- Trade Is A Matter Of Survival For China
Authored by James Rickards via The Daily Reckoning,
Many investors are familiar with the fact that President Franklin Roosevelt closed all of the banks in America and confiscated all of the privately-owned gold by executive order in the early days of his administration, which began in 1933.
Presidents since then have seized assets from countries such as Iran, Syria, North Korea and Cuba and imposed sanctions on Russia and many other countries by executive order.
Yet, relatively few are familiar with the statutory authority for these orders.
The president does not need an act of Congress to support such extreme actions. The laws have already been passed and the president has standing authority to act like a dictator with regard to financial assets.
The first such statue was the Trading With the Enemy Act of 1917, TWE. This was used to seize German assets in the U.S. during the First World War. It’s how the U.S. took control of Bayer Aspirin from the German firm Bayer AG.
TWE was the authority FDR used to close the banks and seize the gold. It’s not clear whom FDR considered the “enemy” when he used TWE; probably private gold hoarders. But, in 1977, the Congress enacted an even more extreme version of TWE called the International Emergency Economic Powers Act of 1977, or IEEPA.
This is the equivalent of a nuclear weapon when it comes to financial warfare.
IEEPA allows the president to seize or freeze any asset or block any transaction if the president deems it to be necessary in the case of a national emergency.
The problem is that “national emergency” can be defined broadly to include trade imbalances, lost jobs or any other economic adversity. President Trump may now use IEEPA to block a variety of Chinese deals in the U.S. in retaliation for Chinese theft of U.S. intellectual property.
With the U.S. using its nuclear option in financial warfare, investors should hope that the Chinese don’t respond in kind.
President Trump may not appreciate the extent to which China will go to protect its interests. Trade negotiations are not the art of the deal, as far as China is concerned. Their goal is national survival.
China’s economy is not just about providing jobs, goods and services that people want and need.
It is about regime survival for a Chinese Communist Party that faces an existential crisis if it fails to deliver. The overriding imperative of the Chinese leadership is to avoid societal unrest.
But China is less stable and less powerful than it appears on the surface. Its apparent stability is more of a mask concealing internal divisions.
And it is afraid that its hold on power is weaker than many in the West suspect.
Remember Tiananmen Square?
Rather than showing the power and unity of the Chinese government, Beijing took a different lesson from Tiananmen Square.
As my colleague Kevin Massengill has pointed out, it revealed China’s political fragility.
We all know about the massacre. But what is not widely known is that several army officers refused orders to crush protests throughout China.
Seven retired generals, including a former defense minister, signed a letter opposing the use of force against the people of Beijing:
“Due to the exigent circumstances, we as old soldiers, make the following request: Since the People’s Army belongs to the people, it cannot stand against the people, much less kill the people, and must not be permitted to fire on the people and cause bloodshed; to prevent the situation from escalating, the Army must not enter the city.”
“I’d rather be beheaded than be a criminal in the eyes of history,” said one general commanding forces in the Beijing military district.
They were not the only one who felt that way. As Kevin has noted, armored divisions of 10,000 soldiers allowed themselves to be stopped for days by crowds of students and ordinary citizens who brought them food and water while explaining why their cause was just.
An estimated 3,500 PLA officers disobeyed orders to crush protests. Many Chinese army officers were reportedly executed. Others were demoted, or faced court martial and imprisonment.
The Tiananmen Square Massacre, Kevin says, is an example of why and proves that the position of the Chinese Communist Party is more precarious than is widely understood, even now, almost 30 years later.
Here’s something else not widely known about the protests…
The Tiananmen Square protests and massacre of 1989 did not start out as a liberty movement, although that’s how they are remembered in the West. It started out as an anti-inflation protest, and that’s how the Communists remember it.
And given China’s current economic problem, Beijing’s challenge is becoming more difficult every day. Consider what’s happening in China right now…
Growth in GDP is conventionally defined as the sum of consumer spending, investment, government spending (excluding transfer payments) and net exports.
Most large economies other than oil-producing nations get most of their growth from consumption, followed by investment, with relatively small contributions from government spending and net exports.
A typical composition would show a 65% contribution from consumption plus a 15% contribution from investment. China is nearly the opposite, with about 35% from consumption and 45% from investment.
That might be fine in a fast-growing emerging-market economy like China if the investment component were carefully designed to produce growth in the future as well as short-term jobs and inputs.
But that’s not the case.
Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused.
What’s worse is that these white elephants are being financed with debt that can never be repaid. And no allowance has been made for the maintenance that will be needed to keep these white elephants in usable form if demand does rise in the future, which is doubtful.
Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste. The Chinese landscape is littered with “ghost cities” that have resulted from China’s wasted investment and flawed development model.
This wasted infrastructure spending is the beginning of the debt disaster that is coming soon. China is on the horns of a dilemma with no good way out.
On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes. The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities.
The Communist Chinese leadership knew that a day of reckoning would come. The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase).
Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.
Instead of these unpalatable extremes, the Chinese leadership is trying to steer a middle course with gradual financial reform and gradual limits on shadow banking. I’ve previously predicted that this gradual policy would not work because the credit situation is so extreme that even modest reform would slow the economy too fast for comfort.
That’s exactly what has happened. China has already flip-flopped and is easing up on financial reform. That works in the short run but just makes the credit bubble worse in the long run. China may soon resort to a combination of a debt cleanup and a maxi-devaluation of their currency to export the resulting deflation to the rest of the world.
It is probably the best way to avoid the social unrest that terrifies China.
When that happens, possibly later this year in response to Trump’s trade war, the effects will not be confined to China. A shock yuan maxi-devaluation will be the shot heard round the world as it was in August and December 2015 (both times, U.S. stocks fell over 10% in a matter of weeks).
I hope President Trump knows what he’s getting into.
- March Payrolls Preview: Watch For Another Jump In Hourly Earnings
The BLS will release the March Payrolls Report at 0830EDT on 6th April 2018: recent macroeconomic data raises hopes for another solid month of payrolls growth, while wage growth is expected to pick up before faster growth towards the end of the year.
Job growth accelerated in the last three reports (to +242k compared to +182k in 2017, on average), and both ADP private payrolls and the majority of employment surveys remained strong or improved further in March. Both initial and continuing jobless claims fell to new cycle lows in the weeks leading up to the March payroll reference period. Offsetting this will be a swing towards unfavorable weather will weigh on job growth, with a drag from unseasonably high snowfall of between 30k and 60k (relative to trend). Consensus expects around 185K new jobs added.
While attention will once again be focused squarely on the avg hourly earnings number – where consensus expects a strong 0.3% M/M pick up and a 2.7% Y/Y increase reflecting favorable calendar effects (the survey week ended on the 17th – a lingering question is whether the unemployment rate, expected to drop to 4.0%, will actually dip to a 3-handle, which of course is painfully considering there are 95 million Americans not in the labor force, also known as “record slack”, and is the main reason why wages will not rise for a long, long time.
Here is a snapshot of what to expect courtesy of RanSquawk
• Nonfarm Payrolls: (Exp. 185k, Prev. 313k)
• Unemployment Rate: (Exp. 4.0%, Prev. 4.1%)
• Average Earnings Y/Y: (Exp. 2.7%, Prev. 2.6%)
• Average Earnings M/M: (Exp. 0.3%, Prev. 0.1%)
• Average Work Week Hours: (Exp. 34.5hrs, Prev. 34.5hrs)
• Labour Force Participation: (Prev. 63.0%)PAYROLL TRENDS: Trend rates remain firm, particularly after last month’s largest gain in payrolls in 18 months. Payroll growth has averaged 190k/month over the last 12-months, 205k/month over the six-months, and 242k/month over the last three-months, and the consensus view expects 195k in February.
PAYROLL GROWTH: ADP reported another solid increase in March (241k vs. expected 205k; previous also revised 11k higher to 246k). However, as is often the case, it’s worth taking this figure with a pinch of salt. “The ADP survey is not a great leading indicator for payrolls, not least because it is partly based on lagged changes in payrolls,” writes Capital Economics. “Nevertheless, to the extent it is useful, it points to a labour market still in exceptionally good health.”
EARNINGS GROWTH: Average hourly earnings are expected to increase 0.2% M/M, taking the Y/Y growth rate up to 2.7% from 2.6% last month. Capital Economics note that the share of small firms reporting they plan to raise compensation currently sits at an 18-year high, suggesting that a firmer pick up in wages could be just around the corner. Further supporting earnings this month could be a calendar quirk. “The 15th of the month fell within the payrolls survey week in March, which is historically associated with some upside bias in the month-over month change in AHE relative to the prior month,” writes Morgan Stanley.
BUSINESS SURVEYS: The employment components of the two ISM surveys were again consistent with strong job growth. The manufacturing survey saw the employment component rise to 57.3 from 54.5 and the non-manufacturing survey rose to 56.6 from 55.0.
UNEMPLOYMENT CLAIMS: In the survey week – the week that includes the 12th March – initial jobless claims increased to 229K although those continuing to claim fell to 1.828mln and remained near multi-decade lows.
OTHER FACTORS: This month weather could have impacted the sampling process this month. “The third of four Nor’easters hit during the March survey period (the week that includes the 12th of the month), dumping multiple feet of snow in New England,” writes RBC. “Therefore, we would take hour and labour force flows with a grain of salt.” That being said, the poor weather should not have impacted the headline payroll count numbers. Capital Economics note that February’s mammoth gain would have been even stronger were it not for the worst flu season in almost a decade and they expect to see some boost from the fading flu epidemic in March.
MARKET REACTION: As is often the case, the market will first likely first move on the payrolls headline. A stronger than expected number should cause strength in the USD and rates to move lower, and vice-versa for a lower than expected figure. However, with earnings growth a prerequisite for further Fed rate hikes, focus should turn to the details of the report. If wage growth exceeds estimates it could see markets begin to price in more rate hikes this year, with markets currently only pricing in an approximately 30% chance of three further rate hikes in 2018.
* * *
Next, Goldman breaks out the factors arguing for a stronger, weaker or neutral report.
- Jobless claims. Initial jobless claims fell to a new cycle low during the four weeks between the payroll reference periods (225k vs. 228k for February and 241k for January). Additionally, continuing claims resumed their downtrend, falling at their fastest pace between the survey periods in nearly a year (-50k).
- Service-sector surveys. Service-sector employment surveys improved on net in March, and our non-manufacturing employment tracker rose 0.9pt to 56.9, a 4½-year high. This improvement was also broad-based, with increases in five of the six business-survey measures we track in the sector. In particular, the ISM non-manufacturing employment component rebounded 1.6pt to 56.6. Additionally, 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 (+1.0pt to +25.0). Service-sector job growth picked up to 187k in February and has increased 137k on average over the last six months.
- ADP. The payroll processing firm ADP reported a 241k increase in March private payroll employment, 31k above consensus expectations and its fourth consecutive reading above 240k. While we expect a larger drag from winter weather in the BLS payrolls measure—reflecting differences in methodology—the continued strength in the ADP data is consistent with our view that the underlying pace of job growth has probably accelerated.
- Job postings. The Conference Board’s Help Wanted Online (HWOL) report showed a 2.2% increase in online job postings (mom sa), retracting over half of its February decline (which itself followed four consecutive increases). However, 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.
Arguing for a weaker report:
- Weather. NOAA weather-station data indicate that snowfall was unusually high in March (on a population-weighted basis), and this followed unseasonably mild weather in February. While most of the accumulation occurred outside of the survey week, we nonetheless expect the incremental swing in snowfall to weigh on job growth, with an impact of between -30k to -60k relative to trend (see Exhibit 1, right axis is inverted). One mitigating factor here is that much of the survey-week snowfall occurred in New England and upstate New York, regions more accustomed to severe winter weather.
- Retail employment. Despite weak retail sales results in the first two months of the year, retail payrolls rose 50k in February, a sharp acceleration from its prior 6-month trend (of +5k on average). We believe this strength reflected a favorable swing in the weather as opposed to an underlying pickup in labor demand. Accordingly, a flat or down March reading appears probable.
Neutral factors:
- Manufacturing-sector surveys. Headline manufacturing-sector surveys generally weakened in March, but the employment components were more mixed. Our manufacturing employment tracker edged down 0.2pt to 59.5, still an elevated level consistent with a solid pace of job gains in that sector. While the steel and aluminum tariffs announced by the Trump administration could potentially weigh on hiring in affected industries (due to increased uncertainty) 1, we note that the more recent escalation in trade tensions to a broader set of industries was announced after the March survey period. Manufacturing payroll employment rose 31k in February and has increased by 25k on average over the last six months.
- Job cuts. Announced layoffs reported by Challenger, Gray & Christmas rebounded 21k to 54k in March (SA by GS), a two-year high. On a year-over-year basis, announced job cuts increased 14k. However, these increases were concentrated in the retail industry (35k layoffs, NSA) and likely reflected the announced Toys ‘R’ Us liquidation—which had not started as of the March reference period (this retailer currently employs 31,000 workers).
Finally, some additional thoughts on the most important aspect of tomorrow’s report – hourly earnings – from Goldman.
We estimate average hourly earnings increased 0.3% month over month, reflecting somewhat favorable calendar effects (the survey week ended on the 17th). We also note that last month’s month-over-month increase (+0.15%) was dragged down by a sharper-than-usual drop among supervisory employees, a relatively mean-reverting subset (in contrast, production and nonsupervisory average hourly earnings increased 0.27%). Additionally, to the extent that the increase in the February workweek (+0.1 to 34.5 hours) weighed on wage growth, this would suggest scope for mean-reversion in March (the workweek is now at a 2-year high). Taken together, we estimate a 0.3% month-over-month gain that pushes up the year-over-year rate a tenth to 2.7%.
Whether this rise in earnings, together with the latest round of Trump’s trade war will be enough to unleash another market crash, we’ll find out shortly.
- Grant's Almost Daily: Vehicle Vestible
Submitted by Grant’s Interest Rate Observer
Vehicle Vestibule
It’s alive! Much like Frankenstein’s monster, the automobile market has been jolted back to life by an external shock, this one in the form of the hurricanes which pounded large swaths of the United States last summer. After sales ebbed to a seasonally adjusted annualized rate (SAAR) of 16.03 million in August of last year (the lowest reading since early 2014), the arrival of destructive storms such as Harvey and Irma coincided with an abrupt rebound in sales: Ward’s Automotive Group calculates an average 17.57 million SAAR in the following seven months through March.
For industry leading-used vehicle retailer CarMax, Inc., (KMX on the NYSE), the uptick in new car sales didn’t translate into much good news. CarMax reported fourth quarter earnings yesterday (covering December to February), featuring revenues and earnings per share that each came in well shy of the sell-side consensus, while same store sales declined by a meaty 8% year-over-year. KMX shares enjoyed a bounce in response, although the company’s 5% decline since February 2017 lags the 13% gain from the S&P 500 over that period.
Still in the garage. KMX in white and the SPX in orange. Source: The BloombergVolume, not price, was the culprit. While Carmax’s gross profit per used vehicle inched higher to $2,147 amid a 2.5% year-over-year uptick in average selling price, used vehicle unit sales fell by 3.1% from their year-ago level. The large drop in volumes coupled with sturdy unit profits suggests a conscious decision to hold the line on pricing by KMX management, even as industrywide incentive spending continues to increase.
Average incentive spending rose for a 35th straight month in February according to Autodata, reaching $3,695 per unit from $3,594 year-over-year. For his part, CarMax CEO William Nash observed on the company’s conference call that “incentives have started to come down a bit.” Rising acquisition costs for used and wholesale vehicles were a bigger factor, with Nash noting that “the pricing environment . . . really hits us on two sides. It’s not only that acquisition prices went up on all inventory, but I also think there was pressure on the spread . . . between a late-model used car and a new car both because of our acquisition price going up and new car prices coming down in relative terms year-over-year.”
Taking inventory of an auto market that we judged vulnerable to both credit mishaps and a retrenchment in the used car prices which underpin trade-in activity, Grant’s took a bearish view on CarMax on Feb. 24, 2017 (“Disabled vehicles”). A Feb. 23, 2018 follow-up analysis (“Clunkers, Inc.”) focused on the price vs. volume conundrum facing KMX amid intensifying competitive pressures:
Strong prices were a tonic for CarMax’s revenue growth in the sweet phase of the cycle. From Feb. 28, 2009 to Nov. 30, 2015, the company’s average CarMax selling price ticked up by 23.3%, or 3.2% per annum, to $20,094. Over the same six years and nine months, the CarMax top line swelled by 93.2%, or 10.2% per annum, to $3.5 billion.
If yesterday’s results are any guide, CarMax’s decision to hold the line on pricing has taken a toll on activity. Meanwhile, the credit wheel keeps turning. CarMax’s auto finance unit reported a 21.9% year-over-year uptick in net income during the quarter as its provision for loan losses declined by 16.7% and average managed receivables jumped by 9.4%. Those sunny trends stand in seeming contrast with a Monday report from Bloomberg headed “Subprime New-Car Buyers Suddenly Go Missing from U.S. Showrooms.”
Rising interest rates and new vehicle prices are squeezing shoppers with shaky credit and tight budgets out of the market. In the first two months of the year, sales were flat among the highest-rated borrowers, while deliveries to those with subprime scores slumped 9 percent, according to J.D. Power.
As a corporate entity, CarMax is bullish on itself. On Feb. 28, 2017, the company announced a $4.55 billion share buyback, following a $2 billion repurchase authorization announced on Oct. 22, 2014. That’s no small part of KMX’s current $11.7 billion market capitalization. Those who know the company best have taken a different tack. Since the early September hurricanes, KMX insiders have sold 462,107 shares on the open market, cashing proceeds of just over $34 million. The only open market purchase during that period was of 35 shares
- Nuclear Blast Simulator Shows Whether You Would Survive An Attack
Authored by The Organic Prepper
Did you ever think about the places close to you that would be potential targets for a nuclear strike by an enemy? Chances are, the answer is yes. But how would a strike to that nearby target affect you? In the event of a nuclear strike, there are four things to consider. The numbers below are in the event of a 300 kiloton bomb:
- The Fireball: Everything in this range would be disintegrated, It is nearly a one-mile radius and also called Ground Zero.
- Radiation: A wave of deadly radiation would affect everything within 5.5 miles. This will cause lung injuries, severe burns, deafness, blindness, and internal bleeding. Anyone in this range who survives the immediate danger is likely to suffer from radiation poisoning in the upcoming weeks.
- The Shockwave: A shockwave of incredible power would spread throughout a range of about 11.5 miles. Also called the blast wave, this highly compressed air will travel at high velocities (up to 470 mph), destroying nearly every building in its path.
- The Heat: Heat from a nuclear blast would travel almost 50 miles. This heat can ignite fires and cause first degree burns.
You can plug any address into this website and see how far the effects of a nuclear strike would reach.
Here’s what a 300 KT strike on the White House would look like, so that you can get an idea of the different danger zones.
Where are nuclear strikes most likely to take place?
It depends. There are all sorts of variables with regard to nuclear targets. While most of us would think that cities like New York, Washington DC, and Los Angeles would be more desirable because of high population density, the targets are more likely to be strategic militarily.
This article from Business Insider states that cities aren’t the most likely targets anymore and that targeting has “shifted from cities to nuclear stockpiles and nuclear war-related infrastructure.” The map below shows the theoretical targets of an attack by Russia.
However, if North Korea were to attack the United States, the goals would be different, at least based on a North Korean propaganda photo from 2013.
In Hawaii, one of the closest targets to North Korea, the US military bases Pacific Command, which is in charge of all US military units in the region. San Diego is PACOM’s home port, where many of the US Navy ships that would respond to a North Korean attack base when not deployed.
Barksdale Air Force Base in Louisiana holds the US Air Force’s Global Strike Command, the entity that would be responsible for firing back with the US’s Minuteman III intercontinental ballistic missiles.
Washington D.C., of course, is the home of the US’s commander-in-chief, who must approve of nuclear orders. (source)
The North Korean target map looks like this:
What about radioactive fallout?
If a nuclear strike occurs and you are outside the range of the issues above, the next risk is the radioactive fallout.
The significant hazards come from particles scooped up from the ground and irradiated by the nuclear explosion. The radioactive particles that rise only a short distance (those in the “stem” of the familiar mushroom cloud) will fall back to earth within a matter of minutes, landing close to the center of the explosion. Such particles are unlikely to cause many deaths, because they will fall in areas where most people have already been killed. However, the radioactivity will complicate efforts at rescue or eventual reconstruction. The radioactive particles that rise higher will be carried some distance by the wind before returning to Earth, and hence the area and intensity of the fallout is strongly influenced by local weather conditions. Much of the material is simply blown downwind in a long plume.
Rainfall also can have a significant influence on the ways in which radiation from smaller weapons is deposited, since rain will carry contaminated particles to the ground. The areas receiving such contaminated rainfall would become “hot spots,” with greater radiation intensity than their surroundings. (source)
Radioactive fallout can cause myriad health problems. You can also be exposed to these particles when you eat plants, milk, or meat that has been contaminated by fallout. The biggest risk is thyroid cancer, which is why those who live in a place where there is a risk of fallout should stock up Potassium Iodide pills. (Here’s how to take them to prevent cancer due to radioactive fallout.) A Stanford University study warns:
Nuclear fallout poses health dangers, particularly in the form of cancer, to humans in the form of radiation. When radioactive chemicals break down they release a certain amount of radiation. When humans are exposed to this radiation there is a risk that it causes chemical changes in cells which can kill or makes cells abnormal. In damaging the DNA contained in cells, radiation can cause cancer and can also lead to birth defects in children due to the tampering with a person’s genetic makeup. (source)
The other variable
The last and scariest variable is this: how big is the bomb? On the map above, you can plug in different types of nuclear warheads for different results. If a Tsar bomb (the largest ever detonated in Russia) struck Washington, DC, it would demolish a substantially larger area and the death toll would reach 1,858,141 people, with injuries to nearly one and a half million more.
Here’s what that would look like.
As you can see, with a 50,000 KT bomb, the numbers are entirely different.
- The Fireball: Everything in this 31-mile range would be disintegrated
- Radiation: A wave of deadly radiation would affect everything within 44 miles. This will cause lung injuries, severe burns, deafness, blindness, and internal bleeding. Anyone in this range who survives the immediate danger is likely to suffer from radiation poisoning in the upcoming weeks.
- The Shockwave: A shockwave of incredible power would spread throughout a range of about 345 miles. Also called the blast wave, this highly compressed air will travel at high velocities (up to 470 mph), destroying nearly every building in its path.
- The Heat: Heat from a nuclear blast would travel 3200 miles. This heat can ignite fires and cause first degree burns.
There is an enormous difference in the scale of nuclear weapons. This video gives you some idea of the scope.
- Duterte: UN Human Rights Chief Is An "Empty-Headed Son Of A Whore"
Philippines President Rodrigo Duterte lashed out at one of his favorite targets – the United Nations – earlier this week when he labeled the UN’s Human Rights chief a “son of a whore” with an empty skull.
“Look, you have a big head but it’s empty. There is no gray matter between your ears. It’s hollow. It’s empty. It cannot even sustain a nutrient for your hair to grow because his hair here is gone,” Duterte said.
RT reports that Duterte made the comments during a Tuesday speech after UN Human Rights Commissioner Zeid Ra’ad Al Hussein said last month that Duterte was in need of a “psychiatric evaluation”. He also criticized the Philippines strongman for insulting UN rapporteur Agnes Callamard with what Al Hussein described as “the foulest of language.”
But the joke may be on Al Hussein, because Duterte said he’s already been to a psychiatrist, and the doctor gave him a clean bill of mental health – though he allegedly pointed out Duterte’s penchant for cursing.
“Hey son of a whore, you commissioner, I need to go to a psychiatrist? The psychiatrist told me: “You are okay, mayor. You are just fond of cursing,” he said.
Before winning the presidency in 2016, Duterte served as mayor of Davao, a city on the southernmost Philippines island of Mindanao.
Duterte told his audience that he’d been advised to let the remark go, but had decided that he couldn’t resist seeking revenge.
The target of Duterte’s scorn, the UN has been conducting an investigation into allegations of extrajudicial killings related to Duterte’s controversial war on drugs, something President Trump has sought to emulate by moving toward the death penalty for some drug-related crimes. Philippine police say they have killed roughly 4,100 suspects during the administration’s vicious crackdown on drug users and dealers. Aid groups estimate the number is as much as three times higher.
In the past, Duterte caused global outrage when he said that he’d be happy to kill drug addicts the way Adolf Hitler murdered Jews.
Duterte famously called former US President Barack Obama a “son of a bitch” and told him to “go to hell” after being criticized by the former president. He also threatened to “burn down the United Nations”, an idea which Elon Musk may be considering long and hard these days: after all insurance cash flow is still cash flow.
- How Much Income You Need To Afford the Average Home In Every State
The housing market has not only recovered its pre-recession levels, but some observers are actually starting to worry about yet another housing bubble. Housing prices are on the rise, thanks in large part to extremelytight inventory, so it’s worth asking: are potential home buyers getting priced out of the market? The answer depends on where they live and how much money they make.
HowMuch.net collected average home prices for every state from Zillow which we then plugged into a mortgage calculator to figure out monthly payments. Remember, mortgage payments consist of both the principal and the interest for the loan. The interest rate we used varied from 4 to 5% in each state, depending on the market. The lower the interest rate, the lower the monthly payment. To keep things simple, we assumed buyers could contribute a 10% down payment. Another thing to keep in mind is that financial advisors commonly recommend the total cost of housing take up no more than 30% of gross income (the amount before taxes, retirement savings, etc.). Using this rule as our benchmark, we calculated the minimum salary required to afford the average home in each state.
Top Five Places Where You Need the Highest Salaries to Afford the Average Home
1. Hawaii: $153,520 for a house worth $610,000
2. Washington, DC: $138,440 for a house worth $549,000
3. California: $120,120 for a house worth $499,900
4. Massachusetts: $101,320 for a house worth $419,900
5. Colorado: $100,200 for a house worth $415,000
Top Five Places Where You Need the Lowest Salaries to Afford the Average Home
1. West Virginia: $38,320 for a house worth $149,500
2. Ohio: $38,400 for a house worth $149,900
3. Michigan: $40,800 for a house worth $160,000
4. Arkansas: $41,040 for a house worth $161,000
5. Missouri: $42,200 for a house worth $165,900
Our map creates a quick snapshot of housing affordability across the United States. There are several pockets in which only the upper middle class and above can afford to own even the average home, most notably across the West and in the Northeast. There are only two states west of the Mississippi River where a worker with an annual salary under $40,000 can afford a mid-level home: Missouri and Oklahoma. Colorado stands out as the only landlocked state requiring a significant amount of income ($100,200), thanks in large part to the housing market around Denver.
Homes tend to be more affordable in the eastern half of the country, with a notable pocket of “green” (less expensive) states located in the upper Midwest. The North is generally more affordable than the South and the typical home is significantly easier to buy in places like Michigan or Ohio than in Louisiana or Arkansas. Additionally, our map indicates that workers can more easily afford homes in the East than in the West, which is surprising given how much more land is available out West. It is important to note that there are certainly deep pockets of poverty in all of these places, which suggests that our map obscures the inequality behind averages.
The best takeaway from our map is that housing remains affordable in large swaths of the country, even though there will always be places like California and New York where there is simply too much demand for the available inventory. Thankfully, that doesn’t mean that buying a home is suddenly out of reach for average Americans in Ohio or Mississippi, for example.
- Body Of Missing CDC Researcher Found In River
A body pulled from the Chattahoochee river is that of an Atlanta researcher for the Centers for Disease Control (CDC) who went missing in mid-February, Atlanta police reported on Thursday.
Timothy Cunningham, 25, was last seen February 12 after he left work midway through the day due to an illness, prompting his friends and family to sound the alarm.
Terrell Cunningham, 60, said his son’s supervisor told him that Commander Cunningham had reported for work but that he had left midday because he wasn’t feeling well. –NYT
The family of Timothy J. Cunningham, 35, grew concerned after the Harvard-trained epidemiologist and US Navy officer wouldn’t answer texts or calls. Driving over 600 miles from Maryland to Atlanta, Cunningham’s parents gained access to his house where they found their son’s phone, wallet and driver’s license.
Quoted by the NYT, his father said that Commander Cunningham had “a lot going on” personally and professionally, and his most recent conversation with his son had left him worried.
“The tone, and the numerous exchanges gave us reason to be concerned about Tim,” said Terrell Cunningham. “And I don’t know if it’s an instinct you have because it’s your child, but it was not a normal conversation and I was not comfortable.”
Cunningham’s car was parked in the garage, while his dog – Mr. Bojangles, aka Bo, was left all by himself.
“Tim never leaves Bo unattended,” Terrell Cunningham told NBC News. “He just doesn’t do it.”
“None of this makes sense,” Timothy’s brother Anterio told Atlanta Fox affiliate WAGA-TV. “He wouldn’t just evaporate like this and leave his dog alone and have our mother wondering and worrying like this. He wouldn’t.”
“I feel like I’m in a horrible Black Mirror episode,” Cunningham’s sister Tiara told the New York Times. “I’m kind of lost without him, to be quite honest.”
Tiara was the last family member to speak with Timothy Cunningham before his disappearance – who said the last time they spoke her brother “sounded not like himself.” When she texted him a bit later, she didn’t get a response – nor did the rest of the Cunningham family.
Atlanta police said Cunningham had been upset over not receiving a promotion – however the CDC later retracted that information, stating that he had in fact recently received one.
Cunningham – who was promoted to commander in the US Public Health Service last July, had worked on the government’s response to both Zika and Ebola outbreaks. With two degrees from Harvard’s School of Public Health, he had been named one of The Atlanta Business Chronicle’s “40 under 40” award winners.
- John Kiriakou Delivers Petition For Assange To Ecuador’s D.C. Ambassador On Behalf Of Intel Veterans
Submitted by Elizabeth Lea Vos of Disobedient Media
Earlier today, CIA whistleblower and member of Veteran Intelligence Professionals for Sanity (VIPS) John Kiriakou personally delivered a letter to the Ecuadorian embassy in Washington, DC, which was addressed to Ecuadorian Ambassador, Francisco Jose Borja Cevallos.
The document calls for the immediate restoration of communications for Wikileaks Editor-In-Chief Julian Assange.One week ago, Julian Assange’s internet, phone calls and access to visitors were totally cut off at the behest of Ecuadorian President, Lenin Moreno.
A video of Kiriakou delivering the message to the Ecuadorian embassy in Washington is available here.
Wikileaks supporters have rallied both online and on the ground in London to call for his human rights to be restored continually, ever since news emerged that Assange had been prevented from contact with the outside world.
The Courage Foundation reported that a similar Spanish-language message calling on Ecuador’s Lenin Moreno to end the isolation of Julian Assange was also delivered to the Ecuadorian President today. That letter was signed by 338 intellectuals from 33 countries. The effort was coordinated by the Landless Workers’ Movement in Brazil.
John Kiriakou’s personal support of this message was particularly noteworthy, in light of the fact that his former agency is now personally invested in arresting the Wikileaks co-founder. Kiriakou recently participated in the online vigil, #ReconnectAssange, during which he spoke to the unjust treatment Assange would likely face if extradited and prosecuted in the Eastern District Court of Virgina, saying: “[Assange] couldn’t possibly get a fair trial in the Eastern District of Virginia.”
Those who wish to support Assange and Wikileaks can sign the petition calling for his right to free speech to be respected.
A copy of the letter delivered by Kiriakou to Ambassador Francisco Jose Borja Cevallos, as well as the signatories supporting its contents, are provided below.
Your Excellency:
We, the undersigned applaud and commend the decision of the Government of Ecuador to grant asylum, to welcome as a citizen, and to grant diplomatic status to Wikileaks founder Julian Assange.
In the case of Mr. Assange, Ecuador has been a role model for the international community for its views on transparency and press freedom. Every country should emulate Ecuador.
I am reminded of August 1990 when Iraqi troops invaded Kuwait. US President George H. W. Bush was unsure of what the US response should be. He received a call from British Prime Minister Margaret Thatcher. “Now is not the time to go wobbly, George,” she told him. Well, now is not the time to go wobbly in our support of Wikileaks and Julian Assange.
It is only because of Wikileaks that we know about war crimes and atrocities committed against Iraqi citizens by US troops. It is because of Wikileaks that we know about the surveillance industry, about warrantless wiretapping and a great deal more about NSA spying on American citizens. And with President Trump’s appointment of the notorious Gina Haspel as the new CIA director, we know that there is a danger that the CIA will keep its torture history secret by keeping it classified.
It is Wikileaks that has kept, and will continue to keep, all Americans informed of what their government does in their name. It is Julian Assange who has led that fight. We ask the Government of Ecuador to keep up the fight for transparency and press freedom, to continue to be a world leader in honesty and accountability. We call on the Government of Ecuador to reconnect Julian Assange to the world.
Respectfully,
John Kiriakou, former CIA counterterrorism officer and former senior investigator, US Senate Foreign Relations Committee.”
Signatories on the letter included:
- Ray McGovern, former CIA analyst and presidential briefer
- Bogdan Dzakovic, former team leader, Federal Air Marshals
- Marshall Carter-Tripp, Foreign Service Officer (retired)
- Ann Wright, Colonel, US Army Reserve and Foreign Service Officer (retired)
- Robert Wing, Foreign Service Officer (retired)
- Philip Giraldi, former CIA case officer
- Todd E. Pierce, Major, Judge Advocate General (retired)
- C. J. Laniewski, Lieutenant Colonel, US Army (retired)
- Coleen Rowley, retired FBI special agent and former Minneapolis Division Legal Counsel
- Elizabeth Murray, former Deputy National Intelligence Officer for the Near East, National Intelligence Council (retired)
- Peter Van Buren, Foreign Service Officer (retired)
- J. Kirk Wiebe, former senior intelligence analyst and whistleblower, NSA
- Roger Waters, co-founder, Pink Floyd
- Alex Cox, film director, writer, and producer
- Ann Wright, Colonel, US Army Reserve and Foreign Service Officer (retired)
- Larry Johnson, former CIA officer and former Foreign Service officer
- All Russiagate Roads Lead To London: Evidence Emerges Of Mifsud’s Links To UK Intelligence
Authored by Elizabeth Lea Vos Via Disobedient Media
Over the last few months, Professor Joseph Mifsud has become a feather in the cap for those pushing the Trump-Russia narrative. He is characterized as a “Russian” intelligence asset in mainstream press, despite his declarations to the contrary. However, evidence has surfaced that suggests Mifsud was anything but a Russian spy, and may have actually worked for British intelligence. This new evidence culminates in the ground-breaking conclusion that the UK and its intelligence apparatus may be responsible for the invention of key pillars of the Trump-Russia scandal. If true, this would essentially turn the entire RussiaGate debacle on its head.
To give an idea of the scope of this report, a few central points showing the UK connections with the central pillars of the Trump-Russia claims are included here, in the order of discussion in this article:
- Mifsud allegedly discussed that Russia has ‘dirt’ on Clinton in the form of ‘thousands of emails’ with George Papadopoulos in London in April 2016.
- The following month, Papadopoulos spoke with Alexander Downer, Australia’s ambassador to the UK, about the alleged Russian dirt on Clinton while they were drinking at a swanky Kensington bar, according to The Times. In late July 2016, Downer shared his tip with Australian intelligence officials who forwarded it to the FBI.
- Robert Goldstone, a key figure in the ‘Trump Tower’ part of the RussiaGate narrative, sent Donald Trump Jr. an email claiming Russia wanted to help the Trump campaign. He is a British music promoter.
- Christopher Steele, ex-MI6, who worked as an MI6 agent in Moscow until 1993 and ran the Russia desk at MI6 HQ in London between 2006 and 2009. He produced the totally unsubstantiated ‘Steele Dossier’ of Trump-Russia allegations, with funding from the Clinton campaign and the DNC.
- Robert Hannigan, the head of British spy agency GCHQ, flew to Washington DC to share ‘director-to-director’ level intelligence with then-CIA Chief John Brennan.
Each of these strands of UK-tied elements of the Russiagate narrative can be substantially dismantled on close inspection. This untangling process leads to the surprising conclusion that UK intelligence services fabricated evidence of collusion in order to create the appearance of a Trump-Russia connection.
This trend begins with Joseph Mifsud, a Maltese scholar with an eclectic academic history who Quartz described as an “enigma,” while legacy press has enthusiastically characterized him as a central personality in the Trump-Russia scandal. The New York Times described Mifsud as an “enthusiastic promoter of President Vladimir V. Putin of Russia”, citing his regular involvement in the annual meetings of the Valdai Discussion Club, a Russian-based think-tank, as well as three short articles he wrote in support of Russian policies.
Mifsud strongly denied claims that he was associated with Russian intelligence, telling Italian newspaper Repubblica that he was a member of the European Council on Foreign Relations and the Clinton Foundation, adding that his political outlook was “left-leaning.” Last month, Slate reported Mifsud had ‘disappeared’, as did some of the other figures linking the UK to the Trump-Russia scandal. This aspect will be discussed in more detail below.
To contextualize Mifsud’s eclectic academic career in terms of intelligence service, it is helpful to note that research undertaken by this author and Suzie Dawson as part of the Decipher You project has repeatedly shown the close ties – an outright merger in many cases – between the intelligence community and academia. This enmeshment also takes place with think-tanks, NGOs, and in the corporate sphere. In this light, Mifsud’s brand of ‘scholarship’ becomes far less mysterious.
Mifsud’s alleged links to Russian intelligence are summarily debunked by his close working relationship with Claire Smith, a major figure in the upper echelons of British intelligence. A number of Twitter users recently observed that Joseph Mifsud had been photographed standing next to Claire Smith of the UK Joint Intelligence Committee at Mifsud’s LINK campus in Rome. Newsmax and Buzzfeed later reported that the professor’s name and biography had been removed from the campus’ website, writing that the mysterious removal took place after Mifsud had served the institution for “years.”
WikiLeaks Editor-in-Chief Julian Assange likewise noted the connection between Mifsud and Smith in a Twitterthread, additionally pointing out his connections with Saudi intelligence: “[Mifsud] and Claire Smith of the UK Joint Intelligence Committee and eight-year member of the UK Security Vetting panel both trained Italian security services at the Link University in Rome and appear to both be present in this [photo].”
The photograph in question originated on Geodiplomatics.com, where it specified that Joseph Mifsud is indeed standing next to Claire Smith, who was attending a: “…Training program on International Security which was organised by Link Campus University and London Academy of Diplomacy.” The event is listed as taking place in October, 2012. This is highly significant for a number of reasons.
First, the training program Smith attended with high-ranking members of the Italian military was organized by the London Academy of Diplomacy, where Joseph Mifsud served as Director, as noted by The Washington Post. That Claire Smith was training military and law enforcement officials alongside Mifsud in 2012 during her tenure as a member of the UK Cabinet Office Security Vetting Appeals Panel, which oversees the vetting process for UK intelligence placement, strongly suggests that Mifsud has been incorrectly characterized as a Russian intelligence asset. It is extremely unlikely that Claire Smith’s role in vetting UK intelligence personnel would lead to her accidentally working with a Russian agent.
The connection between Mifsud and Smith does not end at bumped elbows in a photograph. Mifsud’s LinkedIn profile lists the University of Stirling as a place of occupation in connection with his service as Director of the London Academy of Diplomacy (LAD), where Claire Smith served as a visiting professor from 2013-2014 according to her LinkedIn profile. This adds yet another verifiable connection between a man who is at the center of already-flimsy Trump-Russia allegations and a high-ranking British intelligence figure.
Claire Smith also hosted a seminar titled “Making Sense of Intelligence” at the University of Stirling. The event registration form describes her career, including her service as Deputy Chief of Assessments Staff in the Cabinet Office, as a member of the UK Joint Intelligence Committee and her completion of an eight-year term as a member of the UK Security Vetting and Appeals Panel.
A particularly compelling factor indicating that Mifsud’s working relationship with Claire Smith suggests his direct connection with UK intelligence is Smith’s membership of the UK’s Joint Intelligence Committee (JIC), a supervisory body overseeing all UK intelligence agencies. The JIC is part of the Cabinet Office and reports directly to the Prime Minister. The Committee also sets the collection and analysis priorities for all of the agencies it supervises. Claire Smith also served as a member of the UK’s Cabinet Office.
In summary, Mifsud’s appearance with Claire Smith at the LINK campus, in addition to her discussion on intelligence at yet another university where Mifsud was also employed, as well as her long-standing role in UK intelligence vetting and her position as a member of the UK Joint Intelligence Committee, would suggest that the roving scholar is not a Russian agent, but is actually a UK intelligence asset. The possibility that such a high-ranking member of this extremely powerful intelligence supervisory group was photographed standing next to a “Russian” asset unknowingly is patently absurd. This finding knocks the first pillar out from under the edifice of the Trump-Russia allegations. It provides an initial suggestion of the UK’s involvement in procuring the ‘evidence’ that fueled the debacle.
Claire Smith is not the only British official associated with Mifsud. He was a speaker at an event by the Central European Initiative alongside former British diplomat Charles Crawford, whose postings included Moscow, Sarajevo, Belgrade and Warsaw. Crawford is listed as a visiting Professor with the same London Academy of Diplomacy (LAD) where Mifsud served as Director, associated with Stirling University. This adds more weight to the idea that Mifsud is a familiar figure among the upper echelons of the UK intelligence and foreign policy establishment.
The final nail in the coffin of the theory that Mifsud is a Russian spy is this photograph of Mifsud standing next to Boris Johnson, the UK Foreign Secretary, as reported by The Guardian. The photograph, taken in October 2017 – nearly a full year after the US Presidential election and nine months after Mifsud’s name appeared in newspaper headlines worldwide as allegedly involved in Russian meddling in that election – is either highly embarrassing for the hapless Mr Johnson, or it’s not, because Joseph Mifsud is actually a valued and security-vetted asset to the United Kingdom.
Another aspect of the RussiaGate claims tied to the UK includes the reported conversation between George Papadopoulos and Alexander Downer, Australia’s High Commissioner to the UK who was based in London. The pair reportedly spoke about the alleged Russian ‘dirt’ on Hillary Clinton while they were drinking at a swanky bar in London. According to Lifezette, Downer is closely tied with The Clinton Foundation via his role in securing $25 million in aid from his country to help the Clinton Foundation fight AIDS.
He is also a member of the advisory board of London-based Hakluyt & Co, an opposition research and intelligence firm set up in 1995 by three former UK intelligence officials and described as “a retirement home for ex-MI6 [British foreign intelligence] officers, but it now also recruits from the worlds of management consultancy and banking”. Whereas opposition research group Fusion GPS has received all the media attention so far, Lifezette states that Hakluyt is “a second, even more powerful and mysterious opposition research and intelligence firm… with significant political and financial links to former Secretary of State Hillary Clinton and her 2016 campaign”.
Yet another UK link to a central pillar of the Trump-Russia narrative is British music promoter Robert Goldstone, who was reported to have organized a meeting between Donald Trump Jr. and Russian nationals in June 2016. In the email chain setting up the Trump Tower meeting, both before and after the meeting, the only real ‘evidence’ of collusion with Russia come from Goldstone’s own emails; none-too-subtle heavy hints about ‘Russian help’ dropped by Goldstone but later – after the emails became public – walked back by him as “hyping the message and… using hot-button language to puff up the information I had been given.”
Some have speculated that Goldstone was also involved with British or US intelligence efforts to concoct the RussiaGate narrative. As soon as his name emerged in the press, Goldstone – like Christopher Steele and Joseph Mifsud – went into ‘hiding’. Multiple press reports claimed he had done so out of fear for his safety, a claim also made about Christopher Steele when his name first became public. Indeed, the UK government issued a DA Notice(a press suppression advisory notice) to the British press to suppress the ex-spy Steele’s name. It is notable that, of all the people swept up into the ever-burgeoning RussiaGate investigation, it is only the UK-linked witnesses – Mifsud, Steele, Goldstone – who have felt the need to go into hiding when their role has been exposed.
The New York Times summed up the contents of Christopher Steele’s dossier: “Mr. Steele produced a series of memos that alleged a broad conspiracy between the Trump campaign and the Russian government to influence the 2016 election on behalf of Mr. Trump. The memos also contained unsubstantiated accounts of encounters between Mr. Trump and Russian prostitutes, and real estate deals that were intended as bribes.”
Press reports also relate that Steele was ordered by an English court to appear for a videotaped deposition in London as part of an ongoing civil litigation against Buzzfeed for publishing the unverified dossier, for which Steele was paid $168,000 by Glenn Simpson’s company Fusion GPS, who were in turn paid by Mark Elias of law firm Perkins Coie, lawyers to both the Hillary Clinton campaign and the DNC.
In his thread on the role of UK intelligence interference in the 2016 US Presidential race, Assange also noted how Christopher Steele used another former UK ambassador to Moscow, Sir Andrew Wood, to funnel the dossier to Senator John McCain in a way that moved the handover out of London, to Canada. It’s often said that no one ever really leaves the UK security services when they retire – many ‘former’ MI6 or MI5 officers’ private intelligence businesses are dependent on maintaining good contacts among their ex-colleagues – so it is interesting to note that Sir Andrew Wood says he was “instructed” — by former British spy Christopher Steele — to reach out to the senior Republican, whom Wood called “a good man,” about the unverified document.
Lastly, Robert Hannigan, former head of British intelligence agency GCHQ, is another personality of note in the formation of the RussiaGate narrative and its surprisingly deep links to the UK. The Guardian noted that Hannigan announced he would step down from his leadership position with the agency just three days after the inauguration of President Trump, on 23 January 2017. Jane Mayer in her profile of Christopher Steele published in the New Yorkeralso noted that Hannigan had flown to Washington D.C. to personally brief the then-CIA Director John Brennan on alleged communications between the Trump campaign and Moscow. What is so curious about this briefing “deemed so sensitive it was handled at director-level” is why Hannigan was talking director-to-director to the CIA and not Mike Rogers at the NSA, GCHQ’s Five Eyes intelligence-sharing partner.
The central supporting pillars of the RussiaGate allegations hinge on figures with close ties to British intelligence and UK nationals. Even establishment media like The Guardian reported that British spies from GCHQ were the first to alert US authorities to so-called Russian interference. Did the entire narrative originate with UK intelligence groups in an effort to create the appearance of Russian collusion with the Trump Presidential campaign, much as the Guccifer 2.0 persona was used in the US to discredit WikiLeaks’ publication of the DNC emails?
If it was not Russia at the heart of a complex operation to topple the Clinton campaign in 2016, then was British Intelligence responsible for creating false narratives and mirage-like ‘evidence’ on which the Trump-Russia scandal could hinge?
Put another way, if UK intelligence is responsible for manufacturing the Trump-Russia allegations, it suggests that the UK’s efforts formed an international arm running concurrently with domestic US ‘Deep State’ efforts to sabotage Trump’s presidential campaign and/or oust him once he had been elected.
Is British intelligence involvement in RussiaGate, as outlined above, the international version of CrowdStrike and former FBI figures manufacturing the Guccifer 2.0 persona specifically to smear WikiLeaks via false allegations of a Russian hack of the DNC? Have we been looking in the wrong place – at the wrong country – to unearth the so-called ‘foreign meddling’ in the 2016 US election all along?
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