge, grand architect and savior for the INGSOC party disciples.

    In Huxley’s vision of the future, the higher power of consumerism guided the people; complete with memorized short phrases designed to encourage the replacement of material items in lieu of repairing them; and, those wearing older clothes were shamed into purchasing new apparel:

    Ending is better than mending.

    The more stitches, the less riches.

    BNW, Chapter 3, pg. 49

    Orwell, on the other hand, considered war as the means by which a collectivist oligarchy could maintain a hierarchical society by purging the excess production of material goods from the economy; thus, keeping the masses impoverished and ignorant by denying them the surplus “spare time” that is afforded via the convenience of modern technology:

    The essential act of war is destruction, not necessarily of human lives, but of the products of human labour. War is a way of shattering to pieces, or pouring into the stratosphere, or sinking in the depths of the sea, materials which might otherwise be used to make the masses too comfortable, and hence, in the long run, too intelligent.

    — Emmanuel Goldstein, ”1984”: part 2, chapter 9

    The futuristic societies envisioned by Huxley and Orwell, additionally, both discouraged romantic love, yet diverged on the subject of sex. As mentioned earlier, Brave New World treated sex as a “pressure relief valve” remaining constantly open in order to release any negative emotions like suspicion, distrust, jealousy, rage or envy. “Everyone belonged to everyone else”, so there was no need for secrets. Even children were encouraged to sexually experiment guilt free. Of course, sex was meant to be enjoyed only as a means of pleasure in Brave New World; as procreation was considered an anathema by the people and beneath the dignity of mankind.

    In Orwell’s dark dystopia, however, promiscuous sex was encouraged among the proletariat and the Ministry of Truth even had a pornography division called “Pornosec”, which distributed obscene media for consumption by the Proles alone. Conversely, and also as mentioned prior, the members of the INGSOC party were required to abstain from sex; except for married couples attempting to procreate solely on behalf of the government.

    In reading both books, it was also fascinating to see how both Huxley and Orwell painted their female protagonists, Lenina Crowne and Julia, respectively, as shallow nymphomaniacs.

    Nevertheless, the procreative sterilized purity and casual sexual promiscuity of Brave New World along with 1984’s hierarchical rationing of sex, combined with the twisted morality of the INGSOC Party, represented the power of government invading into the most personal means of expression, and engenderment, between individuals of both worlds.

    The concept of “everyone belongs to everyone else” in Brave New World allowed intimate acts to be considered merely as trivial recreation whereas the Party’s power over copulation in 1984, created a sense of fatalism within Winston and Julia as they made love knowing they were “the dead”.

    In spite of any differences, both scenarios were the end result of extreme philosophical collectivism manifested into distorted and perverse destinies of speculative, future populations.

    The Future is Now

    For reasons described heretofore, many might consider Brave New World to be a utopian dream. In the context of individual autonomy, however, as well as the pursuit of truth, the opportunity for personal self-actualization, the dilemma of ethical considerations and the governmental dispensation of immoral law; Huxley’s vision of the future removes the lid of a veritable Pandora’s Box of questions. In reality, the societal structure as delineated in Brave New World would greatly resemble what could be called a “prison of pleasure” and, perhaps, even a “penitentiary of profligate practicality”.

    Applying the same philosophical critique of 1984, and in similar fashion, Orwell’s nation-state of Oceana would be considered as a bona fide dystopian “prison of fear”.

    As a matter of fact, both societies portray prisons of man’s own making, formed by governments following their own directions toward their respective future destinations. To say it another way: The road to hell is actually paved with bad intentions. As the Inner Party member (and administrator of torture), “Obrien”, admitted to Winston Smith in Room 101 of The Ministry of Love:

    We know that no one ever seizes power with the intention of relinquishing it.Power is not a means; it is an end. One does not establish a dictatorship in order to safeguard a revolution; one makes the revolution in order to establish the dictatorship. The object of persecution is persecution. The object of torture is torture. The object of power is power.

    – Obrien, ”1984”: part 3, chapter 3

    Both power structures in Brave New World and 1984 chose to diminish individual rights in order to achieve societal stability. To the governments of both super-states, their citizens were considered as mere “means to an end”; namely, the continuation of power.

    Now I will tell you the answer to my question. It is this. The Party seeks power entirely for its own sake. We are not interested in the good of others; we are interested solely in power. Not wealth or luxury or long life or happiness; only power, pure power. What pure power means you will understand presently. We are different from all the oligarchies of the past in that we know what we are doing. All the others, even those who resembled ourselves, were cowards and hypocrites. The German Nazis and the Russian Communists came very close to us in their methods, but they never had the courage to recognize their own motives. They pretended, perhaps they even believed, that they had seized power unwillingly and for a limited time, and that just round the corner there lay a paradise where human beings would be free and equal. We are not like that.

    – Obrien, ”1984”: part 3, chapter 3

    This is a perfect description of mankind striving to be as gods; an attempt to create metaphysical law from carnal desire. Foregone were the virtues of mercy, humility, temperance, autonomy, self-reliance, and restraint.

    Mustapha Mond, one of ten world controllers in Brave New World and the evil Obrien of 1984’s nation of Oceana, both knew what they were doing. They were fully conscious in order to exert complete control and ensure the continuation of their respective, fictional nation-states.

    But, could this type of power consolidation occur in the real (non-literary) world?

    To answer that question one only needs to study history then, go turn on all of the various “telescreens” in their private homes: Televisions, smartphones, tablets, lap-taps and desktop computers. Tyrannical regimes have been centralizing and fortifying ramparts of power from the time man first crushed grapes. And, obviously, as the exiled enemy of the State, Edward Snowden, has revealed, modernity is no antiserum to the cancerous systematization of power.

    When considering the prosperous technological paradise of Brave New World, where the societal elite had unrestricted access to intercontinental transportation and private helicopters; where even the lower classes enjoyed pampered lives of perennial comfort, ceaseless entertainment, and eternal recreation; as compared to the dingy, post-apocalyptically war-torn, third-world existence of 1984; it becomes difficult not to view both Huxley and Orwell as prophets.

    Indeed, both futures have come to pass and are merely economically separated and dispersed into diverse geographic locations.

    Today, it is the westernized cultures of the world, including Asian nations like Japan and South Korea, that more closely resemble Brave New World, whereas vestiges of 1984 can be seen in the eastern bloc communist countries, China, North Korea and the Islamic societies of the middle-east.

    Although Adam Smith’s “invisible hand” of Capitalism had created a rising economic tide that lifted many boats; much of the world’s population still languishes in squalor and will never rise from the muck.

    Moreover, even the modernized nations today have sacrificed individual freedom upon the altar of Collectivism as political correctness stifles free speech; families suffocate beneath mountains of debt and United Nations Agenda 21 policies release a deluge of regulations causing extra-governmental autonomous innovation to collapse before the inexorable, gravitational pull of the hive-mind.

    Corporations like Amazon, Google, Microsoft, Samsung and Apple have become the eyes and ears of Big Brother who is always watching, and ever listening.

    To the sounds of mouse-clicks, once free people have “accepted” the “terms” of their surrender and have forfeited their liberty in the name of convenience. Like buzzing insects, the citizens of modern societies are caught in silicon honey traps mortgaged with plastic and electronically powered via USB cable nooses wrapped tightly around their collective throats.

    The Technocratic Powers That Be wield weapons far more powerful than any time prior in history and soon, people will wake up to realize the electronic buzzing sound ringing in their ears was not emanating from their own wings, but rather, it was merely the sound of drones over their heads.

    Like in Brave New World, science now rules supreme over ethics as medical professionals sell fetus organs to advance the cause of genetic research. The United States currently leads the world in illegal drug use and consumes near all of the global opioid supply; according to U.S. Surgeon General Vivek Murthy:

    In most countries, the use of opioid prescriptions is limited to acute hospitalization and trauma, such as burns, surgery, childbirth and end-of-life care, including patients with cancer and terminal illnesses. But in the United States, every adult in America can have “a bottle of pills and then some.

    Just as 1984’s Ministry of Truth purveyed pornography to the Proles, statistics show at least 35% of all internet downloads and at least 30% of all data transferred across the internet are porn-related. Also similar to Huxley’s Brave New World, sex runs rampant throughout the modernized nations as cases of sexually transmitted disease have reached a record high in the United States.

    In correlation to the ever-expanding gulf between rich and poor, strict adherence to orthodoxy now determines how high one can rise in the societies of the westernized nations, as political correctness defines the faith of the pantheistic disciples of Mother Earth in the form of Gaia worship; and social hierarchy is increasingly determined via the identity politics of the collectivist left. The American body politic has now witnessed the rise of the warrior cop and the militarization of domestic law enforcement, as interminable wars are eternally fought on foreign shores and sovereign nations are bombed under false pretense.

    Even 1984’s “Victory Gin” has manifested in the form Russian Vodka within the eastern nations, as Oceania’s type of man-made orthodoxy silently drowns the human spirit in devastating despair, while contorted moralities overtake both the Christian and Islamic societies of the modern age.

    Orwell defined “doublethink” as:

    the power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them

    — Emmanuel Goldstein, ”1984”: part 2, chapter 9

    Only in wealthy westernized nations do billionaires own multiple mansions, fly private jets and ride in eight-cylinder limousines to climate-change conferences where policies are decreed to lower the carbon footprint of the proletariat. Only in wealthy westernized nations, do ever-increasing numbers of women consider white men to be pigs while simultaneously striving to be their equals. And, only in the wealthy Christian nations of the northern hemisphere will citizens support a women’s right to third-trimester abortions, while rigorously and righteously battling for legislation to save endangered dung beetles.

    Throughout Islamic societies, drinking alcohol and gambling is forbidden, but the governments and their citizens gladly tolerate canings, whippings, lashings, honor killings, suicide attacks, and the genital mutilation of young girls.

    This does NOT prevent, however, the citizens of the wealthy Christian nations in the West to welcome with open arms, and in the name of “tolerance”, the pervading flood of Islamic immigrants.

    The writings of Huxley and Orwell resonate by the echoes of history, over the canyons of time, and to the very cliff upon where mankind now stands. Propaganda daily spews via the machinations of five corporations which control 90% of all mainstream media channels. These companies toe the war-party line and wield their great powers of disinformation to contort facts or even censor the failures of the politicians whom they favor while, simultaneously, attacking their political enemies with lies and innuendo; even to the point of creating a phony election hacking narrative to satisfy their radioactive lust for war with nuclear powered enemies.

    Even the characters of both Brave New World and 1984 are resonant of familiar archetypes from days gone by. Brave New World portrayed the character Bernard Marx as being short like Hitler, with a small man’s inferiority complex and complete with the surname of Karl Marx, the eponymous founder of Marxism.

    The noble sounding Lenina Crowne’s name contains the surname of Vladimir Lenin, and Orwell’s portrayal of Julia does not seem overly diverse from former President’s Obama’s vision of “The Life of Julia”. Even the mustachioed, evil-eyed Big Brother from 1984’s dystopian nation of Oceana, looks eerily similar to just about every other tin-pot dictator who ever walked the earth.

    Art imitating life? Indeed.

    Yet the irony fails to impress America’s young social justice warriors of the Millennial generation who have been raised on a steady diet of socialism, political correctness, and participation trophies; a far cry from the rugged individualists of previous American generations. In the 2016 U.S. Democratic Party Primaries, and with the same sense of vague dissatisfaction as exhibited by Huxley’s Bernard Marx, millions upon millions of rainbow worshipping Snowflakes, old and young alike, turned out in force to show their support for another Bernard: Bernard Sanders, a redistributionist of the line of Robin Hood who, in the spirit of Santa Claus, offered free college educations to all of Uncle Sam’s children.

    Sadly, Big Brother is here to stay and, with time, he will only grow more bigly; regardless of any transitory elected politicians in the governments of the world’s “sovereign” nations today.

    Although Aldous Huxley and George Orwell valiantly spun fictional narratives in order to warn the real world’s future citizens, they were not alone in their efforts.

    On January 17, 1961, former President Dwight D. Eisenhower warned of an ever-encroaching “Military Industrial Complex” in his farewell address to the nation:

    In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

    Exactly 100 days after Ike’s farewell, on April 27, 1961, John F. Kennedy spoke before the American Newspaper Publishers Association in an address that later became known as his “Secret Society” speech. In that address, he stated the following:

    For we are opposed around the world by a monolithic and ruthless conspiracy that relies on covert means for expanding its sphere of influence: on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations. Its preparations are concealed, not published. Its mistakes are buried not headlined. Its dissenters are silenced, not praised. No expenditure is questioned, no rumor is printed, no secret is revealed. Without debate, without criticism, no Administration and no country can succeed– and no republic can survive. That is why the Athenian lawmaker Solon decreed it a crime for any citizen to shrink from controversy.

    Thirty months after that speech, President Kennedy was assassinated in Dallas, Texas on November 22, 1963.

    Many people consider Kennedy to have been the last American president not controlled by a financial global elite hell bent on world domination.

    In one of the twentieth century’s minor ironies, Aldous Huxley died on the very same day that John F. Kennedy was killed. It was also the exact day C.S. Lewis, the British author, and Christian apologist, passed from this earth.

    Coincidence? Only God knows.

    Regardless, by 1984 all had been forgotten; and, in a Brave New World, none of it really matters anyway.

  • The Army's Next High-Tech Assault Rifle Will Pack A Punch Like A Tank

    The United States Army is planning for decades of hybrid wars across multiple domains — space, cyberspace, air, land, and, maritime.

    Back in October, we dissected the Army’s latest Training and Doctrine Command report, which highlights the next round of hybrid wars could start somewhere around 2025 and last through 2040.

    Currently, the Army is in a transitional period before the next round of wars begin. In doing so, the Army has made it clear that it will replace its legacy M249 SAW and the M4 Carbine, with a lightweight and higher chamber pressure assault rifle.

    It now appears the Army has selected a new high-tech assault rifle that can release a high rate of specialty designed bullets with as much chamber pressure as an M1A2 Abrams tank, to pierce through the world’s most advanced body armor.

    The LSAT (Lightweight Small Arms Technologies) light machine gun is a powerful weapon produced by the AAI Corporation, an aerospace and defense development and manufacturing firm, located in Hunt Valley, Maryland. Textron acquired AAI in 2007 and currently operates as a unit of Textron Systems Corporation.

    Textron provides more information about the LSAT light machine gun: 

    Col. Geoffrey A. Norman, force development division chief at Army HQ, told Task & Purpose, “the service plans on fielding a Next Generation Squad Automatic Rifle (NGSAR) — the first version in the Army’s Next-Generation Weapons System that chambers a round between 6.5mm and 6.8mm — as a potential replacement for its 80,000 M249 SAWs starting in fiscal 2022 rather than the original target date of fiscal 2025.”

    Norman said the NGSAR will weigh less, shoot farther, and pack more punch than any the military’s existing small arms. More importantly, the colonel harped on the fact the chamber pressure of the weapon is far superior than any other light machine gun in the world, which means, a bullet from the machine gun can penetrate the most advanced body armor from around 600 meters. Norman hopes this high-tech weapon will be integrated into a fire team or squad “that fires a small bullet at the pressure equivalent to what a tank would fire.”

    “The chamber pressure for the standard assault rifle is around 45 KSI [kilopound per square inch], but we’re looking for between 60 and 80 KSI … the chamber pressure when an M1 Abrams tank fires is on that order,” Norman told Task & Purpose. “We’re looking to reach out around 600 meters and have lethal effects even if the target is protected by body armor.”

    Norman told Task & Purpose that the new lightweight machine gun is in trial tests by the Soldier Lethality Cross-Functional Team at Fort Benning, Georgia. Soldiers are testing the advanced weapon with a 7.62mm XM11158 Advanced Armor Piercing (ADVAP) round. The army is split between the 5.56mm and 7.62mm round but wants to find a happy medium between both.

    “The challenge of the 5.56mm is that it doesn’t have enough mass [to defeat enemy body armor],” Norman said, referring to Chief of Staff Gen. Mark A. Milley’s April 2017 testimony before lawmakers on the Army’s growing ammo problem.

    “But the challenge with 7.62mm ammo is that it has too much mass and not enough propellant. The right solution is somewhere between the two, where you have enough mass to penetrate but you’re still moving fast enough,” he added.

    Task & Purpose says the Army has spent a great deal of time searching for the next generation of assault rifles: 

    But the real heart of the NGSW program is the fire control system, developed independently from the receiver and chamber. While the Army has spent years evaluating off-the-shelf options for soldiers’ next assault rifle — see the Interim Combat Service Rifle program aborted in November due to weight concerns rather than budget jousting — Norman characterized the proprietary fire-control system as a miniaturized version of the systems utilized by ground vehicles and aviation platforms.  

    “We’re exploring several options to ensure that what the gun aims at, it actually hits,” Norman said. “The system will adjust and potentially only fire when the muzzle will line up with its target. It will take into account atmospheric conditions, even automatically center the weapon using an internal system. We’re looking to get these capabilities ready as soon as possible.”

    Task & Purpose further states the hard release of the light machine gun is in 2022: 

    The Army’s hard target of a 2022 fielding may seem ambitious, especially given the maddeningly batshit nature of defense acquisition. But the service isn’t the only one putting the NGSW in the crosshairs: According to Norman, the Corps is also interested in adopting the NGSAR alongside the M27 and M1101 CSASS sniper rifle the Army has eyed in recent years. And with the campaign against ISIS in close-quarters environs like Iraq and Syria winding down, soldiers and infantry Marines could use the range and the punch of the system sooner rather than later.  

    “We’ve got support from Congress and the Secretary of Defense as part of our close combat strategic portfolio review,” Norman told Task & Purpose. “We’re not going to replace all 80,000 SAWs right away — but the intent is to get this AR variant out to infantry squads as soon as possible.”

  • 'Russiagate' Is Revealing Alarming Truths About America's Political-Media Elites

    Authored by Stephen Cohen via The Strategic Culture Foundation,

    Its allegations and practices suggest disdain for American institutions, principles, best interests, and indeed for the American people…

    Stephen F. Cohen, professor emeritus of Russian Studies and Politics at NYU and Princeton, and John Batchelor continue their (usually) weekly discussions of the new US-Russian Cold War. (Previous installments, now in their fourth year, are at TheNation.com.)

    The nearly two-year-long series of allegations and investigations now known as “Russiagate” were instigated by top American political, media, and (probably) intelligence elites (mostly Democratic or pro-Democratic, but not only). What they have wrought suggests profoundly disturbing characteristics of people who play a very large role in governing this country.

    Cohen specifies six such barely concealed truths, which he and Batchelor then discuss.

    1. Russiagate promoters evidently have little regard for the current or future institution of the American presidency.

    At the center of their many allegations is the claim that the current president, Donald Trump, achieved the office in 2016 because of a conspiracy (“collusion”) with the Kremlin; or as a result of some dark secret the Kremlin uses to control him; or due to “Russian interference” in the election; or to all three. Which means, they say outright or imply daily, that he is some kind of Kremlin agent or “puppet” and thus “treasonous.”

    Such allegations are unprecedented in American history. They have already deformed Trump’s presidency, but no consideration is given to how they may affect the institution in the future. Unless actual proof is provided in the specific case of Trump—thus far, there is none—they are likely to leave a stain of suspicion (or similar allegations) on future presidents. If the Kremlin is believed to have made Trump president and corrupted him, even if this is not proven, why not future presidents as well?

    That is, Russiagate zealots seek to delegitimize Trump’s presidency, but risk leaving a long-term cloud over the institution itself. And not only the presidency. They now clamor that the Kremlin is targeting the 2018 congressional elections, thereby projecting the same dark cloud over Congress, as some embittered losers are likely to blame Putin’s Kremlin.

    2. These same Russiagate promoters clearly also have no regard for America’s national security.

    This is revealed in three ways:

    1. By loudly and regularly proclaiming that Russia’s “meddling” in the 2016 US presidential election was “an attack on American democracy” and thus “an act of war,” comparable to Pearl Harbor and 9/11, as recently inventoried by Glenn Greenwald, they are literally practicing the dictionary meaning of “warmongering.” Can this mean anything less than that Washington must respond with “an act of war” against Russia? Tellingly, Russiagaters rarely if ever mention the potentially apocalyptic consequences of war between these two nuclear superpowers.

    2. Still more, by their Russiagate accusations against Trump, whom they characterize as a “mentally unstable president,” they risk prodding or provoking the president to undertake just such a war against Russia in order to demonstrate that he is not the “Kremlin’s puppet.”

    3. Meanwhile, by repeatedly stating they do not trust Trump to negotiate with Russian President Putin, Russiagate zealots severely limit his capacity, possessed by all American presidents since the onset of the atomic age, to resolve potential nuclear crises through diplomatic means rather than by military action, as President John F. Kennedy did in the 1962 Cuban missile crisis. (Imagine, Cohen adds, the outcome had Kennedy been so assailed by the allegations being leveled against Trump today.)

    In short, as Cohen has argued previously, Russiagate and its elite adherents are now the number-one threat to American national security, not Russia itself.

    3. Having found no factual evidence of such a plot, promoters of Russiagate have shifted their focus from the Kremlin’s alleged hacking of e-mails at the Democratic National Committee to Russia’s social-media “attack on our democracy.” In so doing, they reveal something bordering on contempt for American voters, for the American people.

    A foundational principle of theories of democratic representative government is that voters make rational and legitimate decisions. But Russiagate advocates strongly imply—even state outright—that American voters are easily duped by “Russian disinformation,” zombie-like awaiting a signal as how to act and vote. The allegation is reminiscent of, for people old enough to remember, the classic Cold War film “Invasion of the Body Snatchers.” But, Cohen proposes, let the following representatives of America’s elite media speak for themselves:

    According to Washington Post columnist Kathleen Parker, Russia social-media intrusions “manipulated American thought.… The minds of social media users are likely becoming more, not less, malleable.” And this, she goes on, is especially true of “older, nonwhite, less-educated people.” New York Times columnist Charles Blow adds that this was true of “black folks.” Times reporter Scott Shane is entirely straightforward, writing about “Americans duped by the Russian trolls.” And Evan Osnos of The New Yorker spells it out without nuance: “At the heart of the Russian fraud is an essential, embarrassing insight into American life: large numbers of Americans are ill-equipped to assess the credibility of the things they read.”

    Cohen emphasizes (though this is hardly necessary) that these are lead writers for some of America’s most elite publications. He adds, their apparent contempt for “ordinary” Americans is not unlike a centuries-old trait of the Russian intelligentsia, which held the Russian narod(people) in similar contempt, while maintaining that it therefore must lead them, and not always in democratic ways.

    4. Russiagate was initiated by political actors, but the elite establishment media gave it traction, inflated it, and promoted it to what it is today.

    These most “respectable” media include The New York Times, The Washington Post, The New York Review of Books, The New Yorker, and, of course, CNN and MSNBC, among others. These media outlets constantly proclaim themselves to be factual, unbiased, balanced, and thus another essential component of American democracy—a “fourth branch of government.”

    But that has been far from the case in their reporting and commentary on Russiagate. Their combined loathing for Trump and “Putin’s Russia” has produced one of the worst episodes of media malpractice in the history of American journalism. This requires a special detailed study, though no media critics or journalism schools seem interested. But a somewhat close reader of these mainstream newspapers, and television “news” viewer, will note their selective, disproportionate coverage of some stories to the exclusion of others; the prejudicial language and prosecutorial slant often employed; the systematic violation of journalistic due process and presumption of innocence; the equal exclusion of contrary “sources” and “expert” opinions in their pages and on their televised panels; and other disregard for long-established journalistic standards.

    Nor are these elite media outlets above slurring the reputations of people who dissent from their prosecutorial coverage of Russiagate. Very recently, for example, The New York Times traduced a Facebook vice president whose own study suggested that “that swaying the election was *NOT* the main goal” of Russian use of Facebook. Even more revealing, a brand name of the liberal-progressive MSNBC, John Heilemann, suggested on air, referring to Congressman Devin Nunes, “that we actually have a Russian agent running the House Intel Committee on the Republican side.” The Democratic senator being interviewed, Chris Murphy, was less than categorical in brushing aside the “question.”

    And not to be overlooked, these mainstream media have done little if anything to protest the creeping Big Brother censorship programs now being assiduously promoted by government and private institutions in order to ferret out and ban “Russian disinformation,” something of which any American dissenter from the orthodox Russiagate narrative might be “guilty” entirely on his or her own. Indeed, leading media have abetted and legitimized these undemocratic undertakings by citing them as legitimate sources.

    Cohen leaves to others to decide what the Russiagate role of establishment media reveals about the elites who run them.

    5. Briefly regarding the obvious role being played by the Democratic Party, or at least by its leading members, in Russiagate…

    whatever the serious commissions and omissions of the Republican Party may be: In a word, as it looks ahead to congressional elections in 2018, this essential component of the American (perhaps lamentably) two-party democratic system is now less a vehicle of positive domestic and foreign-policy alternatives than a party promoting conspiracy theories, Cold War, and neo-McCarthyism. (According to conversations with a number of local candidates, these electoral approaches are less their initiatives than cues, or directives, coming from high party levels—that is, from the Democratic elite.) And this leaves aside the Russiagate social-media narrative that blames the Kremlin for “divisions” in America that have pitted American citizens, and Democrats and Republicans, against each other for decades, often in “exacerbated” ways, not merely since 2016.

    6. Finally, but no less revealing…

    American elites have long professed to be people of civic courage and honor. But Russiagate has produced very few “profiles in courage” – people who use their privileged positions of political or media influence to protest the abuses itemized above.

    Hence another revelation, if it is really that: America’s elites are composed overwhelmingly not of “rugged individualists” but of conformists – whether that is due to ambition, fear, or ignorance hardly matters.

  • China Prepares For New Cold War With Massive Military Buildup

    As we have been documenting for quite some time, China has been not-so-quietly transforming itself into a serious threat to the West – beefing up its military to contend with the Washington’s air, sea, space and cyber weapons capabilities, while scrapping constitutional term limits for President Xi Jinping. 

    Since 2000, China has built more submarines, destroyers, frigates and corvettes than Japan, South Korea and India combined. To put this further into perspective, the total tonnage of new warships and auxiliaries launched by China in the last four years alone is significantly greater than the total tonnage of the French navy. –IISS

    Analysts on both sides of the Pacific believe Xi’s aggressive military buildup and power grab have put Beijing on a direct course for conflict with Washington – with the heavy U.S. presence in the region setting the stage for a new Cold War.

    “In the Asia-Pacific, the dominant role of the United States in a political and military sense will have to be readjusted,” said Cui Liru, former president of the China Institutes of Contemporary International Relations, a think tank under the Ministry of State Security that often reflects official thinking. “It doesn’t mean U.S. interests must be sacrificed. But if the U.S. insists on a dominant role forever, that’s a problem.” Cui added that it was “not normal for China to be under U.S. dominance forever. You can’t justify dominance forever.” 

    “China’s military objective is to break through the first chain of islands,” said Mr. Cui, referring to the waters beyond Japan and Taiwan where the Chinese military wants to establish a presence. –NYT

    China’s navy is also deploying further from home, including Europe, while their base in the Eastern African country of Djibouti will enable more naval deployments. In terms of military computing technology, China has also set out on an ambitious course, as vast resources have been sunk into “extremely high-performance computing and quantum communications,” which, along with their weapons advancements and overall defense capabilities mean the country is no longer merely “catching up” with Western progress. 

    Meanwhile, Xi and other Chinese officials are of the firm belief that the United States is a superpower in decline – which will require China to step into the vacuum left behind. 

    “It is now clear Xi’s agenda to rebuild an Asian order with China at its center is here to stay,” said Hugh White, a scholar and former defense official in Australia who has argued that the United States must be prepared to share power with China in the Asia-Pacific region.

    “I think Xi is impatient,” Mr. White added. “He wants China to be the predominant power in the Western Pacific. He wants to do it himself and for it to go down in history as his achievement. That makes him formidable.” –NYT

    In a keynote speech to China’s Communist Party Congress last October, Xi promised to make China’s armed forces world-class by the middle of the century. In a January speech, Xi told thousands of Chinese soldiers to “neither fear hardship nor death,” during an inspection visit Wednesday to the People’s Liberation Army’s (PLA) Central Theater Command in northern Hebei province, according to the official Xinhua news agency.

    Xi advised the military to continue improving upon its equipment, tactics, technology, and combat readiness by engaging in “real combat training.” The Chinese president – for life, spoke of the need to “create an elite and powerful force that is always ready for the fight, capable of combat and sure to win in order to fulfill the tasks bestowed by the Party and the people in the new era.”

    He [Xi] has accelerated the military’s plans to build a blue-water navy, increased spending on weaponry in outer space, and established China’s first military bases abroad. He has promoted a global infrastructure program to extend Beijing’s influence and ignored Western concerns about human rights, which have diminished under the Trump administration. –NYT

    Indeed, with the rollout of stealth jets, new high-tech naval artillery such as a “secret railgun,” and Chinese media reports bragging about aggressive maneuvers that “dare to shine the sword,” our trading partner to the West has made it perfectly clear that they intend on being a dominant global force, both economically and militarily.

    (not so) secret railgun

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

    Last November, we reported on a secretive hypersonic weapons program, which if successful would be able to hit the United States in under 14 minutes. 

    “China and the US have started a hypersonic race,” said Wu Dafang, professor at the school of aeronautic science and engineering at Beihang University in Beijing who received a national technology award for the invention of a new heat shield used on hypersonic vehicles in 2013.

    And just two weeks ago the International Institute for Strategic Studies reported that China’s rapid military modernization is “remarkable,” and is set to challenge the West on several fronts.

    “China’s emerging weapons developments and broader defence-technological progress mean that it has become a global defence innovator” says Dr. John Chipman, Director-General and Chief Executive of the London-based think tank. Of note, Chipman points out that China’s Chengdu J-20 low-observable combat aircraft is set to challenge America’s “monopoly on operational stealthy combat aircraft.”

    The IISS report also notes that China’s expanding array of advanced guided-weapons projects, such as the PL-15 extended range air-to-air missile which could enter service this year. “This weapon appears to be equipped with an active electronically scanned array radar, indicating that China has joined the few nations able to integrate this capability on an air-to-air missile,” reports Chipman.

    Trump and China

    Trump has clearly changed his tune Chinese trade – declining to label them a currency manipulator last year because the “timing was bad,” and refusing to impose sanctions – however the U.S. President has committed to beefing up defenses with a new nuclear policy calling for the revitalization of the nation’s nuclear arsenal, while also reaching out to forge a stronger “Indo-Pacific” coalition with Australia, India and Japan in order to counter China’s rapid rise. 

    “Trump is obsessed with strategic forces,” said Shi Yinhong, a professor of international relations at Renmin University. “He is determined to maintain American military predominance in face of China’s strategic buildup. That will make the relationship more profoundly confrontational.”

    Chinese analysts downplayed Trump’s efforts, however, noting that the United States has been unwilling to fund the projects. “In the short term,” said Shi, “China does not care about it because the ability to form a real coalition is limited.”

    Meanwhile, many feel that President Trump will be pressured into taking a harder line with China going into the midterm elections – as Democrats have signaled that they will compare his campaign promises with his softline approach to a country he spent much of the 2016 election railing against. 

    “Now that it’s clear that President Xi isn’t going anywhere, getting tough on China is even more of an imperative,” said Senator Chuck Schumer (D-NY). “If President Trump and Congress don’t crack down on their rapacious trade practices,” he added, “China will continue eating our lunch for years to come.”

    And while Wall Street continues to broker lucrative investment-banking deals with the Chinese government, US manufacturers are growing increasingly frustrated at the prospect of competing with Chinese businesses who steal corporate secrets and regularly undercut their competition. 

    Manufacturers tend to be more fed up than Wall Street, which continues to do lucrative investment-banking business with the Chinese government. Technology companies have soured on China, though the market is so vast that they are still willing to consider concessions they would make nowhere else in the world.

    The Trump administration reflects those fissures. Advisers like Gary D. Cohn, director of the National Economic Council, and Treasury Secretary Steven Mnuchin, who both worked at Goldman Sachs, have persuaded Mr. Trump to hold off on tough trade measures against China in the past. –WSJ

    Infiltrating Universities

    On the national security front, the Trump administration has been using “Cold War-like terms,” referring to China as a revisionist power that will try “to erode American security and prosperity.” 

    This extends to U.S. colleges, which according to FBI Director Christopher Wray, are underestimating the ability for Chinese students to gather sensitive national security intelligence. Public universities have long been instrumental in the development of both offensive and defensive capabilities for a multitude of US agencies such as the Department of Defense and DARPA.

    “The reality is that the Chinese have turned more and more to more creative avenues using non-traditional collectors (of information),” Wray said during the Senate Intelligence Committee’s annual open hearings on the greatest threats to the country. 

    “The use of non-traditional collectors, especially in the academic setting—whether it’s professors, scientists, students—we see in almost every field office that the FBI has around the country, Wray said, adding “They’re exploiting the very open research-and-development environment that we have, which we all revere, but they’re taking advantage of it.’

    Specifically, the FBI is “watching” programs at dozens of Confucius Institutes, funded by China’s Ministry of Education that are widely embedded within American universities and public schools to teach the Mandarin language.

    The Confucius Institute program, which started operations in 2004, has been the subject of vast criticisms, concerns, and controversies during its international expansion. Many such concerns stem from the program’s close relationship to the Communist Party of China.

    According to the South China Morning Post, some 350,000 Chinese students are actively enrolled at American universities, which is about thirty-five percent of the one million foreigners, said the Institute of International Education.

    Bottom line: China’s rapid military buildup and commitment to becoming a dominant global force will require that the United States either cede power in Asia, or face another Cold War of steadily increasing temperatures. Keep in mind – times are good. The next recession, whenever that might occur, will most certainly push already-strained economic and military relations between the Washington and Beijing into uncharted territory.

  • There Are Fewer School Shootings Now Than During The 1990s

    Authored by Ryan McMaken via The Mises Institute,

    Now that I have several children, I’m often in the company of other parents who talk about the way things “used to be.” When the issue of child safety comes up, I hear parents sadly shake their heads and say things like “it’s not like it was when we were kids…the world is so much more dangerous now.” 

    Usually, the sentiment behind this idea is that there are more murders now than there used to be. 

    Now, I’m not exactly known for being a Pollyanna, but I am willing to admit when things are not, in fact, getting worse. 

    And when it comes to things like homicides, there is no evidence that things are getting worse. It is indeed true that things aren’t like they were “when we were kids,” but that’s a good thing. There were far more homicides in the United States during the 1980s and 1990s than there are today. Things were even worse than that during the 1970s. In fact, the homicide rate in the US was cut in half between 1991 and 2014. And while the homicide rate has inched up over the past two years, it is nowhere near where it was “when we were kids.” 

    homicide1 (1).png

     

    For anyone familiar with these trends, it should not be shock to hear that a subset of those homicides — school shootings — have decreased over that period as well. 

    In response to the latest shooting in Florida, Northeastern University released a preview of new research by James Alan Fox slated for publication this fall which shows, quite clearly, that there is no growing trend in school shootings. The university notes: 

    Mass school shootings are incredibly rare events. In research publishing later this year, Fox and doctoral student Emma Fridel found that on average, mass murders occur between 20 and 30 times per year, and about one of those incidents on average takes place at a school.

    Fridel and Fox used data collected by USA Today, the FBI’s Supplementary Homicide Report, Congressional Research Service, Gun Violence Archive, Stanford Geospatial Center and Stanford Libraries, Mother Jones, Everytown for Gun Safety, and a NYPD report on active shooters.

    Their research also finds that shooting incidents involving students have been declining since the 1990s.

    Four times the number of children were killed in schools in the early 1990s than today, Fox said.

    “There is not an epidemic of school shootings,” he said, adding that more kids are killed each year from pool drownings or bicycle accidents. There are around 55 million school children in the United States, and on average over the past 25 years, about 10 students per year were killed by gunfire at school, according to Fox and Fridel’s research.

    In a February 22 article, New York Magazine came to a similar conclusion, noting: 

    Schools in the United States are safer today than at any time in recent memory. Criminal victimization in America’s education facilities has declined in tandem with the nation’s collapsing crime rate. Meanwhile, as of 2013, the year after the Newtown massacre, mass shootings accounted for only 1.5 percent of all gun deaths in the United States, or 502 total fatalities. 

    New York was drawing on research from the US Justice Department showing that “school victimization” rates have plummeted since 1992, as a graph provided by the Justice Department shows: 

    victimization.PNG

     

    Fox, the author of the Northeastern University research, does not oppose policy changes like increasing the age for purchasing guns. But he notes it’s unlikely to impact the numbers very much: 

    The thing to remember is that these are extremely rare events, and no matter what you can come up with to prevent it, the shooter will have a workaround,” Fox said, adding that over the past 35 years, there have been only five cases in which someone ages 18 to 20 used an assault rifle in a mass shooting.

    Ironically, those most familiar with the data on shootings are often less likely to assume that gun control measures are are an easy solution to the problem of homicide. 

    For example, last year, Leah Libresco at the Washington Post — hardly an organ of the NRA — concluded that gun control measures are of extremely limited value:

    …my colleagues and I at FiveThirtyEight spent three months analyzing all 33,000 lives ended by guns each year in the United States, and I wound up frustrated in a whole new way. We looked at what interventions might have saved those people, and the case for the policies I’d lobbied for crumbled when I examined the evidence…

    I researched the strictly tightened gun laws in Britain and Australia and concluded that they didn’t prove much about what America’s policy should be. Neither nation experienced drops in mass shootings or other gun related-crime that could be attributed to their buybacks and bans. Mass shootings were too rare in Australia for their absence after the buyback program to be clear evidence of progress. And in both Australia and Britain, the gun restrictions had an ambiguous effect on other gun-related crimes or deaths…

    By the time we published our project, I didn’t believe in many of the interventions I’d heard politicians tout. I was still anti-gun, at least from the point of view of most gun owners, and I don’t want a gun in my home, as I think the risk outweighs the benefits. But I can’t endorse policies whose only selling point is that gun owners hate them.

    What Libresco did conclude, was that a host of societal issues are driving much of what we hear about in terms of so-called gun violence. Mental illness, suicide, gang violence, and domestic violence are all important factors that drive gun violence. The problem, Libresco admits, is that simply prohibiting certain types of guns doesn’t really address these issues.

    Accepting the “Crisis” Narrative

    In the wake of last month’s Florida shooting, many opponents of gun control made the mistake of simply accepting the claim that school shootings are getting worse, and are more deadly overall. 

    According to Fox’s research, though, this is simply not the case. And we also certainly know that homicides overall are way down from where they were in the good ol’ days of my youth. 

    These apparent facts, of course, don’t stop even rightwing professional Cassandras like Rod Dreher from authoring articles like this one called “Underestimating American Collapse” which uses school shootings as evidence that American civilization is basically on the brink of collapse:

    Why are American kids killing each other? Why doesn’t their society care enough to intervene? Well, probably because those kids have given up on life — and their elders have given up on them. Or maybe you’re right — and it’s not that simple. Still, what do the kids who aren’t killing each other do? Well, a lot of them are busy killing themselves.

    Maybe American society is in a more perilous position that in the 1980s. But if we’re looking for evidence of that, the homicide data won’t help the argument. Dreher is right to question why American kids are killing each other. But an equally relevant question might also be “why are fewer American kids killing each other now than 25 years ago?”

    School Shootings and Opportunity Cost

    Part of the problem with accepting the crisis narrative is that it ignores other priorities and other problems that may deserve our attention elsewhere. 

    After all, resources for schools — or anything else — are not unlimited, and it is unclear that extremely rare events like school shootings can be put forward as a priority. 

    This problem of priorities can be seen in the fact that cities where snow falls irregularly do not maintain a huge fleet of snowplows. In Naples, Italy last week, for example, the city experienced the largest snowfall it’s seen in 50 years. According to the Daily Mail, the snowfall were seen as a citywide emergency and “[r]esidents have been told not to leave their homes unless it is ‘strictly necessary.'” One man was said to have even frozen to death in the unexpectedly frigid temperatures. 

    Now, if even a few inches of snow can bring the city to a standstill and endanger the lives of residents, why does the city not have far more snow plows than it does? Why is there not a network of emergency workers to ensure that residents are not caught in the cold where they can be injured or even killed by cold temperatures? 

    The answer, of course, is that the opportunity cost of such measures would be extremely high. By maintaining personnel and equipment designed to address a rare snowfall, the city would be foregoing the opportunity to train people or purchase equipment for a wide variety of other activities that are no doubt also deemed essential. 

    While school shootings no doubt have a greater psychological impact than frigid temperatures, it is no less true that spending large amounts of resources on anti-shooting measures carry with them their own costs. 

    Now, in the US, many organizations, both public and private have elected to devote sizable amounts of resources to security. But none of them deny that there is an opportunity cost to doing so. 

    Indeed, opponents of added security in schools have been quick to point out the costs of more security measures. 

    And yet, proponents of more gun control act as if there are no opportunity costs to these measures. In reality, of course, the costs of enforcing government prohibitions can be very high, both in terms of tax dollars and costs imposed upon otherwise law abiding citizens. The drug war has made this quite clear. In the absence of individual gun ownership, professional security will become more necessary, and in many cases more costly. This imposes a real cost on citizens, especially on those who cannot afford professional security. Relying on the police for protection, of course, has been shown to be unwise at best.

    What Are We Doing Right?

    Many observers will still point out that even a small number of school shootings is too many. That’s true enough, but when the multi-decade trend is downward, it would hardly be honest to attempt to frame the current situation as a “crisis.” Indeed the challenge should be to discover what factors have led to the decline in violence, and act accordingly.

    Given that gun ownership has greatly increased in recent decades, it may be that the answer lies somewhere beyond a simply government prohibition on guns.

  • US Sells 210 Javelin Anti-Tank Missiles And Launchers To Ukraine

    Well, it’s finally official – after years of preparation by the Obama administration to provide lethal offensive weapons to Ukraine over the vocal objections of the Kremlin, today the Trump administration announced it would sell Ukraine 210 Javelin anti-aircraft missiles and 37 launchers for $47 million. The sale, which was first reported last December, marks a significant increase in U.S. military support for Ukraine and another major deterioration US-Russian relations, and is the first lethal weapons sale of its kind since the breakout of a Russian-backed proxy civil war against the central government in Ukraine’s eastern provinces.

    As discussed previously, President Trump approved the plan in the days just before Christmas 2017, and began informal notifications with Congress about it. With Thursday’s formal notification, Congress now has 30 days to sink the deal or it will go through, which is expected.


    The FGM-148 Javelin Portable Anti-Tank Missile. Image source: US Army. 

    Trump has said the sale represents evidence of his “tougher” stance on Russia than President Barack Obama’s, although according to ABC, the Special Representative for Ukraine Negotiations sought to downplay the significance on Monday.

    “There is what I view as an artificial distinction between lethal and non-lethal military equipment,” Ambassador Kurt Volker said in Washington on Monday, comparing anti-tank missiles to a counter-battery radar that improves targeting to attack and kill an enemy firing mortars. “That’s non-lethal and an anti-tank missile, which sits in a box and doesn’t get used unless you have a tank coming at you, is lethal. Both are clearly defensive weapons.”

    Moscow may disagree, especially since sale is intended to boost Ukrainian military forces as they continue to fight Russian-backed separatists, while U.S. officials argue the U.S. is only supporting Ukraine’s right to self-defense.

    “The Javelin system will help Ukraine build its long-term defense capacity to defend its sovereignty and territorial integrity in order to meet its national defense requirements,” the Pentagon’s Defense Security Cooperation Agency said in a statement Thursday. U.S. personnel will travel to Ukraine to train their military on its use, the agency added.

    * * *

    While Russia has not yet commented on the official notification, Russia’s deputy foreign minister, Sergei Ryabkov,  responded harshly in December when news of the sale first broke.

    “The United States in a certain sense crossed the line, announcing the intention to transfer weapons of direct damaging action to Ukraine,” the statement said, translated from Russian. “American weapons can lead to new victims in our neighboring country, to which we cannot remain indifferent.”

    Kremlin spokesperson Dmitry Peskov said then that the sale “will once again motivate the hotheads” in the Ukrainian government and “unleash bloodshed again.”

    Trump’s approval of the arms deal was a major shift from the Republican party platform, which was amended when Trump was the party’s nominee for president, from supporting “lethal defensive arms” to Ukraine to the more vague “appropriate assistance” — language that ran counter to traditional Republican foreign policy.

    Needless to say, Trump himself promised a reset with Russia, but since taking office, relations with Moscow have not improved.

    * * *

    So is this a deep state victory? The Washington Post previously described that “the decision over whether to allow lethal arms sales to Ukraine had been sitting on Trump’s desk for months” even after The National Security Council presented the president with various options for moving forward “months ago”. But concerning the impetus behind internal White House deliberations to move on the issue, the Washington Post reported:

    Another senior Trump administration official said that Trump personally approved the decision to allow the issuing of the license after being presented a decision memo by Defense Secretary Jim Mattis and Secretary of State Rex Tillerson. While there was never a formal ban on such weapons transfers, the decision was discussed internally as a lifting of the de facto Obama administration restrictions, the official said.

    Congressional anti-Russia hawks have long sought greater long-term military engagement along Russia’s European border, especially after the May 2014 referendum which saw the pro-Russian Ukrainian regions of Donetsk and Luhansk declare independence from Kiev. And though Congress originally authorized weapons sales via the Ukraine Freedom Support Act signed into law in December 2014, the Obama administration never made the decision to actually follow through on the legislation.

    Almost as if Obama “had more flexibility” with Putin than even Trump, who allegedly is only president thanks to Russia…

    But after years of covert American involvement in the Ukrainian proxy and civil war which has raged since 2014 – and which a leaked recording confirmed was precipitated by the US State Department – it appears that neocon hawks like McCain, Cotton, and Corker are finally getting their way. 

    Perhaps more scary in terms of escalating an unnecessary war which has already taken more than 10,000 lives since 2014, the Kiev government and some in Washington are already pushing for putting anti-aircraft weapons in the hands of Ukrainian forces.

    “What we are awaiting and have called for is the provision of lethal defense weapons that are more advanced – a larger package that is under consideration right now, including anti-tank and anti-aircraft missiles,” a Ukrainian official told ABC News. “We are expecting this decision and would welcome it.”

    And as multiple reports have noted in recent weeks, fighting in eastern Ukraine is heating up after a period of relative stalemate and calm, and after general Western media silence on the war. Likely with the announcement of US supplied anti-tank missiles and the additional possibility of US anti-aircraft weapons being openly shipped into the conflict, it will most certainly return to the international and media spotlight.

  • What's Going Down In China Is Very Dangerous – Part 2

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    One of the more concerning ramifications of China’s recent turn toward a more totalitarian stance at home is what it means for the geopolitical environment in the years ahead. Several people asked in the comment section of Part 1 why I care about what’s going on in China when we have so many serious problems in the U.S.

    The reason is because a major shift in the polices of the second largest economy in the world, populated with over a billion people and run by leadership intent on establishing a far more dominant position on the world scale militarily and politically, will affect everyone.

    Government propaganda is one of the most insidious and dangerous things that regularly occurs within human society, and it’s been pervasive in essentially all civilizations to-date. The media’s always a key ally in the dissemination of propaganda, something much of the American public has finally come to understand. The election of Donald Trump despite the U.S media’s unanimous support of Hillary Clinton was the real wakeup call, and has led to incessant calls for platform monopolies like Google and Facebook to censor speech that questions the dominant intelligence agency narratives. There’s nothing more terrifying to an entrenched power structure than a loss of the narrative, and the election of Trump proved to them that they lost it. The American establishment isn’t really afraid of Trump, it’s far more concerned that his election signified a loss of narrative control.

    Narrative is particularly important to lunatics who run a global empire, and the U.S. media’s almost always happy to oblige. For example, the media’s enthusiasm to swallow government propaganda is what led to the Iraq war disaster, in addition to so many other societal tragedies I write about here on a daily basis. While the marriage between U.S. government propaganda and a complicit corporate media has been a demonstrable danger to the world, we shouldn’t for a moment think American propaganda is the only threat. Other powerful governments use it as well, and China is no exception.

    With Russia obsession dominating almost every domestic media headline these days, Americans are woefully ignorant regarding the explicit intentions the Chinese government has for the world. Fortunately, you can get into the mindset of China’s leadership via their state-sponsored media channels. Global Times is one example, and I want to call attention to two recent opinion pieces published there.

    First, from the piece: Constitutional Amendment Responds to New Era:

    It can be argued that the current ruling team of China is progressive and ambitious with clear goals and willingness to take on responsibilities. They want to make contributions to this nation which can stand the test of time.

    Interestingly, in the era of globalization and the internet, although China has stunning economic might, it has not yet become a leading power in terms of ideology and information.

    The most influential value system in the world now is the Western value system established by the US and Europe. It has shaped and affected quite a few Chinese people’s mind-sets. But some key parts of the Western value system are collapsing. Democracy, which has been explored and practiced by Western societies for hundreds of years, is ulcerating.

    As is clear, Chinese officialdom see their anti-democratic, one-party, command and control paradigm with no political freedom as a rival model for the world to accept. They believe the vacuum that will be left by a decadent and declining U.S. empire will provide a perfect opportunity to promote this vision globally. Ignore this all you want, but it’s explicit.

    As interesting as that is, the extremely defensive and insecure way in which the paper subsequently lashed out at Western criticism over its decision to scrap presidential term limits is equally illuminating.

    A perfect example can be seen in the excerpts from the following piece Global Times piece, Solidarity Cornerstone of China in New Era:

    No sooner had the Communist Party of China (CPC) Central Committee made public its proposal to amend the country’s Constitution than the Western media began bad-mouthing China in their usual and various ways. It is worth noting that for some time the Western media have been growing strident in their abuse of Beijing, almost using curse words.

    The biggest reason for all this is that the rise of China has reached a critical point where some Westerners cannot psychologically bear it any longer. They wish to see misfortune befall the country. Even if it might hurt their own interests, they are willing to see China crumble first.

    Such hysteria by some people in the West will subtly influence the way their countries interact with China. It will increase the risks Beijing faces while emerging, and complicate communication between Chinese society and the outside world.

    The author talks about hysteria, but where do you see hysteria? From Westerners criticizing this creepy move toward forever rule, or in the above three paragraphs?

    Here’s some more.

    It is believed that cooperation between China and the West will continue. The normal pattern of Sino-US and Sino-European relations will remain fundamentally unchanged.

    But in the days to come, tough stances against China will find more support in Western nations. Friction between China and the West will become more likely.

    The solidarity of Chinese society will face tests. Pressure from the outside world may activate negative factors at home, which in turn, increase the costs of China maintaining stability.

    Facing external impacts and hostility, the Chinese nation is a community of common destiny. All Chinese people, whether they work for State-owned institutions or not, whether they support the nation’s path or not, even dissidents, are enjoying development opportunities as well as the might of China, which did not come easily. If China collapses the way the outside world wishes, all Chinese people will lose.

    Solidarity is a necessary precondition for China to successfully complete the second half of its modernization. It is the cornerstone of China in the new era. The CPC has made us Chinese all closely connected to each other. Over the years, the authority of the CPC Central Committee and the prosperity of our Chinese society have both risen. The authority of the Central Committee is the most outstanding part of China’s competitiveness. It is the source of the country’s efficiency and ability to mobilize people and make adjustments. It is the thing the outside world most envies about China and the target of Western anti-China rhetoric.

    Chinese society must strengthen its resolve. We must be aware that the world is full of competition. Solidarity is for Chinese the nation’s most crucial political resource and firm support for the CPC Central Committee is the lifeline of China’s long-term unity.

    This is some serious propaganda, with two principle objectives. First, there’s this notion (stated as fact) that the Chinese people would be incapable of progress without the authority of the “outstanding” Communist Party leadership. Second, the author prepares readers for tough times ahead, while also offering assurances that any problems faced within Chinese society are the fault of foreigners, especially Westerners, who apparently want China to collapse. It’s fostering increased nationalism ahead of difficult times, and then lays out who the Chinese should blame. This is very dangerous.

    I know how dangerous this is precisely because I’ve seen my own country’s intelligence agencies and oligarchs do it time and time again. I saw them do it in the run up to the Iraq war, and I see them doing it right now with Russia; blaming Putin for every inconvenient political movement that threatens the neocon/neoliberal establishment.

    Here’s where it gets scary. The press in the U.S. was able to sell the Iraq war despite a relatively robust first amendment and in the face of massive street protests. The war hawk propagandists still got the war they wanted, so what do you think the Chinese government might be able to get away with in a society where zero real dissent is allowed?

    Let me cut to the chase. I expect the global economy to crater once again within the next 12-24 months, and that means everyone. China’s economy is as much a debt fueled house of cards as the U.S., and money printing/bailouts won’t save either of them this time around. As such, I suspect “leaders” around the world, including in both the U.S. and China, will shift blame for internal problems to enemies abroad despite the fact that domestic sociopaths and oligarchs are the true culprits.

    The incentive to shift blame to external forces will be too powerful for politicians to resist, and the press in these respective countries will likely fan such flames (to avoid their own blame and protect their owners). This will vastly increase the odds of unnecessary and dangerous global conflicts. As always, the masses will lose while the elites sit on top deflecting blame to anyone and everyone but them. I really hope we can avoid this situation, but I also can’t ignore the writing on the wall.

    The problem of crooked leadership destroying countries and then starting wars to blame outsiders is as old as human civilization itself. We’ll never escape this trap until we grow up, face reality and refuse to be manipulated into murdering other humans across the world for no good reason.

    As I tweeted earlier today:

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

    Can humanity rise up and break the vicious cycle? We’ll know soon enough.

    *  *  *

    If you liked this article and enjoy my work, consider becoming a monthly Patron, or visit our Support Page to show your appreciation for independent content creators.

  • An Apocalyptic Paul Tudor Jones Warns The Fed Is About To Lose Control

    In a striking interview with Goldman’s Allison Nathan, legendary trader Paul Tudor Jones argues that US inflation is set to accelerate sharply, making bonds a very poor investment, and that the Fed must act swiftly to tackle financial bubbles created by prolonged monetary easing.

    Joining such luminaries as Bill Gross and Ray Dalio, who have both claimed the bull market in bonds is over, PTJ joins the choir and warns that “markets disciplined Greece for its budget transgressions; it’s just a matter of time before they discipline us” and as a result he sees the 10-year yields rising to 3.75 percent by year-end as a “conservative” target amid the now traditional and widely discussed bogeymen: supply outweighing demand, economic momentum outpacing the monetary policy response, and “glaring” bond valuations. Oh, and central banks ending the party, of course:

    Beginning next September, when the ECB concludes its asset purchases, the aggregate balance sheet of the main central banks will start contracting after nearly a decade of expansion. That will be a major data break, making it a horrible time to own bonds.

    PTJ also pours cold water on the repeated suggestion that higher yields will lead to more buying from pension funds: “Bond pension buying, for example, is very pro-cyclical. When stock prices rise, pensions reallocate their capital gains from stocks into bonds. As we’ve seen, this depresses the term premium and fuels more gains in the stock market. If and when the Fed raises rates enough to stop and reverse the stock market rise, that virtuous circle predicated on increasing capital gains will reverse, and bonds and stocks will decline together like they did in the 1970s.“

    The biggest factor, however, which is preventing PTJ from owning any risk assets is today’s unnaturally low rates: “with rates so low, you can’t trust asset prices today. And if you can’t tell by now, I would steer very clear of bonds.”

    There is another reason PTJ is not deploying capital: last month’s vol shock was just the beginning:

    In my view, higher volatility is inevitable. Volatility collapsed after the crisis because of central bank manipulation. That game’s over. With inflation pressures now building, we will look back on this low-volatility period as a five standard- deviation event that won’t be repeated.

    When would Tudor buy stocks? “When would I want to buy stocks? When the deficit is 2%, not 5%, and when real short-term rates are 100bp, not negative“… in other words not for a while.

    So what is he buying: “I want to own commodities, hard assets, and cash… The S&P GSCI index is up more than 65% from its trough two years ago. In fact, relative to financial assets, the GSCI is at one of its lowest points in history. That has historically been resolved by commodities putting on a stunner of a show, stoking inflation. I wouldn’t be surprised if that happened again.“

    In other words, PTJ and Gundlach agree on two things: stay away from bonds, and buy commodities.

    But the most notable part of the interview, and where PTJ’s most apocalyptic sentiment shines through, is his description of where he sees Fed Chair Powell right now: as General Custer before the Battle of Little Big Horn, a battle which – at least in the history books – was lost.

    Let me describe to you where I think Jerome Powell is right now as he takes the reins at the Fed. I would liken Powell to General George Custer before the Battle of the Little Bighorn, looking down at an array of menacing warriors. On the left side of the battlefield are the Stocks—the S&P 500s, the Russells, and the NASDAQs—which have grown, relative to the economy, to their largest point not just in US history, but in world history. They have generally been held at bay and well-behaved, but they are just spoiling to show their true color: two-way volatility. They gave you a taste of that in early February. Look to the middle and there waits the army of Corporate Credit, which is also larger than ever relative to the economy, as ultra-low rates have encouraged it to gain in size, stature, and strength. This army is a little more docile right now, but we know its history, and it can be deadly when stressed. And then on the right are the Foreign Currency Fighters, along with the Crypto Tribe, an alternative store of value that only exists because of the games central banks are playing; the opportunity cost of Crypto is so low, why not own some? The Foreign Currency Fighters have strengthened by 10% over the past year. Compounding the problem, they have a powerful, ascending leader, the renminbi, to challenge the US dollar’s hegemony as the reserve currency. All of these forces have been drawn to the battlefield because of our policy experiment with sustained negative real rates.

    So Powell looks behind him to retreat. But standing there is none other than Inflation Nation, led by the fiercest warmongers of them all: the Commodities. He might take comfort that he is not alone on the battlefield. But then he looks over at the Washington, DC, fiscal battalion and realizes they are drunk on 5% deficit beer. That’s what Powell is facing, whether he recognizes it or not. And how he navigates this is going to be fascinating to watch.

    * * *

    His full must read interview is below:

    Interview with Paul Tudor Jones

    Allison Nathan: You’ve said that you would rather hold a burning coal than a 10-year Treasury. Why?

    Paul Tudor Jones: The bear market in bonds is the natural upshot of the bull market in monetary and fiscal laxity. My view on bonds is based on three major factors. First, there is a huge flow of funds imbalance with supply overwhelming demand. We are in a unique historical situation with the Fed stepping away from the market while the  US government is significantly increasing its auction sizes. I assume bonds will fall until the peak in full Treasury  auction sizes, which I don’t think will be before 2Q2019. At the current pace, next February we might have a quarterly auction of $20bn 30-years vs. $15bn recently. That is so big it will only clear at substantially lower prices.

    Second, economic momentum is now overwhelming the pace of the monetary policy response. We’re in the third-longest economic expansion in history. Yet we’ve somehow managed to pass a tax cut and a spending bill, which together will give us a budget deficit of 5% of GDP—unprecedented in peacetime outside of recessions. This reminds me of the late 1960s when we experimented with low rates and fiscal stimulus to keep the economy at full employment and fund the Vietnam War. Today we don’t have a recession, let alone a war. We are setting the stage for accelerating inflation, just as we did in the late ‘60s.

    Finally, and most importantly, adverse valuations are becoming more glaring. Bonds are the most expensive they’ve ever been by virtually any metric. They’re overvalued and over-owned. Valuations haven’t been that relevant in recent years because of central bank manipulation outside of the US, but with the Fed in motion and the US economy in fifth gear, they start to matter a lot. I believe we’re at that critical threshold right now.

    Allison Nathan: Inflation expectations have been very well-anchored; does that make history a less useful guide?

    Paul Tudor Jones: No. I think we’re experiencing a hysteresis effect in global groupthink, led by the Fed, believing that we can depress term and risk premia without consequences for inflation or financial stability. That may have been the case for the past six to seven years. When it comes to inflation, you need to be careful what you wish for. At the end of other big asset price booms—Japan in 1989 or the US in 1999—inflation did not increase in a measured way. Rather, it accelerated in a non-linear fashion until the central bank had to come in and stop it with substantially higher real rates than we have today.

    Allison Nathan: Is the market underestimating commodity-related inflation today? 

    Paul Tudor Jones: Absolutely. The S&P GSCI index is up more than 65% from its trough two years ago. In fact, relative to financial assets, the GSCI is at one of its lowest points in history. That has historically been resolved by commodities putting on a stunner of a show, stoking inflation. I wouldn’t be surprised if that happened again.

    Allison Nathan: Some argue that it will be difficult to overcome structural deflationary forces, like technological progress or demographic change. You don’t agree?

    Paul Tudor Jones: On technology, what I’ve seen during this disinflationary period is the concentration of economic power into a few corporate hands. Once they have cleared the playing field of their competitors, they could ratchet up prices to decompress margins. So I am not sure these technological disruptions will continue to bring disinflation. In terms of demographics, economists at the Bank for International Settlements (BIS) have shown that it is the relative size of the working-age population that influences long-term trends in inflation. Unlike the prior decade, the share of the working-age population globally is beginning to shrink, and that would argue for inflation trending up.

    Allison Nathan: Does all of this just boil down to the Fed being behind the curve?

    Paul Tudor Jones: Central banks love to look in the rearview mirror. They typically operate by waiting for the most obvious moment they can to make a decision to fight yesterday’s battles. Heck, the ECB hiked rates in July 2008! It is why price targeting is such a bad idea in rate decisions, as is its first cousin, gradualism. There is little in human nature that is linear, so why should rate policy be that way?

    But the elephant in the room—the most important point that doesn’t get discussed enough—is the level of real interest rates. The peacetime 10-year real interest rate that has determined the efficient allocation of capital averaged 3½% since 1790 and 2½% in modern times. Yet in 2018, with the economy operating at full employment, our real 10-year rate is 0.64%, well below historical averages. Why? It seems the reason is the Fed is trying to bring core inflation from a smidge below 2% to a smidge above it. But since 1790, US inflation has averaged 1.3% in peacetime. And yet somehow we have this magical 2% inflation target. It’s a unicorn we keep chasing at the expense of everything else.

    Sitting where we are today, this grand experiment with negative real rates might seem successful: We have the strongest economy in 40 years, at full employment. The mood is euphoric. But it is unsustainable and comes with costs such as bubbles in stocks and credit. Navigating these bubbles will be one of the most difficult jobs any Fed chair has ever faced.

    Allison Nathan: Is the Fed up to the task?

    Paul Tudor Jones: Let me describe to you where I think Jerome Powell is right now as he takes the reins at the Fed. I would liken Powell to General George Custer before the Battle of the Little Bighorn, looking down at an array of  menacing warriors. On the left side of the battlefield are the Stocks—the S&P 500s, the Russells, and the NASDAQs—which have grown, relative to the economy, to their largest point not just in US history, but in world history. They have generally been held at bay and well-behaved, but they are just spoiling to show their true color: two-way volatility. They gave you a taste of that in early February. Look to the middle and there waits the army of Corporate Credit, which is also larger than ever relative to the economy, as ultra-low rates have encouraged it to gain in size, stature, and strength. This army is a little more docile right now, but we know its history, and it can be deadly when stressed. And then on the right are the Foreign Currency Fighters, along with the Crypto Tribe, an alternative store of value that only exists because of the games central banks are playing; the opportunity cost of Crypto is so low, why not own some? The Foreign Currency Fighters have strengthened by 10% over the past year. Compounding the problem, they have a powerful, ascending leader, the renminbi, to challenge the US dollar’s hegemony as the reserve currency. All of these forces have been drawn to the battlefield because of our policy experiment with sustained negative real rates.

    So Powell looks behind him to retreat. But standing there is none other than Inflation Nation, led by the fiercest warmongers of them all: the Commodities. He might take comfort that he is not alone on the battlefield. But then he looks over at the Washington, DC, fiscal battalion and realizes they are drunk on 5% deficit beer. That’s what Powell is facing, whether he recognizes it or not. And how he navigates this is going to be fascinating to watch.

    Allison Nathan: So, what should Powell do?

    Paul Tudor Jones: Unlike his predecessors, he needs to be symmetrically fearless. Policy unorthodoxy needs to be reversed as quickly as it was deployed. After Alan Greenspan ignored the NASDAQ bubble, it crashed and led to this incredible foray into negative real rates. That created the mortgage bubble, which was initially ignored by Ben Bernanke and ultimately spawned the financial crisis, leading us to fiscal and monetary measures that were unfathomable 20 years ago.

    Today, we need a Fed chair who is proactive, not reactive. Policy-wise, that means moving as quickly as possible to  raise rates and restore appropriate risk premia so as to promote the long-term, efficient allocation of capital. While this will hurt a bit in the short run, it is better than the intergenerational theft that is being perpetrated now with the combination of low rates and high deficits. And it definitely will promote a more stable long-term economic equilibrium.

    It also means having honest discussions about financial stability. A “symmetrical” way to signal that our policy path is unsustainable is to conventionally use what has now become an unconventional tool through its disuse: raise margin
    requirements on stock borrowing. Whether you’re an individual or a corporation, now is not the time to be aggressively leveraging your balance sheet. In fact, for individuals, given the record-low personal savings rate, now is the time to be doing the exact opposite. Remember, saving is the seed corn of future investment and worthy of as much discussion as inflation. If the Fed doesn’t change its course, the systemic threat to the economy will only increase, making the eventual unwind that much more painful.

    Allison Nathan: You’ve repeatedly mentioned fiscal policy. Can you elaborate on your views on that?

    Paul Tudor Jones: I think the recent tax cuts and spending increases are something we will all look back on and regret. And I lay them firmly at the feet of the Fed for encouraging such a fiscal transgression by pursuing this experiment with negative real rates at full employment. With central banks globally experimenting with negative rates, zero rates, quantitative easing, and price targeting, it is easy to see how central governments could feel green-lighted to pursue unconventional fiscal policies. Certainly, central banks are not in a position to criticize them… If real rates had been at their long-term averages, would we have enacted a $1.5tn tax cut? My guess is the Congressional Budget Office’s scoring of the increased interest burden would have nixed it.

    Allison Nathan: In this context, what do you want to own?

    Paul Tudor Jones: I want to own commodities, hard assets, and cash. When would I want to buy stocks? When the deficit is 2%, not 5%, and when real short-term rates are 100bp, not negative. With rates so low, you can’t trust asset prices today. And if you can’t tell by now, I would steer very clear of bonds. Just think, Greece will have a budget deficit below 2% of GDP by the time ours grows to 5%-plus. The markets disciplined Greece for its budget transgressions; it’s just a matter of time before they discipline us. I think that time could be starting now with 10-year Treasuries rising to 3.75%, and 30-years to 4.5%, by year-end, and those are conservative targets.

    Allison Nathan: Won’t easier monetary policy in Europe and Japan cap the rise in US yields?

    Paul Tudor Jones: I don’t think so. Beginning next September, when the ECB concludes its asset purchases, the aggregate balance sheet of the main central banks will start contracting after nearly a decade of expansion. That will be a major data break, making it a horrible time to own bonds.

    Allison Nathan: Won’t rising yields attract some buyers?

    Paul Tudor Jones: No. Bond pension buying, for example, is very pro-cyclical. When stock prices rise, pensions reallocate their capital gains from stocks into bonds. As we’ve seen, this depresses the term premium and fuels more gains in the stock market. If and when the Fed raises rates enough to stop and reverse the stock market rise, that virtuous circle predicated on increasing capital gains will reverse, and bonds and stocks will decline together like they did in the 1970s.

    Allison Nathan: You are well-known for calling Black Monday. Is the recent surge in volatility behind us?

    Paul Tudor Jones: In my view, higher volatility is inevitable. Volatility collapsed after the crisis because of central bank manipulation. That game’s over. With inflation pressures now building, we will look back on this low-volatility period as a five standard- deviation event that won’t be repeated.

Digest powered by RSS Digest

Mar 01

Today’s News 1st March 2018

  • The Mystery Of The Russian Planes That Never Were

    Authored by Paul Rogers via OpenDemocracy.net,

    Most analysts blame Vladimir Putin’s aggressive political stance for the renewed hostility between Russia and the western states of the North Atlantic Treaty Organisation (NATO). The deteriorating relationship has been evident for a decade and more. The fallout from Moscow’s interventions in Georgia / South Ossetia (2008), Ukraine / Crimea (2014), and Syria (2015), as well as its reported disruption in the United States presidential election (2016), are but the main episodes. Lesser ones include displays of military strength that attract wide coverage in the western media.  

    Before looking in more detail at the latter, it is worth offering a touch of historical perspective on great-power interference. In particular, at a time when Moscow’s role in the US election is hotly disputed, a certain degree of hollow laughter is appropriate given Washington’s (and London’s) own dedicated efforts to influence elections and other political processes in many countries over many decades.

    One person involved in a Congressional investigation into CIA activities is Loch K Johnson, an experienced intelligence analyst at the University of Georgia. He characterizes Russia’s recent election endeavor as simply a cyber-age version of past US activities:

    “We’ve been doing this kind of thing since the C.I.A. was created in 1947.  We’ve used posters, pamphlets, mailers, banners – you name it. We’ve planted false information in foreign newspapers. We’ve used what the British call ‘King George’s cavalry’: suitcases of cash” (see Scott Shane, “Russia Isn’t the Only One Meddling in Elections. We Do It, Too.“, New York Times, 17 February 2018).

    US actions have gone much further than merely trying to undermine elections – as indeed have Britain’s in the Middle East, including the overthrow of Iran’s prime minister in 1953. These actions were memorably described by the much-decorated marine corps major-general, Smedley D Butler, in his memoirs:

    “I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer, a gangster for capitalism. I helped make Mexico and especially Tampico safe for American oil interests in 1914. I helped make Haiti and Cuba a decent place for the National City Bank boys to collect revenues in. I helped in the raping of half a dozen Central American republics for the benefit of Wall Street. I helped purify Nicaragua for the International Banking House of Brown Brothers in 1902-1912. I brought light to the Dominican Republic for the American sugar interests in 1916. I helped make Honduras right for the American fruit companies in 1903. In China in 1927 I helped see to it that Standard Oil went on its way unmolested. Looking back on it, I might have given Al Capone a few hints. The best he could do was to operate his racket in three districts. I operated on three continents.”

    The bigger picture

    All this puts Russia’s own numerous machinations, past and present (including in its incarnation as the Soviet Union), in the larger frame of routine great-power politics. In this light too, another view is possible on Russia’s recent media-heightened projection of military force.

    A case in point is the deployment of the aircraft-carrier Admiral Kuznetsov to the Mediterranean in January 2017, which provoked a great ruction in Britain’s media. The vessel is in reality an ageing warship more than thirty years old, prone to repeated propulsion mishaps and apt to have much of its plumbing freeze up, including toilets. Since its home port was on Russia’s Arctic coast, this alone was a bit of a drawback (see “Britain’s military: costs of failure, symbols of vanity“, 26 January 2018).   

    On the rare occasions when the carrier actually went to sea, it would be accompanied by an ocean-going tug in case it broke down. Indeed, when it finally got to the eastern Mediterranean in its recent deployment it lost two of its twelve strike-aircraft due to malfunctions. Most of the rest were eventually flown off to conduct their bombing raids from a Russian airbase within Syria, thus not from the Kuznetsov itself. In spite of all this, the ship’s advance near to the UK’s territory was still heralded in the British press as proof of a Russian threat and of the consequent need to increase military spending. 

    The frequency of Russian probes towards British airspace is further cited by Britain’s defense lobby as an even scarier indication of that threat. Regular reports of near incursions by those Tu-95 bombers, complete with accompanying videos, were offered as additional proof of Russia’s steady rise to global power (see “Russia and the west: risks of hype“, 6 October 2016).

    Russia may present many dangers, it may have plenty of nuclear weapons, and may have a leader determined to take risks to make Russia great again – but such reports of its frequent air incursions are anything but true.

    A recent freedom-of-information request to the UK defence ministry, reported by Jane’s Defence Weekly, shows a rather different state of affairs. In each of the years 2013, 2014 and 2015, the RAF scrambled fighters on seventeen, twenty, and twelve days respectively: but many were not in response to Russian sorties, which stood at just eight for each of the years.

    Moreover, in 2016 only five of the twelve days of “QRA” launches involved Russian aircraft, and in 2018 the incidence was only three out of six days (see Gareth Jennings, “UK notes marked decrease in number of days QRA intercepts flown against Russian aircraft“, Jane’s Defence Weekly, 12 February 2018).

    Such results are starkly different from public perceptions, as cultivated by the media. They remain one of the sustained planks in the narrative of a new threat from Russia. Even the data on the Russia flights only came to light through dedicated inquiry to unravel the information. Meanwhile, alarmist defense sources say next to nothing about the huge cost overruns on Britain’s own new aircraft-carriers, its nuclear-attack submarines and Trident replacements. The imbalance of attention is extreme.

    Perhaps the best way to look at the big picture is with another of Smedley D Butler’s choice quotes, dating from 1935:

    “A few profit – and the many pay. But there is a way to stop it. You can’t end it by disarmament conferences. You can’t eliminate it by peace parleys at Geneva. Well-meaning but impractical groups can’t wipe it out by resolutions. It can be smashed effectively only by taking the profit out of war.”

  • State Department Committs $40 Million For "Information Wars"

    The Pentagon will allocate $40 million into an inter-agency unit housed at the State Department to counter online propaganda and disinformation campaigns conducted by foreign nations, in an effort to respond “aggressively” to attacks. 

    The program was announced by the State Department this week in conjunction with the US Department of Defense, which will allocate the funds to the Global Engagement Center (GEC) – created in spring 2016 to replace the Center for Strategic Counterterrorism Communications (CSCC). 

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

    “One of those initiatives is the creation of an Information Access Fund to support public and private partners working to expose and counter propaganda and disinformation from foreign nations.“

    This funding is critical to ensuring that we continue an aggressive response to malign influence and disinformation and that we can leverage deeper partnerships with our allies, Silicon Valley, and other partners in this fight, said Under Secretary Goldstein. It is not merely a defensive posture that we should take, we also need to be on the offensive.

    Last year Secretary of State Rex Tillerson requested that $40 million be transferred from the Department of Defense, with an overall allocation of up to $60 million from the US Defense budget. The funding was authorized in a December 2016 defense bill signed by President Obama – which widened the scope of the center’s activities.

    Previously, the GEC had focused exclusively on terrorist propaganda, however it was Tillerson’s request for the funds that got the ball rolling on the expanded operation. 

    Almost $20 million of the $60 million was already in the State Departments coffers and will be released to the center’s officials to fight propaganda by terrorist groups such as the Islamic State. Tillerson also approved a request for a transfer of $40 million from the Pentagon to the center so it can fight state-sponsored propaganda. –Politico

    The GEC will counter disinformation campaigns primarily from China, North Korea and Russia.

    Tillerson’s delay in implementing funding authorized for the GEC had frustrated U.S. officials – who called it an example of “severe slowdown” within the State Department’s decision making process. Sources, however, cited another factor at play; angering Russia.

    At one point during the discussions, Tillerson aide R.C. Hammond suggested the money is unwelcome because any extra funding for programs to counter Russian media influence would anger Moscow, according to a former senior State Department official. –Politico

    Hopefully the good folks at the GEC will be able to match forces with the “90 people with a shaky grasp of English and a rudimentary understanding of U.S. politics shitposting on Facebook.” at that Russian troll farm whose trash CNN went rooting through a few weeks ago. The one which Deputy Attorney General Rod Rosenstein said had zero effect on the outcome of the election. 

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

    Maybe the GEC can consult with Facebook’s VP of advertising, Rob Goldman, who noted that the majority of the Russian ad spend happened “AFTER the election,” and wasn’t intended to impact the election. Apparently dividing America by stoking political activism was their thing.

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

    Just remember, it wasn’t Hillary’s fault that she lost – and the GEC will keep feeble-minded Americans safe and un-propagandized by foreign masterminds.

  • Gun Rights And Mental Health Restrictions: A Slippery Slope

    Authored by Brandon Smith via Alt-Market.com,

    In the wake of the Parkland shooting, as in the wake of any mass shooting, there has been a scramble by various political groups to place blame for the violence. Everyone is looking for the source of the evil that causes these events, to little avail. In most cases, at least when it comes to the extreme Left, the blame is placed squarely on guns themselves. This is obviously an absurd notion. Placing blame on the particular tool used in the crime does not solve the problem of the criminal and what led him to the deed. Whether or not the tool made his crime “easier” is irrelevant to the greater disturbance at hand.

    After years of debate and failed legislation, leftists have discovered that resistance to the incremental destruction of the 2nd Amendment is insurmountable, and a change in narrative has occurred.

    Finally, we are talking more about mental health issues and a little less about guns. This is a win for gun rights, however, there is a danger that needs to be addressed.

    First, while mental health is being presented in the mainstream media more and more as a central issue in mass shootings, I find it interesting that the problem of psychotropic pharmaceuticals has been conveniently ignored. In a large number of non-terrorist related shooting incidents, assailants have been subjected to long term psychotropic drug use. Why has this factor not been addressed?

    Well, consider the fact that Big Pharma has spent at least $2.5 billion over the past ten years lobbying in Washington D.C. Compare this to the NRA lobbying budget, which in comparison was a paltry $20 million over the past 10 years according to OpenSecret.

    This should put into perspective the idiocy of anti-gun advocates and their obsession with the “nefarious” NRA. The influence of the pharmaceutical industry is almost universally ignored when it comes to the debate on gun violence, yet their lobbying efforts dwarf all others. All this despite the fact that psychotropic drugs are proven to influence violent and even homicidal behavior in people.

    Second, the focus on mental health in terms of the Parkland shooting seems to be glossing over the vast failings of the FBI and local law enforcement in following up and investigating the dozens of warnings they received about Nikolas Cruz.  As I outlined in my recent article ‘“Mass shootings will never negate the need for gun rights,” gun grabbers love to trot out legislation on increased background check restrictions and closing the “gun show loophole,” yet none of their suggested solutions would have stopped the Parkland tragedy from taking place.

    The success of Nikolas Cruz’s attack was due to the abject failure of the FBI and law enforcement, NOT the failure of background checks. Had they done their jobs, Cruz never would have been able to purchase a firearm to begin with. I find it rather ironic that gun grabbers constantly argue that average citizens do not need guns for self defense because they have law enforcement to rely on, yet it was exactly the stupidity or inaction of law enforcement that opened the door wide for Cruz to (allegedly) kill.

    Clearly, the so-called “authorities” are not trustworthy enough to carry out the job of protecting us all from active shooters. The only people capable of stopping an active shooter in a fast and practical manner are armed citizens on the scene at the moment the attack begins.

    Third, and most important, is the issue of mental health parameters and how they will be used to restrict gun rights. The ATF already has rules regarding people “adjudicated as mentally defective,” which includes people ruled a danger to themselves and others by a “court, board or commission or other lawful authority.” Now, these guidelines themselves can be rather broad, but abuse by government so far has been limited (though some instances have been egregious). If the Trump administration seeks to broaden the guidelines even further, then we may have a problem.

    Take for example the unacceptable abuse of military veterans and their 2nd Amendment rights by the Bureau of Veterans Affairs. The VA has in recent years placed restrictions on thousands of veterans, negating their gun rights without due process and without oversight. And all of this has been predicated on the claim that some veterans are “mentally defective” based on dubious parameters, including whether or not they let their spouse handle household finances.

    This is what I am talking about when I bring up the dangers behind “mental illness” and gun rights. WHO gets to decide who is mentally ill and why they are mentally ill? Will this be done by a jury of our peers? Or, by an unaccountable and faceless bureaucracy? Will the guidelines for mental illness be strict and specific, or will they be broad and wide open to interpretation? Once a person has been labeled mentally defective, will they have the ability to appeal the decision, or will the label haunt them for the rest of their lives?

    Gun rights activists should not put blind faith in the Trump administration to ensure that new mental health legislation will remain fair to the 2nd Amendment. Unfortunately, Trump is on record as supporting the “No Fly List” gun control bill. This type of bill is something liberty activists opposed vehemently under the Obama administration because it allows the government to erase the gun rights of almost anyone without due process merely by placing them on an arbitrary watch list. A list, I will remind readers, that is a matter of national security and not subject to public overview.

    Would a list of “mentally defective people” fall under the same Orwellian standards?

    What about the new and disturbing designation by the psychiatric community of oppositional defiance disorder? This absurd “illness” is being applied to people as young as pre-school age and suggests that adults with the illness often display resistance to authority figures and government.

    What if your opposition is not to “authority” in general, but to CORRUPT authority specifically? Is this mental illness, or the very epitome of sanity?

    In the Soviet Union, it was all too common for the government to abuse “mental illness” designations as a means to silence and imprison political dissent. Anti-government agitation and propaganda were criminalized under Soviet legal codes, and these codes were frequently applied in conjunction with the psychiatric system. This was sometimes referred to as “punitive medicine.”

    The problem with government and psychiatric institutions joining forces to determine constitutional rights for individuals should be obvious. Government should be as separate from the medical establishment as possible yet they are often intertwined to terrible effect. If mental illness is not adjudicated by a jury of ones peers and with extreme oversight by gun rights groups, then abuse of such laws by government is almost guaranteed. The temptation to use backdoor bureaucracy in a totalitarian manner to underhandedly confiscate guns and sabotage the 2nd Amendment will be high.

    It is also important to remember that even if you have placed full and blind faith in the Trump administration, there are no guarantees that the constitutional rules we allow him to bend today will not be completely broken by the next president in line. Gun rights are paramount to a free society. Without them, governments almost always revert to increased socialism and “tyranny creep” while violent crime continues or increases as the citizenry is left defenseless. Mental illness AND psychotropic drugs need to be taken seriously in terms of gun violence, but it is also vital that we do not allow the issue of mental health to be exploited as a subversive means to undermine our freedoms.

  • Economists' Latest Leading Recessionary Indicator: Sex

    When it comes to unorthodox indicators of the business cycle – especially when the business cycle is the second longest in history such as this one – economists have always had creative ways of “calculating” where in the cycle we are at any given moment.

    Starting in the 1926s, economist George Taylor came up with the “hemline index” which suggested that the length of women’s skirts tracked stock market performance — rising and falling in tandem. In good economies, we get such results as miniskirts while in poor economic times, as shown by the 1929 Wall Street Crash, hems can drop almost overnight.

    Several decades later, former Fed chair Alan Greenspan used to track sales of men’s underwear, which he said fell at the onset of recessions as men delayed buying new underwear during tough economic times.

    Then there was the lipstick index proposed by Estée Lauder chairman Leonard Lauder in 2001: he claimed that purchases of cosmetics were inversely correlated with the health of the economy (the idea was later discredited). The 2008 recession gave rise to the tie index, sales of which, it was claimed, rise as employees fear for their jobs.

    Now, according to new research there is a new indicator that can warn of a coming recession: sex, or rather the 9 month consequences thereof: the rise and fall of pregnancies.

    According to a paper paper published on Monday by the National Bureau of Economic Research, ahead of the past three US recessions, the number of conceptions began to fall at least six months before the economy started to contract. As the FT notes, while previous research has shown how birth rates track economic cycles, the scientific study is the first to show that fertility declines are a leading indicator for recessions.

    Speaking to the FT, Daniel Hungerman, economics professor at the University of Notre Dame and one of the report’s authors, said it was “striking” that the drop in pregnancies was evident before the recession that came after the 2007 financial crisis, since it has traditionally been argued that this slump had been hard to predict.

    It may be difficult for “experts” but apparently not for a couple deciding what to do next in the bedroom.

    The analysis used data on the 109 million births in the US between 1989-2016 to examine how fertility rates changed through the last three economic cycles — in the early 1990s, the early 2000s and the late 2000s. A similar pattern emerged in all three cases.

    The researchers focused on birth data from the National Center for Health Statistics, looking at clinical estimates for the month of conception. They compared that to the dates of the recessions, as calculated by the NBER, and to changes in the GDP. The change in birth rates was driven by a drop in conceptions, not an increase in abortion or miscarriage, the researchers found. In other words, less sex with the intent to procreate. 

    “One way to think about this is that the decision to have a child often reflects one’s level of optimism about the future,” says Kasey Buckles, another Notre-Dame professor and co-author of the study. Research published through the NBER is often conducted by academics at their own universities.

    To the researchers’ surprise, they found that falls in conceptions were a far better leading indicator of recessions than many commonly used indicators such as consumer confidence, measures of uncertainty, and purchases of big-ticket items such as washing machines and cars.

    “None of the experts saw it coming and in its first few months many business leaders were convinced the economy was doing OK,” he says. The fertility statistics told a different story.

    Take the Great Recession. The U.S. birth rate, rising before the recession, fell in 2008, as one might expect. But back up before that — to the middle of 2007. The subprime mortgage crisis was hurting the housing market, but the broader effect on the economy was not yet apparent. As the NPR notes, stock prices kept hitting all-time highs. Unemployment was below 5 percent. Analysts were confident, optimistic. In July, the chief economist of Standard & Poor’s told NPR listeners that “the rest of the economy so far has been ignoring the housing crisis very nicely.”

    It was months before the recession began, as NBER later calculated it, and more than a year before the collapse of Lehman Brothers triggered a global panic.

    But, the researchers found, the U.S. conception rate had already started to drop.

    “That’s what makes our results surprising,” Buckle says. “While the best of the experts didn’t see the Great Recession coming, it seems that families and households were feeling those tremors and responding to it.”

    The researchers suggest several possible explanations, including the natural time lag with attempting to conceive, the increasing age of first-time mothers and the growing popularity of long-acting birth control.

    * * *

    To be sure, this may be just another case of spurious correlation, especially now that the Fed has killed the business cycle. Indeed, researchers admitted that the correlation between conceptions and recessions is not perfect, and there have been periods when conceptions have fallen but the economy has not.

    Professor Buckles said: “It might be difficult in practice to determine whether a one-quarter drop in conceptions is really signalling a future downturn. However, this is also an issue with many commonly used economic indicators.”

    So what does the latest data indicate? Well, as the chart below shows, after peaking in some time in 2013, the US is now deep in its latest recession, at least based on pregnancy rates. Ironically, it is now up to the NBER – the author of the paper – to determine if that is indeed the case.

  • Browbeaten Sessions Dines With Rosenstein After Spat With Trump

    After a day of taking heat from the President over a “disgraceful” investigation into FISA abuse, Attorney General Jeff Sessions grabbed dinner Wednesday night with his deputy AG Rod Rosenstein and the Solicitor General, Noel Francisco.

    ​​​​​photo: Axios

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

    While it’s anyone’s guess what the trio discussed, the image of Sessions, dining with Rosenstein – who signed off on one or more “Steele dossier” FISA applications – is unmistakable: Sessions enjoys the culinary delights of the swamp. 

    From refusing to appoint a Special Counsel to investigate the suspected Awan family spy ring, to seemingly covering for the FBI’s mishandling of evidence in the Uranium One case – which Robert Mueller and Rod Rosenstein were directly involved in, to now relegating the FISA abuse investigation to the Office of the Inspector General (OIG) instead of appointing a second Special Counsel – many believe Sessions has been stonewalling for the establishment. 

    But wait… could this be 4D chess? Perhaps Sessions simply doesn’t trust anyone “from the swamp” to lead Special Counsel investigations – and Inspector General Michael Horowitz – who Trump referred to as an “Obama guy,” is about to set D.C. on fire with his upcoming OIG report. He also fought the Obama administration for several years to restore OIG powers which the previous administration stripped. You can read more about Horowitz here, and will likely conclude that he’s no “Obama guy.”

    a

    Earlier in the day, President Trump fired off an angry tweet rebuking Sessions for asking the OIG – an “Obama guy,” to “investigate potentially massive FISA abuse.” 

    Trump said the investigation will “take forever, has no prosecutorial power and already late with reports on Comey etc. Isn’t the IG an Obama guy? Why not use Justice Department lawyers? DISGRACEFUL!”

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

    Sessions fired back in a stiffly-worded statement to Trump, defending his handling of the FISA investigation by saying he followed the “appropriate process” by ordering the IG to investigate and that, as long as he remains attorney general, he will “continue to discharge my duties with integrity and honor.”

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

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

    On its face, Sessions publicly “swimming with the swamp creatures” while appearing to stonewall several legitimate investigations into potential espionage, election interference, and pay-for-play has infuriated those who expected Hillary to be in jail by now, along with the Awans and corrupt FBI and DOJ officials (some of whom are still collecting paychecks). 

    On the other hand, perhaps Sessions knows that Inspector General Michael Horowitz is simply the best man for the job, and today’s entire exchange between Trump and Sessions was nothing more than theater while ongoing investigations mature. 

    One has to wonder; in a swampy town like D.C., who would lead a second Special Counsel into anything anyway?

  • All Guns, No Butter: Military Contractors As The New Welfare Queens

    What company gets the most money from the U.S. government?

    The answer, via Tom Engelhardt’s TomDispatch.com: the weapons maker Lockheed Martin. As the Washington Post recently reported, of its $51 billion in sales in 2017, Lockheed took in $35.2 billion from the government, or close to what the Trump administration is proposing for the 2019 State Department budget.

    And which company is in second place when it comes to raking in the taxpayer dollars?

    The answer: Boeing with a mere $26.5 billion.

    And, as Engelhardt notes, that’s before the good times even truly begin to roll, as TomDispatch regular and weapons industry expert William Hartung makes clear today in a deep dive into the (ir)realities of the Pentagon budget. 

    When it comes to the Department of Defense, though, perhaps we should retire the term “budget” altogether, given its connotation of restraint. Can’t we find another word entirely? Like the Pentagon cornucopia?

    How the Pentagon Devours the Budget: Normalizing Budgetary Bloat

    By William D. Hartung

    Imagine for a moment a scheme in which American taxpayers were taken to the cleaners to the tune of hundreds of billions of dollars and there was barely a hint of criticism or outrage.  Imagine as well that the White House and a majority of the politicians in Washington, no matter the party, acquiesced in the arrangement.  In fact, the annual quest to boost Pentagon spending into the stratosphere regularly follows that very scenario, assisted by predictions of imminent doom from industry-funded hawks with a vested interest in increased military outlays.

    Most Americans are probably aware that the Pentagon spends a lot of money, but it’s unlikely they grasp just how huge those sums really are.  All too often, astonishingly lavish military budgets are treated as if they were part of the natural order, like death or taxes.

    The figures contained in the recent budget deal that kept Congress open, as well as in President Trump’s budget proposal for 2019, are a case in point: $700 billion for the Pentagon and related programs in 2018 and $716 billion the following year.  Remarkably, such numbers far exceeded even the Pentagon’s own expansive expectations.  According to Donald Trump, admittedly not the most reliable source in all cases, Secretary of Defense Jim Mattis reportedly said, “Wow, I can’t believe we got everything we wanted” — a rare admission from the head of an organization whose only response to virtually any budget proposal is to ask for more.

    The public reaction to such staggering Pentagon budget hikes was muted, to put it mildly. Unlike last year’s tax giveaway to the rich, throwing near-record amounts of tax dollars at the Department of Defense generated no visible public outrage.  Yet those tax cuts and Pentagon increases are closely related.  The Trump administration’s pairing of the two mimics the failed approach of President Ronald Reagan in the 1980s — only more so.  It’s a phenomenon I’ve termed “Reaganomics on steroids.”  Reagan’s approach yielded oceans of red ink and a severe weakening of the social safety net.  It also provoked such a strong pushback that he later backtracked by raising taxes and set the stage for sharp reductions in nuclear weapons. 

    Donald Trump’s retrograde policies on immigration, women’s rights, racial justice, LGBT rights, and economic inequality have spawned an impressive and growing resistance.  It remains to be seen whether his generous treatment of the Pentagon at the expense of basic human needs will spur a similar backlash.

    Of course, it’s hard to even get a bead on what’s being lavished on the Pentagon when much of the media coverage failed to drive home just how enormous these sums actually are. A rare exception was an Associated Press story headlined “Congress, Trump Give the Pentagon a Budget the Likes of Which It Has Never Seen.” This was certainly far closer to the truth than claims like that of Mackenzie Eaglen of the conservative American Enterprise Institute, which over the years has housed such uber-hawks as Dick Cheney and John Bolton.  She described the new budget as a “modest year-on-year increase.” If that’s the case, one shudders to think what an immodest increase might look like.

    The Pentagon Wins Big

    So let’s look at the money. 

    Though the Pentagon’s budget was already through the roof, it will get an extra $165 billion over the next two years, thanks to the congressional budget deal reached earlier this month.  To put that figure in context, it was tens of billions of dollars more than Donald Trump had asked for last spring to  “rebuild” the U.S. military (as he put it).  It even exceeded the figures, already higher than Trump’s, Congress had agreed to last December.  It brings total spending on the Pentagon and related programs for nuclear weapons to levels higher than those reached during the Korean and Vietnam wars in the 1950s and 1960s, or even at the height of Ronald Reagan’s vaunted military buildup of the 1980s. Only in two years of Barack Obama’s presidency, when there were roughly 150,000 U.S. troops in Iraq and Afghanistan, or about seven times current levels of personnel deployed there, was spending higher.

    Ben Freeman of the Center for International Policy put the new Pentagon budget numbers in perspective when he pointed out that just the approximately $80 billion annual increase in the department’s top line between 2017 and 2019 will be double the current budget of the State Department; higher than the gross domestic products of more than 100 countries; and larger than the entire military budget of any country in the world, except China’s.

    Democrats signed on to that congressional budget as part of a deal to blunt some of the most egregious Trump administration cuts proposed last spring.  The administration, for example, kept the State Department’s budget from being radically slashed and it reauthorized the imperiled Children’s Health Insurance Program (CHIP) for another 10 years.  In the process, however, the Democrats also threw millions of young immigrants under the bus by dropping an insistence that any new budget protect the Deferred Action for Childhood Arrivals, or “Dreamers,” program.  Meanwhile, the majority of Republican fiscal conservatives were thrilled to sign off on a Pentagon increase that, combined with the Trump tax cut for the rich, funds ballooning deficits as far as the eye can see — a total of $7.7 trillion worth of them over the next decade.

    While domestic spending fared better in the recent congressional budget deal than it would have if Trump’s draconian plan for 2018 had been enacted, it still lags far behind what Congress is investing in the Pentagon.  And calculations by the National Priorities Project indicate that the Department of Defense is slated to be an even bigger winner in Trump’s 2019 budget blueprint. Its share of the discretionary budget, which includes virtually everything the government does other than programs like Medicare and Social Security, will mushroom to a once-unimaginable 61 cents on the dollar, a hefty boost from the already startling 54 cents on the dollar in the final year of the Obama administration.

    The skewed priorities in Trump’s latest budget proposal are fueled in part by the administration’s decision to embrace the Pentagon increases Congress agreed to last month, while tossing that body’s latest decisions on non-military spending out the window.  Although Congress is likely to rein in the administration’s most extreme proposals, the figures are stark indeed — a proposed cut of $120 billion in the domestic spending levels both parties agreed to. The biggest reductions include a 41% cut in funding for diplomacy and foreign aid; a 36% cut in funding for energy and the environment; and a 35% cut in housing and community development.  And that’s just the beginning.  The Trump administration is also preparing to launch full-scale assaults on food stamps, Medicaid, and Medicare.  It’s war on everything except the U.S. military. 

    Corporate Welfare

    The recent budget plans have brought joy to the hearts of one group of needy Americans: the top executives of major weapons contractors like Lockheed Martin, Boeing, Northrop Grumman, Raytheon, and General Dynamics. They expect a bonanza from the skyrocketing Pentagon expenditures. Don’t be surprised if the CEOs of these five firms give themselves nice salary boosts, something to truly justify their work, rather than the paltry $96 million they drew as a group in 2016 (the most recent year for which full statistics are available).  

    And keep in mind that, like all other U.S.-based corporations, those military-industrial behemoths will benefit richly from the Trump administration’s slashing of the corporate tax rate.  According to one respected industry analyst, a good portion of this windfall will go towards bonuses and increased dividends for company shareholders rather than investments in new and better ways to defend the United States.  In short, in the Trump era, Lockheed Martin and its cohorts are guaranteed to make money coming and going.

    Items that snagged billions in new funding in Trump’s proposed 2019 budget included Lockheed Martin’s overpriced, underperforming F-35 aircraft, at $10.6 billion; Boeing’s F-18 “Super Hornet,” which was in the process of being phased out by the Obama administration but is now written in for $2.4 billion; Northrop Grumman’s B-21 nuclear bomber at $2.3 billion; General Dynamics’ Ohio-class ballistic missile submarine at $3.9 billion; and $12 billion for an array of missile-defense programs that will redound to the benefit of… you guessed it: Lockheed Martin, Raytheon, and Boeing, among other companies.  These are just a few of the dozens of weapons programs that will be feeding the bottom lines of such companies in the next two years and beyond.  For programs still in their early stages, like that new bomber and the new ballistic missile submarine, their banner budgetary years are yet to come.

    In explaining the flood of funding that enables a company like Lockheed Martin to reap $35 billion per year in government dollars, defense analyst Richard Aboulafia of the Teal Group noted that “diplomacy is out; air strikes are in… In this sort of environment, it’s tough to keep a lid on costs. If demand goes up, prices don’t generally come down. And, of course, it’s virtually impossible to kill stuff. You don’t have to make any kind of tough choices when there’s such a rising tide.” 

    Pentagon Pork Versus Human Security

    Loren Thompson is a consultant to many of those weapons contractors.  His think tank, the Lexington Institute, also gets contributions from the arms industry.  He caught the spirit of the moment when he praised the administration’s puffed-up Pentagon proposal for using the Defense Department budget as a jobs creator in key states, including the crucial swing state of Ohio, which helped propel Donald Trump to victory in 2016.  Thompson was particularly pleased with a plan to ramp up General Dynamics’s production of M-1 tanks in Lima, Ohio, in a factory whose production line the Army had tried to put on hold just a few years ago because it was already drowning in tanks and had no conceivable use for more of them. 

    Thompson argues that the new tanks are needed to keep up with Russia’s production of armored vehicles, a dubious assertion with a decidedly Cold War flavor to it.  His claim is backed up, of course, by the administration’s new National Security Strategy, which targets Russia and China as the most formidable threats to the United States.  Never mind that the likely challenges posed by these two powers — cyberattacks in the Russian case and economic expansion in the Chinese one — have nothing to do with how many tanks the U.S. Army possesses.

    Trump wants to create jobs, jobs, jobs he can point to, and pumping up the military-industrial complex must seem like the path of least resistance to that end in present-day Washington.  Under the circumstances, what does it matter that virtually any other form of spending would create more jobs and not saddle Americans with weaponry we don’t need?

    If past performance offers any indication, none of the new money slated to pour into the Pentagon will make anyone safer.  As Todd Harrison of the Center for Strategic and International Studies has noted, there is a danger that the Pentagon will just get “fatter not stronger” as its worst spending habits are reinforced by a new gusher of dollars that relieves its planners of making any reasonably hard choices at all.

    The list of wasteful expenditures is already staggeringly long and early projections are that bureaucratic waste at the Pentagon will amount to $125 billion over the next five years.  Among other things, the Defense Department already employs a shadow work force of more than 600,000 private contractors whose responsibilities overlap significantly with work already being done by government employees.  Meanwhile, sloppy buying practices regularly result in stories like the recent ones on the Pentagon’s Defense Logistics Agency losing track of how it spent $800 million and how two American commands were unable to account for $500 million meant for the war on drugs in the Greater Middle East and Africa.

    Add to this the $1.5 trillion slated to be spent on F-35s that the nonpartisan Project on Government Oversight has noted may never be ready for combat and the unnecessary “modernization” of the U.S. nuclear arsenal, including a new generation of nuclear-armed bombers, submarines, and missiles at a minimum cost of $1.2 trillion over the next three decades.  In other words, a large part of the Pentagon’s new funding will do much to fuel good times in the military-industrial complex but little to help the troops or defend the country.

    Most important of all, this flood of new funding, which could crush a generation of Americans under a mountain of debt, will make it easier to sustain the seemingly endless seven wars that the United States is fighting in Afghanistan, Pakistan, Syria, Iraq, Libya, Somalia, and Yemen.  So call this one of the worst investments in history, ensuring as it does failed wars to the horizon. 

    It would be a welcome change in twenty-first-century America if the reckless decision to throw yet more unbelievable sums of money at a Pentagon already vastly overfunded sparked a serious discussion about America’s hyper-militarized foreign policy.  A national debate about such matters in the run-up to the 2018 and 2020 elections could determine whether it continues to be business-as-usual at the Pentagon or whether the largest agency in the federal government is finally reined in and relegated to an appropriately defensive posture.

  • The South Side Is Turning Against Obama

    In one of “The Dark Knight”‘s most memorable scenes, disgraced Gotham City district attorney Harvey Dent proclaims that “you either die a hero, or live long enough to see yourself become the villain.”

    Former President Barack Obama can probably empathize with those words right about now. As Politico Magazine reports, Obama’s building of his presidential library and community center has elicited a backlash from activists in Woodlawn – the South Side neighborhood where the project is being built, and where Obama once worked as a community organizer.

    That’s because neighborhood residents, who are worried about the center’s potential to attract a wave of gentrifiers to their poor, predominantly black neighborhood, are pushing the non-profit responsible for building the center to agree to more assurances that the project will bring adequate economic benefits to the region to offset the potential negative impact of gentrification.

    Obama

    Of course, Obama has already agreed to staff the center with residents from the neighborhood, but activists are pushing for an arrangement called a “community benefit agreement”, which would force cash-strapped Chicago to freeze property taxes, and would also provide guarantees of low-income housing to stop residents from being pushed out by newcomers. 

    Politico leads its piece with a colorful anecdote about a confrontation between Jeanette Taylor, a community activist, and Obama, who attended a community meeting via video link.

    As she entered the hotel ballroom, Taylor expected to interrogate a member of the foundation’s staff. Instead, she found herself face to face with Obama himself, appearing by video conference from Washington.

    “The library is a great idea, but what about a community benefits agreement?” Taylor asked, referring to a contract between a developer and community organizations that requires investments in, or hiring from, a neighborhood where a project is built. “The first time investment comes to black communities, the first to get kicked out is low-income and working-class people. Why wouldn’t you sign a CBA to protect us?”

    Measured as always, Obama began by telling Taylor, “I was a community organizer.” Then he said, “I know the neighborhood. I know that the minute you start saying, ‘Well, we’re thinking about signing something that will determine who’s getting jobs and contracts and this and that’ … next thing I know, I’ve got 20 organizations coming out of the woodwork.”

    The answer infuriated Taylor, who pays $1,000 a month for the Woodlawn apartment she shares with her mother and two children, and is worried that the Obama Center’s cachet will drive up neighborhood rents. Months later, she is still furious at the former president.

    “He got a lot of nerve saying that,” Taylor told me. “He forgotten who he is. He forgot the community got him where he is.”

    As the piece explains, a coalition of more than a dozen local groups have attracted considerable support for their campaign to force the Obama library to offer assurances that will protect locals from the negative impacts of gentrification, which are inevitably borne by a community’s poorest and most vulnerable citizens.

    Since 2016, more than a dozen local groups – neighborhood organizations, labor unions and tenants’ rights activists – have come together to form the Obama Library South Side Community Benefits Coalition, which is pushing the library to account for local needs. At the University of Chicago, where Obama once taught at the law school, more than 100 faculty members signed a letter in January supporting the demands of local organizers. “There are concerns that the Obama Center as currently planned will not provide the promised development or economic benefits to the neighborhoods,” the letter reads. “It looks to many neighbors that the only new jobs created will be as staff to the Obama Center.”

    The CBA being sought by the activists would go a long way toward protecting the community from an economic invasion.

    The contract that community organizers are demanding—the “community benefits agreement”—would require the city to freeze property taxes within a 2-mile radius of the Obama Center and guarantee “a significant guaranteed set-aside of new housing for low-income housing in the area surrounding” the center. It would also require the foundation to establish a trust fund for nearby public schools and small businesses, and mandate that 80 percent of library construction jobs go to South Side residents.

    According to several experts quoted by Politico, asking the project to come with a CBA isn’t an altogether unreasonable or unprecedented request.

    Developers frequently sign CBAs to build neighborhood goodwill that in turn helps them win permits from local governments, says Virginia Parks, a CBA expert who teaches urban planning at the University of California-Irvine and formerly taught at the University of Chicago. Some well-known examples include the Staples Center in Los Angeles, which devoted $1 million to parks and agreed to pay a living wage for 70 percent of its jobs; and Columbia University, which built a $30 million public school and $20 million in affordable housing in exchange for expanding into West Harlem.

    “[CBAs] evolved initially because communities couldn’t get traction within the public arena,” Parks said. “The organizing effort put pressure on the city. Elected officials would say, ‘If I’m going to approve this, I’m going to need you to work out some agreement with these people, who are my voters.’

    For what it’s worth, Obama and the foundation responsible for overseeing construction of the center say they’ve addressed local organizers’ concerns. The center will include a 235-foot tower, a Chicago Public Library branch and a campus on 19.3 acres of parkland. In short, it is a “community benefit” in and of itself.

    David Simas, the foundation’s CEO and Obama’s former political director in the White House, pointed out in an interview that “this is not a private project. The model doesn’t fit.” Negotiating with community organizations, foundation officials argue, will just slow down construction of a project that will only benefit the south side economically.

    Furthermore, an economic impact study commissioned by the foundation projected that the center would create 5,000 construction jobs and 2,500 permanent jobs on the campus and in the surrounding area after it opens in 2022. Some community activists agree, saying the Lakeside Alliance contract adequately addresses activists’ concerns about minority hiring.

    Meanwhile, activists have begun lobbying Chicago aldermen to pass an ordinance that would mandate a CBA for the project. Several of the activists who spoke with Politico agreed that their campaign to hold Obama’s foundation accountable is exactly the kind of project Obama himself would’ve worked on 30 years ago when he was still a community organizer.

    But that was then.

    “Of course, he would have,” Taylor said. “But now he’s part of the establishment.”

  • Our Fragmented Labor Markets Defy Outdated Conventions

    Authored by Charles Hugh Smith via OfTwoMinds blog,

    There are hundreds of extraordinarily diverse labor markets in the U.S. economy, and it takes a much more granulated approach to make any sense of this highly fragmented and dynamic marketplace.

    Conventional economists/media pundits typically view the labor market as monolithic, i.e. as one unified market. The reality is the labor market is highly fragmented. Thus it’s little wonder that conventional measures are giving mixed signals on employment, wage inflation, etc.

    Here is a typical chart of the labor market: the annual rate of change in hourly earnings, going back to the late 1960s. I’ve annotated the chart to show that hourly earning rose sharply in the inflationary 1970s, but since then have only popped higher in asset bubbles–the dot-com era and the housing bubble:

    Gneralized measures that lump all wage earners together give us a snapshot of trends, but they fail to describe the realities of today’s labor markets. The reality is much more complex, and thus beyond the outdated conventions that divide the labor force into broad sectors:

    1. While most workers are receiving little in the way of wage increases, employers’ total compensation costs are soaring due to skyrocketing healthcare premiums and other labor-overhead costs such as workers compensation.

    Economists puzzled by the lack of wage inflation in an era of “full employment” should look at total compensation costs instead of wages: the inflation is in the labor-overhead costs, not employee compensation.

    2. Regions dominated by a handful of employers do not offer many opportunities for employees to jump to other employers for higher pay. This lack of competition enables dominant employers to suppress wage growth.

    3. Scarcities of skills and experience that drive wages higher tend to be sector-specific and are often localized. Across the broad spectrum of basic skills and experience (for example, white-collar work performed by employees with non-technical college diplomas), there are few scarcities that could push wages higher.

    4. Regardless of labor availability/scarcity, many small-business employers can’t afford to pay higher wages, given their soaring labor-overhead expenses. If wages rise, their options include selling out, closing down, or doing more of the work themselves. Paying higher wages will simply guarantee monthly losses. If you’re losing money operating an enterprise, why be in business?

    5. Employers demand a great deal now of lower-wage service sector employees. Fast-food jobs (for example) require high levels of productivity in a rigidly structured factory setting. There are few “easy” jobs left in the U.S. economy that require little training and pay for low productivity.

    As a result, a great many people do not have the ability or willingness to take these grueling jobs. Reasons include physical limitations, pride (“I’m not wearing that dumb uniform”), a black market income that’s much easier than available conventional jobs, inability to pass mandatory drug tests, etc.

    6. The opioid epidemic and other drug addictions have removed millions of people from the work force. Disability is now the option of choice for those who qualify.

    7. These factors turn the conventional wisdom on its head: rather than there being a surplus of lower-wage, lower skilled workers and a shortage of college-educated workers, there are shortages of lower-wage, lower skilled workers and a surplus of college-educated workers.

    8. The cultural and educational bias in favor of “clean work” and high-visibility finance and entertainment has generated scarcities of skilled welders, pipefitters, etc., (“dirty physical work”) and an astounding over-abundance of people who expect to earn a living as musicians, entertainers, writers, pro athletes, smart-phone app entrepreneurs, restaurateurs, hedge fund managers, etc., fields in which a relative handful of people earn most of the income.

    The reality is these are winner take most fields of endeavor, and the vast majority of hopefuls will earn a tiny piece of the long-tail of income distribution.

    In tandem with the general erosion in real-world skills (i.e. preference for watching cooking shows over actually cooking 95% of your own meals, inability to change the oil in one’s vehicle, grow food, prune fruit trees, repair rotted stairs, fix appliances, repair a leaky faucet, install a solar panel, and so on), this cultural and educational bias in favor of narrow service skills and extreme specialization has left the work force poorly adapted on multiple fronts.

    Skills such as welding and plumbing don’t change much; once mastered, the skills can be applied for decades with little retraining being required. But the sort of “clean work” service jobs people favor are the ones most easily disrupted by automation, software and AI.

    As for over-specialization, as often noted here, issuing 100,000 new graduate-level STEM diplomas (science, technology, engineering, math) does not magically create 100,000 high-paying secure jobs for the graduates.

    Instead, we have a system of higher education that implicitly over-promises the rewards of law degrees, masters degrees in social sciences, MBA diplomas, STEM PhDs, etc., an institutional bias that has created a structural over-supply of over-educated, under-skilled specialists, a labor pool that doesn’t align with the actual needs of real-world employers.

    Averages and medians tell us very little about real-world labor markets. There are hundreds of extraordinarily diverse labor markets in the U.S. economy, and it takes a much more granulated approach to make any sense of this highly fragmented and dynamic marketplace.

    Of related interest:

    Career Advice to 20-Somethings: Create Value as a Mobile Creative

    *  *  *

    My new book Money and Work Unchained is $9.95 for the Kindle ebook and $20 for the print edition. Read the first section for free in PDF format. If you found value in this content, please join me in seeking solutions by becoming a $1/month patron of my work via patreon.com.

  • "They're Finally Accepting Reality" – Manhattan Landlords Are Slashing Rents To Fill Vacant Storefronts

    Owners of Manhattan’s commercial real-estate might soon begin to regret their decision to hike rents to absurdly high levels in the hope of attracting the next Chase, Bank of America or Duane Reade capable of paying their extortionate prices.

    As Bloomberg reports, owners of prime retail storefronts in the heart of Soho – a trendy shopping district in downtown Manhattan – are struggling to find and retain tenants willing to pay the record rents being demanded by landlords.

    BBG

    The Bloomberg story begins by recounting the story of one boutique clothing shop that threatened to vacate its space six years early and just eat its security deposit unless the landlord agreed to a lower rate.

    The Kooples, a French clothing seller, is threatening to vacate its space six years ahead of schedule if it can’t get landlord Thor Equities to cut the rent. With brick-and-mortar stores suffering from a retail industry shakeout, the company says it isn’t making enough money at the property and wants to focus on the web.

    The scene unfolding on the cobblestones of one of New York’s trendiest shopping areas shows the increasingly fraught negotiations between tenants and landlords as vacancies soar and retail rents plunge. Similar scenarios are playing out along Madison Avenue to the north and along other thoroughfares in the city that have long been a draw for those shopping for designer clothing and other luxury goods. Property owners are confronting demands once unheard of in Manhattan, from rent reductions to short-term leases.

    Again and again, we’ve pointed to the stagnant deals and rents in some of Manhattan’s wealthiest and most expensive areas as a sign that the New York real-estate market is heading for a downturn after years of torrid growth in the valuations of residential and commercial real-estate.

    Manhattan

    According to Bloomberg, after a lull in leasings, landlords are beginning to accept their new reality, according to Patrick Smith, a vice chairman of the retail brokerage at Jones Lang LaSalle Inc. It no longer makes sense to keep rents so high in the hopes of landing one of the few corporate clients willing to pay.

    Indeed, “landlords are adjusting the way they do business to market conditions,” Smith said. “It’s healthy. It certainly has stimulated activity.”

    Of course, outside of Manhattan, many landlords are struggling with an even more ominous problem: As more brick and mortar retailers close, malls and other commercial storefronts are struggling to find somebody – anybody – who would be willing to fill their vacant spaces.

    CHart

    As a result, American malls are being forced to close, or suffer the indignity that accompanies having so many vacant storefronts.

    In Manhattan, home to some of the most valuable retail real estate in the world, a sharp rise in rents following the recession exacerbated the problem, with property owners clinging to unrealistic income expectations. Today, the glut of empty space is taking a toll, pushing landlords to make concessions to plug holes.

    Some are signing shorter-term leases to draw tenants that may be reluctant to make long-term commitments. In Soho, Hermes is negotiating a deal at 63 Greene St. that gives the retailer the option to leave after one year, while a few blocks over at 375 West Broadway, Gucci signed a lease that allows it to vacate the space if sales don’t meet expectations after two years, according to people familiar with the deals, who asked not to be identified because terms are private.

    Historically, a typical lease term in New York was between 10 and 15 years.

    Representatives for Gucci and Hermes didn’t respond to emails seeking comment.

    “Landlords, more today than in the past, are coming around to the retailer’s mentality,” said Steve Soutendijk, an executive director at Cushman. Both sides are making calculations on store sales “and how much can they pay in rent. If a store is unprofitable for them, it doesn’t make sense to keep it open.”

    To be sure, these issues aren’t confined to downtown – it’s a problem that’s beginning to manifest throughout Manhattan and even in some trendy outer-borough neighborhoods.

    Downtown landlords aren’t the only ones caving. On a tony corridor of Madison Avenue on the Upper East Side, an 18,000-square-foot (1,670-square meter) stretch of luxury retail is facing vacancies. Landlord Vornado Realty Trust doesn’t expect tenants including Gucci and Cartier to sign long-term renewals to leases that expire in September given market conditions, according to mortgage documents tied to the property. It’s offering short-term agreements at lower rates to keep the space occupied, the documents show. As of last month, no deals had been struck.

    Vornado, which recently paid off its mortgage at the property, declined to comment.

    “Landlords have to be open-minded,” said Robert Cohen, a vice chairman at retail brokerage RKF.

    In Soho, retail rents in the area have since plunged, dropping 17 percent in the past year to an average of $440 a square foot, the largest decline in all of Manhattan, according to the latest data from Cushman. But across the city, the number of new leases is falling and landlords in both retail and commercial are offering more rent concessions than they have in years.

    This might soon translate to a crash in the number of real-estate deals, mirroring a dire situation that’s playing out across the country, as high prices and a paucity of supply caused pending home sales to crash the most since 2010 in January.

Digest powered by RSS Digest

Feb 28

Today’s News 28th February 2018

  • "They Were Building An Escape Route" – Kim Family Used Fake Brazilian Passports To Apply For Western Visas

    It’s been widely suspected for decades that North Korea’s political elite – including members of the ruling Kim family – would obtain Western visas under false pretenses, but for the first time, Reuters has published images of a fraudulently obtained Brazilian passports that North Korean leader Kim Jong Un used to apply for visas to visit western countries.

    Over the years, specific details about the Kim family’s strategy for covertly traveling abroad have proven elusive – until now. Previously, images of a fraudulent Dominican Republic passport belonging to Kim Jong Nam, the half-brother of Kim Jong Un who was assassinated two years ago, surfaced after his death…

    Nam

     

    Reuters published a photocopy of Kim Jong Un’s passport…

    NK

    Brazil’s foreign ministry said it was investigating.

    A Brazilian source, who spoke on condition of anonymity, said the two passports in question were legitimate documents when sent out as blanks for consulates to issue.

    Unnamed Western security officials say the passports reveal the ruling family’s preparations for a possible “escape route” should they ever lose their grip on power.

    “They used these Brazilian passports, which clearly show the photographs of Kim Jong Un and Kim Jong Il, to attempt to obtain visas from foreign embassies,” one senior Western security source said on condition of anonymity.

    “This shows the desire for travel and points to the ruling family’s attempts to build a possible escape route,” the security source said.

    Four other senior Western European security sources told Reuters that the two Brazilian passports with photos of the Kims in the names of Josef Pwag and Ijong Tchoi were used to apply for visas in at least two Western countries.

    Though it’s unclear whether any visas were actually issued. The passports may have been used to travel to Brazil, Japan and Hong Kong. A Japanese newspaper reported in 2011 that KJU visited Tokyo in 1991 – when he was still a child – using a Brazilian passport, which is before the issue date on the two Brazilian passports obtained by Reuters.

    Both passports, which were good for 10 years, were stamped with “Embassy of Brazil in Prague” with a Feb. 26, 1996, issue date. Facial recognition technology has reportedly confirmed the photographs were those of Kim Jong Un and his father.

    So little is known about KJU that even the date of his birth is disputed. The passport issued for him in the name of Josef Pwag had a Feb. 1, 1983 date of birth. If that’s an accurate birth date, that would mean Kim is 35. KJU is known to have been educated at an international school in Berne, Switzerland, where he reportedly pretended to be the son of an embassy chauffeur.

    Kim Jong Il’s passport was issued in the name Ijong Tchoi, with a birth date of April 4, 1940. Kim Jong Il died in 2011. His actual birth date was in 1941. Both passports list the birthplaces of the two men as Sao Paulo, Brazil.

    Reuters was unable to confirm that the passports hadn’t been tampered with.

  • What Civil Unrest Is Really Like: We Survived The Ferguson Riots

    Authored by Karen Morris via The Organic prepper blog,

    When I mention the year 2014 do any events stand out in your mind?  Some of you may think of births of family members or special anniversaries or incredible vacations that you took.  You know the kind,  the ones you wish you could take every year because they were just that amazing?  Yeah, I love those too.

    But when I think of 2014, two things come to mind. Let’s start with the second event.

    We moved (usually a fun thing) in November of 2014.

    But the reason we moved was because of another event that began in August of 2014 and continued through the end of 2014 and beyond.   The first thing that I will always think of when I hear, “the year 2014” are the images of destruction from my town of Ferguson, Missouri – images of the riots that we saw and experienced first hand while driving down streets where ruin ran rampant (say that five times fast).

    Businesses were destroyed.  Personal property was demolished. It wasn’t even safe to leave your house depending on where in Ferguson you lived.

    Some Background Details

    We considered moving to Ferguson in the fall of 2001.  We were expecting twins and decided to buy a house in an affordable suburb of St. Louis.  We had friends who lived in the area, and they liked it.  What greater reference to the quality of the community than someone who already lives there, right?  We found a great starter house on the corner of two of Ferguson’s four main streets.

    The house we chose to purchase had a small backyard, a decent sized front yard, and room for the two children we were expecting at the time to play.  We purchased the house in December of 2001 and lived there between 2001 and 2014.  We had our twins the following summer, and over the years, we added three more children to our family.  In August of 2014, our children’s ages were 12, 12, 8,7, and 3.

    How It All Started

    We pulled into our driveway on the afternoon of August 10, 2014, having just gotten back from a trip out of town.  After tucking the kids into bed, I got some things in order and started working on a project at my desk when a friend of mine messaged me asking if I was all right.  Okay, that was a rather odd question out of the blue.  I told her I was fine and asked her why she was asking.  She told me that there were riots going on in Ferguson.

    That one sentence changed the course of my life – literally.

    I knew my friend, and I trusted her.  But you know that feeling…the one that says, “It can’t be as bad as she’s making it out to be.”   Yeah, it’s real, and it’s called normalcy bias.  According to Wikipedia (which I’ve been told never to quote):

    “Normalcy bias is a belief people hold when facing a disaster. It causes people to underestimate both the likelihood of a disaster and its possible effects, because people believe that things will always function the way things normally have functioned.” (source)

    I didn’t know it at the time, but that was exactly what was going on in my head – it can’t be THAT bad because nothing like this had ever happened to me before.   BUT since I knew she wouldn’t lie to me, I opened a new tab on my browser and started looking up “Riots in Ferguson.”

    One of the local news stations was running live coverage on their website.  I watched for a moment.  Then I called my husband over, and both of us watched, aghast at what we were seeing.  There was a wall of police and a mass of rioters.   As we watched and listened online we saw and heard screaming and yelling, threatening gestures, profanities being hurled. I saw one side moved forward and the other side moved back.  Then both groups shifted toward either the left or the right.  It was almost like watching a sinister dance.  But this was a dance that took a dark turn fast.

    That night things got out of control.  Businesses were burned stores were looted, most of them were still about a mile away from us.  We watched and we were saddened, but there was no reason to believe that but the events were going to get closer to us.  We were safe, right?

    Yeah, there was that normalcy bias again.

    I’m putting a picture from Google maps in here to show you where things were happening and where we lived.

    You’ll notice three main North/South streets, West Florissant (this is the street right off of which Michael Brown was shot and where the riots started), Elizabeth (the street we lived on) and N. Florissant (the west most of the main North/South streets).  The main East/West street that you see had several different names, Chambers and Hereford are two shown on the map.

    Our house was on the corner of Chambers and Elizabeth.

    Despite what happened during the night, during the next day, things felt rather normal.  The sun was shining, kids were walking to the school across the corner from our house, cars were driving by where we lived just like usual.  But it was an uneasy, eerie feeling.  It was like the calm that occurs when the eye of a hurricane passes over you and the sun comes out like life is happy and normal and there’s nothing to worry about until the second half of the hurricane hits you.

    But of course, night follows day.   And with the next night, there was more unrest.  Again, thankfully, it was mostly contained about a mile from us.

    The riots didn’t stop.

    This cycle of fairly calm days and vicious nights continued the next few days.  By Wednesday, we had seen that this wasn’t going to go away quickly.  The protests seemed to be growing each evening – at least a little.  So Thursday, I packed several suitcases and put them in the back of the van – where they stayed.  Bug Out Bags are okay, but if you know there’s a good chance you’re going to have to leave for a few days (or permanently if our house was burned) it’s better to have three changes of clothes and night clothes for each person than to have just one.

    The question started growing in our minds.  When do we leave?  We knew our family needed to be protected, but how close to our house is too close?  I’ve read articles where people talk about ‘buggin out’ like there is that one right moment to bug out.  Anything before that is just worry.  Anything after that is foolishness.

    There is no cut and dried “perfect time to leave” while you are living in a dangerous situation.  The struggle is a real.  You don’t want to leave too soon and foolishly waste resources or overtake friend’s houses unnecessarily.  On the other hand, you don’t want to get caught in the middle of the turmoil and not be able to make it out with your family.  The truth is there is no way to know when it is the exact right time to leave until after that moment happens.

    We waited, wondered if we should leave, and watched.  Friday night though, we had a lot more to watch.  That night the riots broke out in the area of Ferguson in which they had previously been contained.  Rioting, looting, and burning spread all the way from the area in which it started north almost two miles to the highway.

    It also spread across the city over to New Florissant road.  Our Walgreens, Little Caesars, and Shop & Save (our grocery store) were all on different corners of the intersection of West Florissant and Chambers/Hereford.  They were only about one quarter to one half a mile from our house.  All of them were looted.

    Again, we felt that torn feeling.  Do we stay or do we leave at 1 am? Do we wake up the kids and wake up our friends?  My parents also lived in Ferguson, so it’s not like we could go to their house for a few nights to escape the turmoil.  We hated to be a burden on friends outside the area.  I know it sounds silly.  Our friends would have been happy to put us up, but that really does weigh on your decision.  Going to a hotel wasn’t really an option.  That cost a lot of money that at the time we didn’t have.

    We stayed that night and didn’t sleep much.  As the next day dawned though, we witnessed the destruction.

    Then everything changed.

    There was something else that was evident the next morning too.  Now that the riots had turned more violent and moved to the other side of our house, I had lost my sense of security.  That might sound like a “DUH,” moment, but until something like this happens, it’s hard to realize just how deep your sense of security had been and just how much is now gone.  It was that ‘normalcy bias’ that I talked about earlier.  It was then that I realized things weren’t going to get better quickly.

    With our sense of security gone, practical things changed for us. we could no longer sit out on our porch swing.  Our children weren’t allowed outside.  The blinds were kept pulled all day long.  We didn’t leave the house unless we absolutely had to.  At night we could literally smell the tear gas that was being hurled at people.

    On the night of Monday, August 18th, everything exploded again.  Hundreds of protesters gathered in Ferguson.  Rioters threw bottles at police before the group charged the officers.  Almost 100 people were arrested that night.  The next morning, we called our friends, loaded our children into the car and decided that it was time for us to leave for a few days.

    We spent three days with friends about thirty minutes from Ferguson as things continued. After three nights of being away, when Governor Nixon recalled the national guard from Ferguson, we found that our house was still standing and there was no physical damage to the property. We decided we really needed to return home.

    Things would never be the same.

    Upon our return, our attitude changed further.  It’s amazing the things you take for granted like the stores at which you shop.  I stopped shopping at my usual stores because I didn’t want to shop in the area.  I would travel five to eight miles out of town to go to a store when it had a counterpart less than a mile from me.

    We found a park near my husband’s work and ate lunch with him and to let the kids play because they weren’t going to play outside at home.  We did what we could to give the kids a sense of normalcy since we were living in this nightmare for months on end.

    The atmosphere during the following days continued to change as well.  Gunshots in the streets became more frequent.  We had heard them on occasion over the previous thirteen years that we had lived there, but NEVER like we heard after August 9th. There were fewer kids walking to school.  Police sirens were heard crossing our corner almost hourly.

    It was about this time that my husband and I began to talk about relocating.  We had been casually talking about the possibility of a job with a company located in central Illinois.  We decided that this was the time to get more pointed and committed to the discussion with them.  We didn’t know how we were going to sell a house in the middle of a zone torn by riots, but we knew we couldn’t continue living this way with five children.

    The unrest went on far longer than most people realized.

    What might surprise many readers is that the riots really lasted a LONG time for us.  There was unrest almost every night for months.

    One night, I had to be out teaching a class.  When I came home, the kids all told me about how the protesters had walked from the Memorial on West Florissant north to Chambers/Hereford where they turned west, and then when they reached North (New) Florissant, they turned south and went to the police station.  This took them right by our front yard.  As a matter of fact, the crowd was so big that there were some who overflowed into our yard.  The police had a helicopter with its searchlight/spotlight pointed into our front yard to watch the protesters at one point.  It was a sensational event for a couple of my children, but it really frightened several of my children.

    Some of our children started to exhibit signs of emotional trauma.  Incidents of bed-wetting increased, and our youngest child even refused to sleep in a bed by himself.  We had children that were frightened to go out to the car if it wasn’t in the garage.

    Between August and October, when we were home, we lived exclusively indoors.  We continued to take multiple trips each week to parks near my husband’s work.  The kids would play, and my husband would join us for lunch.  We had a library that we loved to go to where the kids didn’t have to worry about whispering.  We went there at least once a week.  It was hard helping the kids find a sense of normal in the midst of daily turmoil.  They had seen some very frightening events first hand.

    But time continued on.  Despite the fact that there was still unrest almost every night, television stations stopped broadcasting about the riots.  Everyone was tired of hearing of hearing about them, so all of a sudden, in the media, it was like the riots didn’t exist

    But they did for us.

    By this time our house was on the market (of course without a prospect on the horizon).  We were getting close to a job deal with the company in central Illinois.  Moving was starting to look like a real possibility.

    Once we reached October, there was a whole month of activities planned by activists called, “Ferguson, October.”  Fortunately, the events of “Ferguson October” were listed online.  When we were checking it out, we saw that there was going to be a big event in Ferguson in for an entire weekend.  Again, we were torn, but we didn’t need our children to be subjected to any more of the violence, so we decided to pack up and leave the town for the weekend.  We stayed with some friends in Illinois.   Not much came of that weekend, though.

    We finally relocated.

    Eventually, despite my husband’s well-paying, secure job in St. Peters, Missouri, we moved from Ferguson to a small city in central Illinois in November.  November actually ended up having the worst violence of our whole time in Ferguson.

    We planned on leaving Ferguson on November 20th, but on November 17th, Governor Nixon declared a state of emergency in anticipation of the verdict in the case of the police officer who shot Michael Brown.  No matter what the outcome, violence was anticipated.

    When we heard that, we left.  We packed up our belongings on November 18th and drove to a friend’s house in central Illinois.  We wouldn’t be taking possession of our rental house until November 20th, but all indications were that things were going to get out of hand.  Yeah.  That was the understatement of the year – and considering the year we had, that says something!

    The verdict of not guilty came out of November 24th and carnage ensued.

    Shops that had been looted before were now burned.  Shops we had used for years on end were gone never to be rebuilt – or at least not rebuilt as the businesses they were in the past.  There had been an attempt at a deal between the city of Ferguson to bring in a CVS drug store. With everything that happened, CVS refused to move into the neighborhood.  Other stores which hadn’t been destroyed pulled out as well.

    We still had to come back to finish cleaning out our house in the hopes of selling it.  We saw the devastation first hand again.

    This event affected us permanently.

    While we missed our house and our neighborhood, we would have missed it even if we had stayed.  I have friends who still live in Ferguson and they’ve told me that there is still violence from time to time and that it doesn’t have the same atmosphere as before the riots.

    When we moved, our salary was greatly diminished and our expenses were higher, but our children were able to play outside again.  It took years for our house to sell and we took an enormous loss. They were able to climb trees in our own yard again.  We rarely heard sirens anymore.  In many ways, my children were able to bounce back.  It was worth every bit the cost of moving and more.

    Even now though, four years later, from time to time I still notice residual actions or insecurities that I believe were brought on by what we lived through in Ferguson.  Those events changed each of us.  They made us a little more streetwise.  They brought us a little more sense of awareness around us.

    What we learned

    So if I could leave you with a few takeaways, they would be these:

    • Don’t think it could NEVER happen to you.  We lived in a small town surrounded by wonderful people.  I would never have dreamed in my wildest nightmares that we’d be enveloped in civil unrest of any magnitude, let alone that magnitude.

    • Being ready for the unexpected is a MUST! I have a friend who asked me why in the world she should keep items together (like a BOB or Grab-and-GO bag) in case they had to evacuate.  Sure she lives on the Florida peninsula, but they always have some notice before a hurricane, right?  This is why.  You never know when you literally have five minutes to be out of the house before unrest of one sort or another reaches you.

    • Learn to use social media to your advantage. During the whole situation, Twitter was our best friend.  We would stalk Twitter and more specifically #Ferguson on Twitter.  What we saw either could keep us in our house or evacuate us at a moment’s notice.  If we needed to leave the house, we always checked #Ferguson on Twitter.  We would be able to see where the protests were and which was the safest way out of the city.

    • Having items that you keep in your car all the time is VERY helpful in case you ever need to leave quickly. We keep various tools, foods, drinks, first aid kits and more in our family vehicle.  You never know when having them in your car is the difference between you having something and you having nothing.

    • Watch for the effects that stressful situations may be having on your children. Learn to notice the differences and do what you can to mitigate what they are going through.  If you can’t actually stop what they are going through, then do what you can to help them have a sense of normalcy in the midst of it.  For us, routines helped.  It was also helpful to learn where we could go that was safe so that our children could get out their energy.  Extra time with parents and extra snuggle time with those children who need it is also vital.

    I want to leave you with one final thought.

    Earlier I mentioned normalcy bias.  Ya know what?  You most likely have that, even if you’re a prepper.  By the time the Ferguson Riots hit, I was a prepper – maybe not a very good one – but a prepper nonetheless.  Yeah, I was prepping for some unnamed event out in the future that MIGHT happen to me, but when it did happen to me, in many ways it still didn’t seem real.

    There’s another part of Wikipedia’s definition I didn’t mention before,

    “This [normalcy bias] may result in situations where people fail to adequately prepare themselves for disasters.”  (source)

    Don’t be that person.  Don’t be that person who doesn’t prepare for anything because they think that everything is just going to be the same as it always was.  Don’t be the person who lives in denial of a terrible event ever happening to them.

    It can happen to you, and it might happen to you.

    I never dreamed that my family would have to face having our home severely damaged by a tornado, or that we’d live through the Ferguson riots, or even that we’d be attacked by a knife-wielding teenager bent on killing everyone at our chess club.  We didn’t plan for any of that to happen to us, but it did.

    Learn, practice, and prepare yourselves mentally as well as physically, so that if a life-altering event happens to you, you can face it and come through the other side more wise and capable than when you went in.

  • "It's Not Safe Here" – Activists Warn Illegal Immigrants To Avoid Florida As ICE Arrests Surge

    Following the unveiling of a new partnership between ICE and local sheriffs departments, a coalition of nearly two dozen Florida-based activist groups has issued a travel warning to all black and brown people – especially illegal aliens – to take “great caution” while visiting the sunshine state.

    Florida, according to the group, saw the biggest jump in ICE apprehensions in 2017.

    Illegal aliens should take extra care when traveling through transportation hubs like Greyhound bus station and airports.

    According to PJMedia, these groups have staged events across the state to spread the word to illegal immigrants who are thinking about vacationing in Florida during Spring Break. They’re also posting information on which areas to avoid as 17 sheriffs across the state have agreed to cooperate with Immigration and Customs Enforcement – a partnership that has been challenged by the American Civil Liberties Union.

    Illegal immigrants should “reconsider visiting Florida and especially recommended to avoid high-risk areas, including ports, airports, and Greyhound stations.”

    ICE immigration arrests during Obama’s presidency dropped from 297,898 to 110,104. That number has already rebounded to 143,470 under President Trump.

    “We are taking the step of warning our communities that as the Florida lawmakers, state, local and federal do not take steps to push back against the anti-immigrant policies, we do not feel like our communities are safe in the state,” Tomas Kennedy, deputy political director at the Florida Immigrant Coalition, said.

    Federal law enforcement has been tightening security in the 100-mile zone near all borders and coasts, leading to a significant increase in arrests. Since Trump was elected in 2016, immigration arrests in Florida have climbed by 76%. Texas and Oklahoma have also seen sharp increases in detentions as well, with Dallas posting the highest number of arrests in 2017, while Houston and Atlanta weren’t far behind.

    Illegals

    Even though Trump’s executive order expands law enforcement’s focus to include illegal immigrants without a criminal history, nearly 75% of immigrants arrested last year had prior convictions.

    The most common crimes committed by illegal immigrants last year included driving under the influence – 16% – and possessing or selling dangerous drugs like opioids – 15%. The most common pending criminal charges were general traffic offenses – 17% – driving under the influence of alcohol – 14% – having or selling drugs – 13% – and immigration violations – 7%.

    It’s impossible to compare 2017 data with earlier years because ICE only recently started collecting and reporting detailed information on the criminality of those arrested.

    Over the weekend, the highlighted a warning issued by Oakland Mayor Libby Schaaf, who undermined the Trump administration, by broadcasting a warning to all Bay Area residents that a massive coordinated ICE crackdown would be starting “within the next 24 hours.”

  • Armed And Dangerous: If Police Don't Have To Protect The Public, What Good Are They?

    Authored by John Whitehead via The Rutherford Institute,

    In the American police state, police have a tendency to shoot first and ask questions later.

    In fact, police don’t usually need much incentive to shoot and kill members of the public.

    Police have shot and killed Americans of all ages—many of them unarmed—for standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety.

    So when police in Florida had to deal with a 19-year-old embarking on a shooting rampage inside Marjory Stoneman Douglas High School in Parkland, Fla., what did they do?

    Nothing.

    There were four armed police officers, including one cop who was assigned to the school as a resource officer, on campus during that shooting. All four cops stayed outside the school with their weapons drawn (three of them hid behind their police cars).

    Not a single one of those cops, armed with deadly weapons and trained for exactly such a dangerous scenario, entered the school to confront the shooter.

    Seventeen people, most of them teenagers, died while the cops opted not to intervene.

    Let that sink in a moment.

    Now before your outrage bubbles over, consider that the U.S. Supreme Court has repeatedly affirmed (most recently in 2005) that police have no constitutional duty to protect members of the public from harm.

    Yes, you read that correctly.

    According to the U.S. Supreme Court, police have no duty, moral or otherwise, to help those in trouble, protect individuals from danger, or risk their own lives to save “we the people.”

    In other words, you can be outraged that cops in Florida did nothing to stop the school shooter, but technically, it wasn’t part of their job description.

    This begs the question: if the police don’t have a duty to protect the public, what are we paying them for? And who exactly do they serve if not you and me?

    Why do we have more than a million cops on the taxpayer-funded payroll in this country whose jobs do not entail protecting our safety, maintaining the peace in our communities, and upholding our liberties?

    Why do we have more than a million cops who have been fitted out in the trappings of war, drilled in the deadly art of combat, and trained to look upon “every individual they interact with as an armed threat and every situation as a deadly force encounter in the making?

    I’ll tell you why.

    It’s the same reason why the Trump Administration has made a concerted effort to expand the police state’s power to search, strip, seize, raid, steal from, arrest and jail Americans for any infraction, no matter how insignificant.

    This is no longer a government “of the people, by the people, for the people.”

    It is fast becoming a government “of the rich, by the elite, for the corporations,” and its rise to power is predicated on shackling the American taxpayer to a life of indentured servitude.

    Cops in America may get paid by the citizenry, but they don’t work for us.

    They don’t answer to us. They’re not loyal to us.

    And they certainly aren’t operating within the limits of the U.S. Constitution.

    That “thin, blue line” of loyalty to one’s fellow cops has become a self-serving apparatus that sees nothing wrong with advancing the notion that the lives—and rights—of police should be valued more than citizens.

    The myth of the hero cop really is a myth.

    Cops are no more noble, no more self-sacrificing, no braver and certainly no more deserving of special attention or treatment than any other American citizen.

    This misplaced patriotism about police and, by extension, the military—a dangerous re-shifting of the nation’s priorities that has been reinforced by President Trump with his unnerving knack for echoing past authoritarian tactics—paves the way for even more instability in the nation.

    Welcome to the American police state, funded by Corporate America, policed by the military industrial complex, and empowered by politicians whose primary purpose is to remain in office.

    It’s a short hop, skip and a jump from the police state we’re operating under right now to a full-blown totalitarian regime ruled with the iron fist of martial law.

    The groundwork has already been laid.

    The events of recent years have only served to desensitize the nation to violence, acclimate them to a militarized police presence in their communities, and persuade them that there is nothing they can do to alter the seemingly hopeless trajectory of the nation.

    The sight of police clad in body armor and gas masks, wielding semiautomatic rifles and escorting an armored vehicle through a crowded street, a scene likened to “a military patrol through a hostile city,” no longer causes alarm among the general populace.

    Few seem to care about the government’s endless wars abroad that leave communities shattered, families devastated and our national security at greater risk of blowback. Indeed, there were no protests in the streets after U.S. military forces carried out air strikes on a Syrian settlement, killing 25 people, more than half of which were women and children.

    And then there’s President Trump’s plans for a military parade on Veterans Day (costing between $10 million and $30 million) to showcase the nation’s military might. Other countries that feel the need to flex their military muscles to its citizens and the rest of the world include France, China, Russia and North Korea. 

    The question is no longer whether the U.S. government will be preyed upon and taken over by the military industrial complex. That’s a done deal.

    It’s astounding how convenient we’ve made it for the government to lock down the nation.

    Mind you, by “government,” I’m not referring to the highly partisan, two-party bureaucracy of the Republicans and Democrats.

    As I point out in my book Battlefield America: The War on the American People, I’m referring to “government” with a capital “G,” the entrenched Deep State that is unaffected by elections, unaltered by populist movements, and has set itself beyond the reach of the law.

    I’m referring to the corporatized, militarized, entrenched bureaucracy that is fully operational and staffed by unelected officials who are, in essence, running the country and calling the shots in Washington DC, no matter who sits in the White House.

    This is the hidden face of a government that has no respect for the freedom of its citizenry.

  • Comey's FBI Was A Hotbed Of Sexual Misconduct: Official Report

    The Department of Justice’s internal watchdog sanctioned at least 14 FBI agents and officials over the last five years – most of which occurred under Former FBI Director James Comey’s leadership, reports Richard Pollock of the Daily Caller – which has reviewed documents from the agency’s Inspector General, Michael Horowitz.

    The acts entail inappropriate romantic relationships with a subordinate, outright sexual harassment, favoritism or promotion based on demands for sex, and retaliation against women who rebuffed male employee’s advances. –Daily Caller

    Prior to Comey’s tenure as Director which began in September 2013, no sexual misconduct charges had been filed by the Office of the Inspector General (OIG). Most recently, an extramarital relationship between FBI employees Peter Strzok and Lisa Page was revealed during Congressional investigations into the FBI, which had been uncovered by Horowitz through a search of text messages between the two agents.

    Perhaps the most shocking revelation, however, is that Comey attempted to thwart Horowitz’s investigation. 

    As Horowitz explained in his March 2015 final report on how law enforcement agencies handle sexual-misconduct complaints, his office’s ability “to conduct this review was significantly impacted and delayed by the repeated difficulties we had in obtaining relevant information from both the FBI and DEA as we were initiating this review in mid-2013.”

    After pulling teeth to try and obtain records from the FBI, Horowitz was finally presented with unredacted information that satisfied his requests – however it was “still incomplete.” 

    Of note, Obama’s Attorney General Loretta Lynch and Comey fought Horowitz’s investigation into sexual misconduct charges.

    Lynch supported Comey’s defiance of the IG via a July 20, 2015, memo from DOJ Office of Legal Counsel principal-deputy AG Karl Thompson. Thompson charged law enforcement agencies could redact information in its files and withhold information from the Inspector General. It was one of her first acts as Obama’s new Attorney General, who was sworn in to office on April 27, 2015. –DC

    It was only after a multi-year battle with the Obama administration that Horowitz was finally able to obtain the information he sought after Congress passed the Inspector General Empowerment Act of 2016, restoring his office’s ability to access information without having to ask for it first. 

    Of note, Horowitz’s report on FBI malfeasance during the 2016 election is due out in several weeks – which many think will provide official confirmation that the top ranks of the FBI and DOJ engaged in a highly politicized hit-job on President Trump and his team in an effort to elect Hillary Clinton while undermining Trump. 

      Who is Michael Horowitz? 

      As we detailed in January, Horowitz was appointed head of the Office of the Inspector General (OIG) in April, 2012 – after the Obama administration hobbled the OIG’s investigative powers in 2011 amid the “Fast and Furious” scandal. The changes forced the various Inspectors General for all government agencies to request information while conducting investigations, as opposed to the authority to demand it. This allowed Holder (and other agency heads) to bog down OIG requests in bureaucratic red tape, and in some cases, deny them outright. 

      What did Horowitz do? As one twitter commentator puts it, he went to war…

      In March of 2015, Horowitz’s office prepared a report for Congress  titled Open and Unimplemented IG Recommendations. It laid the Obama Admin bare before Congress – illustrating among other things how the administration was wasting tens-of-billions of dollars by ignoring the recommendations made by the OIG.

      After several attempts by congress to restore the OIG’s investigative powers, Rep. Jason Chaffetz successfully introduced H.R.6450 – the Inspector General Empowerment Act of 2016 – signed by a defeated lame duck President Obama into law on December 16th, 2016, cementing an alliance between Horrowitz and both houses of Congress. 

      1) Due to the Inspector General Empowerment Act of 2016, the OIG has access to all of the information that the target agency possesses. This not only includes their internal documentation and data, but also that which the agency externally collected and documented.

      TrumpSoldier (@DaveNYviii) January 3, 2018

      See here for a complete overview of the OIG’s new and restored powers. And while the public won’t get to see classified details of the OIG report, Mr. Horowitz is also big on public disclosure: 

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

      Horowitz’s efforts to roll back Eric Holder’s restrictions on the OIG sealed the working relationship between Congress and the Inspector General’s ofice, and they most certainly appear to be on the same page. Moreover, brand new FBI Director Christopher Wray seems to be on the same page as well. Click here and keep scrolling for that and more insight into what’s going on behind the scenes. 

      Once congress has reviewed the OIG report on the FBI’s conduct during the 2016 election, the House and Senate Judiciary Committees will use it to supplement their investigations, which will result in hearings with the end goal of requesting or demanding a Special Counsel investigation. The DOJ can appoint a Special Counsel at any point, or wait for Congress to demand one. If a request for a Special Counsel is ignored, Congress can pass legislation to force an the appointment. 

      And while the DOJ could act on the OIG report and investigate / prosecute themselves without a Special Counsel, it is highly unlikely that Congress would stand for that given the subjects of the investigation. 

      As TrumpSoldier points out in his analysis, the DOJ can take various actions regarding “Policy, personnel, procedures, and re-opening of investigations. In short, just about everything (Immunity agreements can also be rescinded).” 

      Back to the topic at hand, here are the 14 cases of sexual misconduct within the bureau, via the Daily Caller:

      • Tuesday the IG found that a special agent in charge (SAC) of an FBI field office, had an “inappropriate romantic relationship” with a subordinate who also was married. The SAC was married and had a young child at home, according to a source knowledgeable of the case.
      • On June 3, 2016, a  SAC retired after it was disclosed he accepted free rent and lived at the residence of a subordinate FBI special agent in violation of the Standards of Ethical Conduct for Employees of the Executive Branch, which prohibits an employee from accepting a gift from a subordinate who receives less pay and is a violation of the FBI Code of Conduct policy.
      • In August 2015, the IG reported that an FBI assistant SAC (ASAC) was temporarily demoted because he made “inappropriate comments of a sexual nature towards employees and made inappropriate physical contact with employees.” The IG interviewed several witnesses “who told the OIG that they were either inappropriately touched or that they had inappropriate comments made to them by the ASAC. Other witnesses said they observed the ASAC engage in such conduct with the employees.” The ASAC denied the allegations, and stated “he did not recall” the specific incidents. “The OIG found the witnesses’ accounts to be consistent, credible, and corroborative of each other” and that he “lacked candor” in his interview.
      • In December 2014, an ASAC was disciplined for sexually harassing an FBI employee. He admitted to engaging in several acts of sexual harassment, including sending the employee an electronic communication containing sexual innuendo and making a sexually-oriented comment at a luncheon.
      • In December 2014, an ASAC was disciplined for making unwanted sexual advances to a special agent and later removing the special agent from his assignment for refusing those advances. He also allegedly selected a replacement for the special agent based on a personal relationship with the replacement. Although the IG investigation found “no evidence” the ASAC made supervisory decisions based solely on a personal relationship, the IG “found that the ASAC’s involvement in decisions benefitting the individual created an appearance of favoritism.”
      • In June 2014, the IG reported that an FBI program analyst was dismissed. While detailed to another federal agency, he arranged for sexual encounters using his work computer. The analyst also “admitted to arranging sexual encounters by using his personal e-mail account accessed through the other agency’s network on his work computer.”
      • In June 2014, an FBI Information Technology specialist and program manager resigned after making multiple unwanted sexual advances towards an FBI contract employee while intoxicated. When the contractor reported the incident to an FBI supervisor, the IT specialist allegedly “threatened to kick the contractor and retaliate against her at work.”
      • In January 2014, the FBI issued disciplinary action against an ASAC who had sexual relationships with and sexually harassed subordinates. He created “a hostile work environment” and disregarded his supervisor’s instruction to inform him if a relationship developed with his subordinate. The FBI determined the ASAC “sexually harassed other female subordinates, had inappropriate sexual contact with two other subordinates while on duty and retaliated against a female special agent after she refused to engage in a romantic relationship with him.”
      • In January 2014, the FBI demoted a SAC who “engaged in a protracted sexual relationship with a foreign national that he deliberately concealed from the FBI.” He also “disclosed sensitive information to the foreign national,” and allowed the foreign national to use FBI-issued iPads and an FBI-issued Blackberry phones on numerous occasions. He also exchanged sexually explicit communications on the Blackberry with the foreign national.
      • In January 2014, an FBI ASAC made “unwanted sexual advances” to an FBI special agent (SA). The ASAC removed the female agent for refusing those advances. “The ASAC was further alleged to have selected a replacement for the SA based on a personal relationship with the replacement.”
      • In November 2013, an FBI Deputy Assistant Director (DAD) resigned after it was determined he was involved in a personal relationship with a direct subordinate that resulted in favoritism. The two exchanged messages on their FBI-issued Blackberry devices. The DAD “failed to disclose the relationship and recuse herself from all official decisions regarding the subordinate, as required by FBI policy, and that the relationship created perceived instances of benefit or favoritism towards the subordinate, in violation of FBI policy.”
      • In May 2013, an ASAC voluntarily removed himself from his position and was reassigned to a GS-13 position for engaging in a relationship with a subordinate employee for a lengthy period that began before and continued after the his promotion to the ASAC position. The investigation also found that the ASAC “was insubordinate by willfully ignoring a former SAC’s instruction to terminate the relationship.”
      • In February 2013, an FBI ASAC was disciplined when he engaged in a relationship with a subordinate FBI employee for a lengthy period. The investigation also found the ASAC was insubordinate by willfully ignoring a former SAC’s instruction to terminate the relationship.
      • In January 2013, an ASAC engaged in romantic relationships with approximately 17 female FBI employees, nine of whom were direct subordinates, “creating a hostile work environment.” The investigation determined the ASAC “sexually harassed other female subordinates, had inappropriate sexual contact with two other subordinates while on duty, and retaliated against a female special agent after she refused to engage in a romantic relationship with him.

    • The Asymmetric Co-Dependence Between Bitcoin & Stocks

      Authored by Nicholas Colas via DataTrekResearch.com,

      Today we update our statistical work on the relationship between bitcoin’s price and the S&P 500.

       The notion that bitcoin is a “Stub” asset (the riskiest piece of a capital structure) in global capital markets is getting some traction lately. The idea, in a nutshell, is that crypto currencies are increasingly part of the financial mainstream (numerous haters notwithstanding) and their fortunes are inherently tied to the risk tolerances that support all assets.

      Higher price correlations should therefore follow, even if bitcoin remains a very volatile asset.

      Short-term price correlations (measured in 10 day rolling averages) during the recent selloff in US stocks absolutely exhibit a high degree of linkage, but we need to call out a few caveats as well:

      • The 10-day historical correlations between bitcoin and the S&P 500 reached 0.79 on February 6th, right in the middle of the sharp decline in US stocks. For those of you with a statistical bent, that is an R-squared (coefficient of determination, rather than correlation) of 62%. Not bad for a one-variable model, to be sure.

      • This 10-day measure also shows that the relationship between bitcoin and stocks declined rapidly in the days that followed. By February 21st they had turned negative. As of today, the correlation was just 0.37.

      • It is also worth noting that 10-day price return correlations between bitcoin and the S&P have been high several times in recent years, and long before it was widely followed by the financial press. Examples include: February 22, 2016 (0.77 correlation), July 14th 2016 (0.80), April 21st, 2017 (0.81), and September 8th (0.80).

      • Bottom line: high short-term correlations between bitcoin and stocks are nothing new. (And one word of explanation: financial services professionals typically refer to correlations in percentage terms, even though they are obviously an index between -1.0 and +1.0. We follow that convention in our other work, but we find that bitcoin gets a lot of attention from math/stats people who are real sticklers about percentages reflecting R-squared data. In deference to them, we use their convention in this note.)

      Now, over the longer term, there is a statistical story about bitcoin and US stocks being increasingly tethered to the same market appetite for risk. The data here:

      • We’ve included two charts below. One shows the 90-day correlation between the S&P 500 and bitcoin, the other highlights the correlation between US large cap Tech stocks (using the XLK exchange traded fund) and the crypto currency.

      • With this longer-term timeframe, you can see that bitcoin now shows a much higher correlation to US stocks than for much of the last 2 years (the graph starts in January 2016). The lift-off point was in August 2017 when bitcoin went from a history of almost complete non-correlation to a 0.10 correlation coefficient and (more recently) 0.25-0.30.

      • Statistically minded people will note that this translates only to a 6-9% R-squared. Markets people will look at the chart and say “the trend is not the friend” of considering bitcoin as a non-correlated asset going forward.

      • Since bitcoin is a technology as well as a crypto currency, a comparison between it and US large cap Tech stocks is also worth a look. The data shows essentially the same relationship between bitcoin and US stocks, although a modestly tighter fit during last Fall.

      The upshot here is twofold:

      • Bitcoin seems to track US stocks when they fall (witness earlier this month) more than when they rise. That makes sense to us. A sudden shift in risk tolerances pulls capital out of all risk assets. The same thing happened with gold during the Financial Crisis, when the yellow metal was down in 2008 along with everything else.

      • Over time, bitcoin’s price will be set not by equity prices but by its own fundamentals. The long run correlations show that well enough, and it makes intuitive sense as well.

    • Broward County Officials Opened 66 Investigations Of Misconduct Under Sheriff Israel

      The Broward County State Attorney’s office launched over 66 misconduct investigations by Sheriff’s deputies going back to 2012, reports Journalist and Fox News contributor Sara Carter.

      Many of the claims against officers – ranging from drug trafficking to kidnapping, happened under the watch of beleaguered Sheriff Scott Israel, whose office is now under investigation over allegations that his deputies failed to allow first responders to treat patients at Stoneman Douglas High School following the Feb. 14 massacre which left 17 dead, and that several deputies failed to enter the school to defend the children during the shooting – with reports of a “stand down” order emerging over the last 24 hours.

      Sheriff Israel in a Lamborghini

      Israel has defiantly pushed back against criticism, refusing to step down in the wake of what many believe to have been a preventable incident. 

      Over the weekend Israel fought back on calls for his resignation saying the actions of his deputies were “[not] his responsibility” when they failed to enter the high school that was under siege by Nikolas Cruz, 19. Police responded to calls regarding Cruz over 45 times over a seven-year period, although Israel disputes the report, stating his office only received 23 calls during that time frame.  The FBI also received a detailed call on Jan. 5,  warning that Cruz had posted disturbing images of slaughtered animals and comments on his Instagram saying he wanted to kill people, according to reports. The FBI stated on Feb. 16, that the tip was not forwarded to the FBI Miami Field Office. –Sara Carter

      Israel’s office under fire

      The existence of 66 BSO internal investigations came to light in a civil suit filed by the family of an African-American IT engineer, Jermaine McBean, who was killed in 2013 by Broward Sheriff’s deputies responding to a call that McBean was walking around with a weapon which turned out to be an unloaded air rifle resting on his shoulders, according to witnesses.

      The officer who shot him was indicted for homicide, which was later dismissed and is now under review by the state Supreme Court – however the shocking number of internal investigations into BSO deputies for a wide variety of criminal behavior has become extremely relevant in light of recent events.

      “Approximately 66 BSO (Broward Sheriff’s Office) deputies and other employees, including supervisory personnel were arrested for, charged with, and/or convicted of crimes that run the gamut from Armed Kidnapping, to Battery, Assault, Falsifying records, Official Misconduct, Narcotics trafficking, and other crimes involving dishonesty and violence in the years immediately proceeding 2013 when Jermaine was killed. Most of the offenses on the list occurred in the years 2012-2013,” according to court records filed against Israel and the Broward County Sheriff deputy defendants.

      “Often the cases against BSO (Broward Sheriff’s Office) employees are resolved by guilty pleas resulting in short or no period of incarceration and a chance for the criminal record to be cleared after a period of time.”

      Two months after McBean’s shooting, Sheriff Israel awarded two of the deputies the prestegious Broward Sheriff’s Office “Gold Cross Award,” however he later said they should have received them under mounting criticism. 

      Peter Pereza (middle)

      The deputy who shot McBean, Peter Peraza, was eventually suspended more than two years after the incident and indicted for homicide. A local judge dismissed the indictment on Florida’s “stand your ground” law in Aug 2017 – however the Florida Supreme Court has taken the case on review, vacating the court’s lower order.

      The criminal section of the Department of Justice’s civil right’s division now has an open investigation into McBean’s death, Schoen said. Israel is always shifting blame and the “buck never stops with him,” Schoen said. The most current Brady list has not yet been made available and those numbers are expected to increase, he added. –Sara Carter

      Florida’s Stand Your Ground law was ruled unconsititutional last July, as Miami-Dade Circuit Judge Milton Hirsch ruled that it allowed lawmakers to overstep their authorities – and that the state Supreme Court should have crafted the law in the first place. 

    • Indian Banks Face Crippling Credit Crunch As PNB Scandal Worsens

      The biggest financial fraud in India’s history just got bigger.

      On Monday, Punjab National Bank disclosed that a fraud previously believed to be $1.7 billion had swollen to $2 billion as the true extent of the fraud is still coming into focus.

      But the impact that this now-$2 billion fraud has had on the shares of PNB and other state-run Indian banks is having a wide-ranging impact across the country’s financial system, according to Bloomberg.

      Foreign banks, worried about the systemic lapses that the scandal has exposed, have become unwilling to lend money to smaller Indian firms – causing massive disruptions in trade finance. All of this pressure has hammered the Indian rupee, which is on track for its first monthly drop since September. This is largely because India’s economy, like the US, runs a trade deficit, and depends on capital inflows to function.

      PNB

      Foreign capital comes through foreign funds’ purchases of Indian stocks and bonds, local exporters’ sale of foreign-currency earnings and dollar loans from foreign banks. India is one of the world’s biggest users of trade funding worldwide, according to the ICC Global Survey 2017.

      The fraud was purportedly masterminded by Nirav Modi and his uncle Mehul Choksi, both of whom are on the run.

      The two men worked with a PNB employee named Gokulnath Shetty, who recently retired. Shetty would issue fraudulent letters of undertaking to help companies create by Choksi and Modi apply for loans through the foreign branches of other Indian banks. The fraud continued as, when it came time to repay the loans, Shetty would issue still more LoU’s to cover the balance.

      Citigroup Inc., Deutsche Bank AG, Standard Chartered Plc and HSBC Holdings Plc are among banks reducing exposure to these transactions, used by smaller companies to access short-term dollar funding, said people with knowledge of the matter. As questions are raised about the creditworthiness of guarantees from Indian state-run banks, rates have risen by as much as 0.5 percentage point for some types of financing, the people said, asking not to be identified as the details are private.

      Spokesmen in Mumbai for Deutsche Bank, HSBC and Citigroup declined to comment. “We continue to support our clients on transactions that meet our internal controls and standards,” a spokesman for Standard Chartered said by email.

      If doubts about the safety of Indian firms continue to grow, some firms may soon be forced to pay a full percentage point above Libor, compared with 0.5 percentage point before the PNB fraud was disclosed. As Bloomberg points out, the interlinked nature of global trade means trust is a crucial component of these transactions.

      BigBorrowers

      The one silver lining is that at least larger Indian companies, which have direct access to funding from foreign lenders and don’t rely on interim guarantees, haven’t been affected by the credit crunch.

      Possibly making matters worse, PNB has blamed other banks for negligence by failing to detect the fraud, though the fact that the bank’s internal controls weren’t connected to SWIFT – the international banking telecommunications system – making it much more difficult to detect the fraud.

      So the real question is: Will India’s banking regulators finally act to install meaningful controls? Or will the fallout from this short-term finance crunch continue to worsen until it blossoms into an acute capital-flight crisis.

    • The Future Of Adult Entertainment: Strippers Now Accept Bitcoin Via QR-Tattoos

      Welcome to the exciting new world of Bitcoin.

      A cryptocurrency strip club called ‘The Legends Room’ has become the first of its kind in Las Vegas, where strippers wear temporary QR tattoos as a wallet to process bitcoin payments. This new feature provides patrons and strippers with an anonymous, decentralized payment solution for transacting naughty services, usually bought with cash or credit cards — that often leaves a money trail.

      The cryptocurrency strip club opened in May 2017 by martial arts trainer Nick Blomgren, who dreamed up the scheme to use cryptocurrency payments so patrons can keep their visits secret from loved ones, said Las Vegas I-TEAM.

      “We came up with an idea probably about a year and a half ago of how we could turn this Bitcoin into something. So we were brainstorming. First, we were thinking about a fight company because I own a mixed martial arts gym. I was like well that would work better in a strip club. It’s the best place to spend it if you don’t want your wife to know or you don’t want your boyfriend to know,” said Blomgren.

      He added that cryptos could be the next big thing; “Some people had the dot.com era and if you didn’t jump on then, you missed the boat. Well, I don’t feel I missed the boat this time, I got on the ground floor of something that’s going to be huge.”

      Patrons who have a cryptocurrency wallet can directly scan the QR tattoos on the dancers’ body — they can also pay through traditional forms of payment i.e., cash or card.

      Blomgren offers a substantial perk for patrons who wish to transact cryptocurrency in his club, that is a 20 percent discount on all club services.

      Vanessa Murphy, an I-Team field reporter, had a fascinating conversation (documented below) with one stripper, who claims to have been in the crypto game for over 5-years. The stripper tells the reporter, “cryptocurrency may be the future for adult entertainment workers.”

      Vanessa Murphy, I-Team Reporter: “How often do customers want to pay with Bitcoin?”

      Brenna Sparks, adult entertainer: “Oh, quite often.  Like the people that come here, they are like really into crypto. I feel like it’s very smart. They are really into that.”

      The dancer whose stage name is Brenna Sparks, says she became interested in cryptocurrency when she was just 19 years old. She’s now 26 years old.

      “It’s peer to peer.  It’s anonymous, and it’s instant,” Sparks said.

      Sparks says she and her friends think cryptocurrency may be the future for adult entertainment workers.

      “I’m not going to name names, but there are certain banks that… will shut down your account and actually deny you from having an account because we work in the adult entertainment industry, said Summer Chase, adult entertainment worker.

      The club’s DJ, known as Saint Clare, says part of her deal at the Legends Room is that part of her paycheck is cryptocurrency.

      “When I first heard about the concept, I thought wow this is really something different, you know,” DJ Saint Clare said.

      Vanessa Murphy, I-Team Reporter: “Do you check your account a lot?”

      Brenna Sparks, adult entertainer: “I do (laughs).  It’s fun though. Once you invest, it becomes an everyday thing.”

      And lastly, The Legends Room has its own cryptocurrency called LGD issued on Ethereum platform.

      “In the beginning, it was like a lot of bitcoin guys came in, a lot of LGD members came in and wanted to use their LGD to see if they can buy anything here at the club because nobody really thought that the club existed in the beginning,” explained Blomgren.

      “So now it’s, it’s become like curiosity. Let’s go down there and see if we can use our cryptocurrency.”

       

       

    Digest powered by RSS Digest