• Would Trump Nuking North Korea 'Make America Great Again'?

  Authored by Andrew Korybko via Oriental Review,

  If Trump is willing to accept the enormous loss of American life — which are the only people that he cares about as the US President — then turning the Korean Peninsula into Asia’s nuclear panhandle would indeed “Make America Great Again” by permanently handicapping its Russian & Chinese geostrategic competitors as well as its Japanese & South Korean economic ones.

  The war of words between North Korean leader Kim Jong Un and US President Donald J. Trump has suddenly taken a very foreboding turn, with both men now talking about “nuclear buttons” and openly hinting at the prospects of carrying out a preemptive first strike against the other.

  North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!

  — Donald J. Trump (@realDonaldTrump) January 3, 2018

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

  The first thing to remember is that Trump is dead serious (pun intended) about his desire to “Make America Great Again”, and that he will stop at nothing to see his vision fulfilled in the future, including if he has to use nuclear weapons to make it happen.

  Normative objections like arguing about how “terrible” and “evil” this is have absolutely no effect on Trump, who has come to be the literal embodiment of the “Mad Man Theory” and cares nothing about such concerns, ruthlessly viewing the world through a Neo-Realist prism where everything revolves around power.

  If there’s any “emotional” point that would give Trump pause to think, then it’s about the lives of the nearly quarter-million Americans (including servicemen and their families) living in South Korea who could easily be killed in the opening days of a Korean Continuation War, and this is the only reason why Trump has yet to use nuclear weapons against North Korea.

  Right now the President whose opponents label as a “heartless psychopath” is actually very concerned about the moral responsibility that he would have to forever shoulder in potentially sacrificing so many Americans, but if he ever surmounts his conscientious objections to this or is misled by the “deep state” into believing that North Korea is in the imminent process of launching its own preemptive strike (or is provoked by the military to already do so), the he might “make peace with himself” in the “comfort” that “only” 250,000 Americans had to die (notwithstanding the millions of Asians that he doesn’t care about) in order to “Make America Great Again”.

  

  Brutally speaking, the only real consequence that the US would suffer from nuking North Korea is the death of its South Korean-based compatriots as “collateral damage”, and the possibility of a Chinese military response to America’s brazen bombing(s?) could be avoided if Washington provokes Pyongyang into striking first because of Beijing’s previous pledge not to intervene if its wayward “ally” is the one most directly “responsible” for reigniting hostilities.

  Accepting that the US would quickly emerge as militarily victorious in this conflict, it’s now time to examine how the destructive consequences of nuking North Korea would actually “Make America Great Again” from Trump’s “Kraken”-like Neo-Realist perspective.

  To begin with, almost all of North Korea’s territory could be rendered inhospitable depending on the scale and scope of the US’ nuclear arms use, thus turning it into the ultimate “buffer zone” and thereforr making the decades-long question of whether the (now-former) country would be occupied by Chinese or American-South Korean troops after a speculative continuation war moot.

  Secondly, the atmospheric aftereffects of America’s nuclear weapons use are difficult to precisely predict and should be left to more competent experts to comment upon in detail, but it can confidently be presumed that this would affect South Korea, Japan, China, and Russia, up to and including making some of their territory also inhospitable.

  Not only that, but Seoul and even Tokyo could be wiped out if Pyongyang is successful in nuking them in its final moments, and even if they’re not destroyed, then the resultant nuclear atmospheric damage to South Korea and Japan would devastate these once-strong Asian economies and reduce them to uncompetitive “Third World” states.

  The same can also happen to a large chunk of China in its rustbelt “Manchurian” region of the Northeast, as well as the base of Russia’s Pacific Fleet and its “Window to Asia” in Vladivostok, though the exact consequences are again subject to the atmospheric ramifications resulting from the scope and scale of any speculative American nuclear bombing of North Korea.

  One of the relevant tangential developments that could unfold is that China’s domestic agricultural industry could collapse, and this could combine with the widespread fear resulting from the nearby radioactive panhandle to produce unpredictable socio-political consequences in the People’s Republic.

  Furthermore, the nuclear destruction of North Korea and the attendant apocalyptic aftereffects that this would have for Northeast Asia would for all intents and purposes remove each of these victimized nation-states from the geopolitical game except for perhaps Russia, seeing as how they’d all be wreaked with internal turmoil in dealing with the long-term radioactive fallout of what happened, thus restoring the US to its immediate post-World War II “glorious” position in recapturing the majority of the global economy and literally “Making America Great Again”.

  It’s precisely this “reward” that is so tempting to Trump and why his finger is itching to press the nuclear button, but then again he’s still held back by the thought of the quarter-million American lives that might have to be sacrificed as a result, though he might “console” himself with the “excuse” that this was “necessary” in order for the remaining 320+ million to “rule the world”.

  As for the millions upon millions of Asians who would surely die in this scenario, Trump would “rationalize” it by convincing himself that he was taking North Korean “slaves” “out of their misery” and that all the others who allowed Kim Jong Un to “get out of control” and launch what the Pentagon might provoke to be Pyongyang’s first strike “deserved it”, shedding all personal responsibility for this by claiming that he “inherited an impossible mess” from his hated predecessors who already made its dynamics “irreversible” and therefore its conclusion “inevitable”.

  The only realistic chance that Trump can be stopped from nuking North Korea in the event that he “gets over” the potential deaths of a quarter-million Americans (considering that the deaths of Asians aren’t anything that he cares about) and/or is misled into thinking that North Korea is on the cusp of launching its own imminent first strike (or was provoked into doing so) is if Russia and China convey the message to the US — whether openly or discretely — that they will respond with nuclear weapons if Washington dares to use them.

  This brinksmanship would be very dangerous because there’s no telling whether Kim Jong Un would introduce nukes into any forthcoming conflict first, though from Pyongyang’s perspective it would have to in order to ensure its survival or “go out with a bang” like it’s been threatening, resultantly giving the US a semi-“plausible” right to respond in kind, albeit much more disproportionately.

  However much some people may wish, it is unlikely that Russia and/or China would go to nuclear war against the US over North Korea, especially in the event that Pyongyang used nukes first (whether justifiably or not), and in spite of the long-term radioactive fallout that could devastate their two countries (China much more so than Russia in this case).

  In addition, it can be assured that any US nuclear (counter-)attack against North Korea would be preceded by the scrupulous monitoring of all Chinese nuclear assets “just in case”, meaning that Washington would be on “red alert” to nuke China if Washington thought that Beijing was about to bomb its overseas bases or homeland in preemptive response for the deadly radioactive future that the US would be giving it, thus representing an unimaginably dangerous situation fraught with the risk of even the smallest misstep leading to a nuclear war between the US and China and further diminishing the chance that Beijing would strike back.

  All in all, Trump is proving himself to be the consummate risk-taker who’s not afraid to up the stakes in any situation, and a thorough read of his personality proves that he wouldn’t shy away from using nuclear weapons against North Korea, deeply believing that it’s the key to “Make America Great Again” even if this would run the chance of a nuclear war with China too.

  Trump is a modern-day Machiavelli who doesn’t care about morals, ethics, and principles when it comes to advancing his country’s grand strategic interests on the world stage, but it’s because of the little bit of “humanity” that’s still left within him in caring about the fate of a quarter-million Americans that he has yet to push the nuclear red button that’s sitting so tantalizingly close on his desk.

  

• Why Hackers Hack: Visualizing The Motives Behind Cyberattacks

  Cyberattacks caused $450 billion of damage to the global economy in 2016, and this number is predicted to keep rising as we keep adding more connected devices to the mix.

  As Visual Capitalists’s Jeff Desjardins notes, the magnitude of this impact should not be understated. It’s bigger than the size of notable economies like the UAE ($371B) or Norway ($370B) – which is why it’s no surprise to see organizations putting major resources to shore up their internal defenses and to reduce the risk of threats.

  But while the origins of this cybersecurity boom may be clear, what is less obvious is why all of this hacking is happening in the first place.

  Why do hackers hack, and what are the motives behind these powerful cyberattacks?

  WHY HACKERS HACK

  Today’s infographic comes to us from Raconteur, and it breaks down the statistics from a couple of large global studies on cybersecurity.

  

  Courtesy of: Visual Capitalist

   

  One of the first datasets shown comes from Radware, showing the motives behind why hackers hack:

  • Ransom (41%)
  • Insider threat (27%)
  • Political reasons (26%)
  • Competition (26%)
  • Cyberwar (24%)
  • Angry user (20%)
  • Motive unknown (11%)

  Interestingly, ransom is a top motive at 41% – but other reasons like politics, competition, and cyberwar were pretty evenly distributed in the mix as well.

  Verizon, in their 2017 Data Breach Investigations Report, break down the motives of hackers in a different way. Using the three wider categories of “Financial”, “Espionage” and “Fun, Ideology, or Grudge (FIG)”, here is how cyberattacks look over time:

   

  

  Most notably, espionage appears to be on the rise.

  That’s significant, because over 50% of hacks already come from organized criminal groups, and close to 20% originate from state-affiliated actors. With espionage becoming a more common motive, it suggests that cyberattacks will continue getting more sophisticated and deliberate, and that specialized teams of hackers are executing a growing percentage of the attacks.

  (For a real-time view of this espionage in action, make sure to watch cyberwarfare happening in real-time.)

  WHO AND WHY?

  Hackers hack for a multitude of different reasons.

  However, it does seem that the actors and motives for hacking are gradually shifting over time. Fewer cyberattacks today have FIG motives (fun, ideology, grudge), and more attacks are increasingly tied to espionage.

  With more deliberate, determined, sophisticated, and team-based attackers – it’s no wonder that the cybersecurity industry is growing at a 9.5% annual clip.

  

• A Tale Of Two Americas: Where The Rich Get Richer And The Poor Go To Jail

  Authored by John Whitehead via The Rutherford Institute,

  This is the tale of two Americas, where the rich get richer and the poor go to jail.

   

  

  Aided and abetted by the likes of Attorney General Jeff Sessions—a man who wouldn’t recognize the Constitution if it smacked him in the face—the American dream has become the American scheme: the rich are getting richer and more powerful, while anyone who doesn’t belong to the power elite gets poorer and more powerless to do anything about the nation’s steady slide towards fascism, authoritarianism and a profit-driven police state.

  Not content to merely pander to law enforcement and add to its military largesse with weaponry and equipment designed for war, Sessions 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.

  Now Sessions has given state courts the green light to resume their practice of jailing individuals who are unable to pay the hefty fines imposed by the American police state. In doing so, Sessions has once again shown himself to be not only a shill for the Deep State but an enemy of the people.

  First, some background on debtors’ prisons, which jail people who cannot afford to pay the exorbitant fines imposed on them by courts and other government agencies.

  Congress banned debtors’ prisons in 1833.

  In 1983, the U.S. Supreme Court ruled the practice to be unconstitutional under the Fourteenth Amendment’s Equal Protection clause.

  Where things began to change, according to The Marshall Project, was with the rise of “mass incarceration” when we started to imprison more people for lesser crimes.

  By the late 1980s and early 90s, “there was a dramatic increase in the number of statutes listing a prison term as a possible sentence for failure to repay criminal-justice debt.” During the 2000s, the courts started cashing in big-time “by using the threat of jail time – established in those statutes – to squeeze cash out of small-time debtors.”

  Fast-forward to the present day which finds us saddled with not only profit-driven private prisons and a prison-industrial complex but also, as investigative reporter Eli Hager notes, “the birth of a new brand of ‘offender-funded’ justice.”

  Follow the money trail. It always points the way.

  Whether you’re talking about the government’s war on terrorism, the war on drugs, or some other phantom danger dreamed up by enterprising bureaucrats, there is always a profit-incentive involved.

  The same goes for the war on crime.

  At one time, the American penal system operated under the idea that dangerous criminals needed to be put under lock and key in order to protect society. Today, the flawed yet retributive American “system of justice” is being replaced by an even more flawed and insidious form of mass punishment based upon profit and expediency.

  Sessions’ latest gambit plays right into the hands of those who make a profit by jailing Americans.

  Under such a system, the plight of the average American is measured in dollars and cents.

  This is not justice.

  This is yet another example of how greed and profit-incentives have not only perverted policing in America but have corrupted the entire criminal justice system.

  Unfortunately, the criminal justice system has been operating as a for-profit enterprise for years now, covertly padding its pockets through penalty-riddled programs aimed at maximizing revenue rather than ensuring public safety.

  All of those seemingly hard-working police officers and code-enforcement officers and truancy officers and traffic cops handing out ticket after ticket after ticket: they’re not working to make your communities safer—they’ve got quotas to fill.

  Same goes for the courts, which have come to rely on fines, fees and exorbitant late penalties as a means of increased revenue. The power of these courts, magnified in recent years through the introduction of specialty courts beyond your run-of-the-mill traffic court (drug court, homeless court, veterans court, mental health court, criminal court, teen court, gambling court, prostitution court, community court, domestic violence court, truancy court), is “reshaping the American legal system—with little oversight,” concludes the Boston Globe.

  And for those who can’t afford to pay the court fines heaped on top of the penalties ($302 for jaywalking, $531 for an overgrown yard, or $120 for arriving a few minutes late to court), there’s probation (managed by profit-run companies that tack on their own fees, which are often more than double the original fine) or jail time (run by profit-run companies that charge inmates for everything from food and housing to phone calls at outrageous markups), which only adds to the financial burdens of those already unable to navigate a costly carceral state.

  Ask yourself this: at a time when crime rates across the country remain at historic lows (despite Sessions’ inaccurate claims to the contrary), why does the prison population continue to grow?

  The prison population continues to grow because of a glut of laws that criminalize activities that should certainly not be outlawed, let alone result in jail time. Overcriminalization continues to plague the country because of legislators who work hand-in-hand with corporations to adopt laws that favor the corporate balance sheet. And when it comes to incarceration, the corporate balance sheet weighs heavily in favor of locking up more individuals in government-run and private prisons.

  It’s a vicious cycle that grows more vicious by the day.

  Now you can shrug all of this away as a consequence of committing a crime, but that just doesn’t cut it. Especially not when average Americans are being jailed for such so-called crimes as eating SpaghettiOs (police mistook them for methamphetamine), not wearing a seatbelt, littering, jaywalking, having homemade soap (police mistook the soap for cocaine), profanity, spitting on the ground, farting, loitering and twerking.

  There is no room in the American police state for self-righteousness. Not when we are all guilty until proven innocent.

  As I make clear in my book Battlefield America: The War on the American People, 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 debtors’ prison guarded by a phalanx of politicians, bureaucrats and militarized police with no hope of parole and no chance for escape.

  

• Comey's Original Clinton Memo Revealed, Shows Deletions Of Felony Evidence

  For months, speculation has swirled around what exactly former FBI Director James Comey said about Hillary Clinton’s private email server (and handling of classified material). While much has been leaked, and admitted to, thanks to Senate Homeland and Government Affairs Committee Chairman Ron Johnson (R-Wis.), we now have the complete original Comey statement… and the subsequent rounds of deletions and edits that watered down the felonious Clinton actions to an embarrassing wrist-slap.

   

  

  The Hill was first to report late last year that Comey originally concluded Clinton was “grossly negligent” – the statutory term supporting felony mishandling of classified information – when she and her aides transmitted 110 emails containing classified information through her nonsecure server but that subordinates edited the term to the lesser “extremely careless.”

  As The Hill reports, the full draft, with edits, leaves little doubt that Comey originally wrote on May 2, 2016 that there was evidence that Clinton and top aides may have violated both felony and misdemeanor statutes, though he did not believe he could prove intent before a jury.

  Full Draft:

  As the document also shows, Comey’s original statement was edited by subordinates to remove five separate references to terms like “grossly negligent” and to delete mention of evidence supporting felony and misdemeanor violations.

  For example, as The Hill notes, Comey originally wrote:

  “Although there is evidence of potential violations of the statute proscribing gross negligence in the handling of classified information and of the statute proscribing misdemeanor mishandling, my judgment is that no reasonable prosecutor would bring such a case.”

  That passage, however, was subsequently edited to remove the references to “gross negligence” and “misdemeanor mishandling,” leaving a much more generic reference to “potential violations of the statutes.”

  “Although we did not find clear evidence that Secretary Clinton or her colleagues intended to violate laws governing the handling of classified information, there is evidence that they were extremely careless in their handling of very sensitive, highly classified information.”

  Remarkably, though the original statement was written on May 6th 2016, Comey did not hold his infamous press conference until two months later… once all the edits were in.

  As Senator Johnson exclaimed, “the edits to Director Comey’s public statement, made months prior to the conclusion of the FBI’s investigation of Secretary Clinton’s conduct, had a significant impact on the FBI’s public evaluation of the implications of her actions,” adding that…

  “this effort, seen in light of the personal animus toward then-candidate Trump by senior agents leading the Clinton investigation and their apparent desire to create an ‘insurance policy’ against Mr. Trump’s election, raise profound questions about the FBI’s role and possible interference in the 2016 presidential election.”

  Rigged, indeed…

  

• China Dominates Global Skyscraper Construction

  Last year, skyscraper construction soared to new heights.

  In 2017, 144 new buildings 200 meters (660 feet) or taller were built, including 15 “supertall buildings” at least 300 meters (980 feet) high, according to data published by The Council On Tall Buildings and Urban Habitat.

  But,  as Statista’s Niall McCarthy notes, nowhere came close to China for new skyscrapers where 76 buildings were completed at 200 meters tall or higher.

  

  You will find more statistics at Statista

  The U.S. was a distant second, constructing only ten skyscrapers by comparison.

  South Korea came third with seven while interestingly, neighboring North Korea built four.

  The isolated regime built the country’s four newest skyscrapers at the Ryomyong residential complex in Pyongyang with the tallest stretchting over 270 meters.

  That is some distance short of the highest building constructed in 2017 which was topped out at 599 meters (1,965 feet). That’s China’s 115 floor Ping An Finance Center in Shenzhen which boasts 459,525 square meters of space. The second tallest building of last year is The Lotte World Tower in Seoul, South Korea while the third is Dubai’s Marina 101.

  

• The 20 Most "Jaw-Dropping" Claims From Explosive New Trump Book

  The Daily Mail has compiled a list of 20 of the most “jaw-dropping” claims contained in the new book by author Michael Wolff – who was served with a cease-and-desist letter along with former Trump strategist Steve Bannon – and who was warned that legal action is imminent.

  As we noted earlier, the book which was originally scheduled for publication next week, has been accelerated for broad release to Friday to capitalize on the widespread controversy it has generated, not to mention free publicity courtesy of the White House.

  One thing to note: numerous media peers of Wolff’s have already expressed skepticism about the book’s accuracy and contents, which is why it will be up to the reader to determine if to buy it from the fiction or non-fiction section.

  And so, without further ado, or commentary, is the list: 

  1. Steve Bannon described Don Jr’s Trump Tower meeting with Russians as ‘treasonous and unpatriotic’ and thinks he will ‘crack like an egg’ under the pressure of the Russia investigation
  2. Bannon said there’s ‘zero’ chance Donald Trump didn’t know about the meeting and said Don Jr likely ‘walked them to his father’s office’
  3. First Lady Melania Trump openly wept on the night her husband won the election – and the tears ‘were not of joy’
  4. The whole campaign from the top down thought Trump would lose and everyone had planned for defeat, with Trump himself planning a TV network because he would be ‘the most famous man in the world’ 
  5. Trump and Melania sleep in separate bedrooms and he demanded a lock on his bedroom door against the wishes of the Secret Service
  6. Trump orders McDonald’s so he’s not poisoned, told staff not to touch his toothbrush and strips his own bedsheets  
  7. Trump regularly sits in bed eating a cheeseburger at 6.30pm while calling his friends and watching three TVs 
  8. Rupert Murdoch called Trump a ‘f***ing idiot’ after a phone call and billionaire backer Tom Barrack said ‘he’s not only crazy, he’s stupid’ 
  9. Trump’s aides say he doesn’t read and ‘for all practical purposes is no more than semi-literate’ 
  10. Trump would try to bed his friends’ wives by goading their husbands to cheat while the wife listened in on speakerphone
  11. White House Communications Director Hope Hicks dated married Corey Lewandowski and Trump later told her: ‘You’re the best piece of tail he’ll ever have.’
  12. The president called acting attorney general Sally Yates a ‘c***’ after she refused to enforce his immigration ban
  13. Sean Spicer, then press secretary, said ‘you can’t make this s*** up’ after his first briefing and went on adopt the phrase as his personal mantra
  14. Trump tells the same stories three times in ten minutes and forgot a succession of old friends’ names at a Mar-a-Lago party
  15. He called Jared Kushner a ‘suck-up’ and said he should never have let Ivanka and her husband move to Washington
  16. Among his verdicts on his staff: Bannon ‘looked like s***’, Reince Priebus was a midget and Kellyanne Conway was a crybaby
  17. Among his staff’s verdicts on him: ‘dope’, ‘dumb as s***’, ‘hopeless idiot’, ‘just a f***ing fool’, ‘lost his mind’, ‘incapable of functioning in his job’
  18. Trump wondered what a ‘golden shower’ was after reading reports about the notorious Russian dossier
  19. Trump offered to marry Morning Joe’s Mika Brzezinski and Joe Scarborough – and mocked Jared Kushner for saying he’d do it
  20. Ivanka Trump jokes with friends about her father’s hair secrets: He had a scalp reduction, combs over from the sides, and uses Just for Men badly

  

• Pepe Escobar: Why There Won't Be A Revolution In Iran

  Authored by Pepe Escobar via The Asia Times,

  Iranian President Hassan Rouhani did the right thing going on television and at least acknowledging popular anger over hard economic times.

  

  Inflation is high at 12% but down from 40% at the start of Rouhani’s first term. And the recent increase in fuel and food prices by up to 40% has hardly helped.

  That was part of Team Rouhani’s 2018 budget, which cuts subsidies for the poor – a key feature of the previous Ahmadinejad administration.

  Then there is youth unemployment, which hovers around the 30% mark. Similar figures recently came out of Spain, a member of the European Union. Of course, that explains why the bulk of the protesters are under 25 from working class backgrounds.

  What Rouhani should have explained to Iranians in detail is the direct consequences of hard economic times and United States sanctions, which are affecting the country.

  These were coupled with financial threats against western firms now back in business, or at least contemplating opening up operations, in Iran.

  Rouhani did promise after signing the Joint Comprehensive Plan of Action, also known as the Iran nuclear deal, in the Austrian capital of Vienna in 2015 that it would lead to more jobs and stimulate the economy.

  While that has not been the case, legitimate protests singling out economic problems have never gone away. In fact, they have been part of the Iranian picture for decades.

  If we consider the Islamic Republic experiment, a sort of “theocracy with democratic characteristics,” the most striking element is how deeply rooted it is in the country.

  I learned this during my many trips to Iran and it has a great deal to do with the basij, or voluntary militias. They have permeated all aspects of social life from unions to student bodies and civil servant groups.

  In this respect, there is a strong similarity to China, where the Communist Party is embedded in the very fabric of society.

  Talking to young people in places such as Kashan or Mashhad showed me how solid the popular base was behind the Islamic Republic experiment. It was certainly more thought-provoking than listening to ayatollahs in Qom.

  Still, what is happening now in Iran is that legitimate protests related to economic hardships have been hijacked by the usual suspects in a move to influence the minority. After all, Rouhani’s administration is comparatively liberal compared to the populist Ahmadinejad government.

  So, what we have is a concerted attempt to turn legitimate protests into a “revolutionary” movement with the aim of bringing about a regime change. In all practical purposes, this would be civil war.

  Well, it will simply not work. Anyone familiar with Iran knows the country’s civil society is far too sophisticated to fall into such a crude and obvious trap.

  For a clear take on the foreign influence angle, you should watch Professor Mohammad Marandi, of the University of Tehran, an academic of absolute integrity, arguing with a former BBC employee on the Qatari-owned Al Jazeera television network.

  Indeed, what is certain is that foreign elements are acting as provocateurs to influence the protests. This “whole world is watching” tone is meant to intimidate Tehran’s response.

  Yet there has to be a crackdown against the violence as Rouhani strongly hinted. Imagine the police response if the level of violence seen on Iranian streets was happening in France or Germany?

  Regime change is unlikely but what is in play is setting the scene for a further renewal of economic sanctions against Iran. Possibly, in this case by the EU. Hopefully, it will not fall into this trap.

  Anyway, Tehran is already gearing up to increase business across Eurasia through China’s new Silk Roads, the Belt and Road Initiative, and the Eurasia Economic Union.

  In the end, it is up to Team Rouhani to be creative in alleviating the burden on the economic front.

  

• FBI Launches New Investigation Into The Clinton Foundation

  Exactly two weeks after we reported that Attorney General Jeff Sessions instructed DOJ prosecutors to dig into the FBI’s handling of the Uranium One investigation, we learn that the FBI has opened a new investigation of the Clinton Foundation launched by the DOJ – spearheaded by its Little Rock, Arkansas field office, according to John Solomon of The Hill. 

  

  The probe will focus on pay-for-play schemes and tax code violations, according to law enforcement officials and a witness who wishes to remain anonymous. 

  The officials, who spoke only on condition of anonymity, said the probe is examining whether the Clintons promised or performed any policy favors in return for largesse to their charitable efforts or whether donors made commitments of donations in hopes of securing government outcomes.

  The probe may also examine whether any tax-exempt assets were converted for personal or political use and whether the Foundation complied with applicable tax laws, the officials said. –The Hill

  The witness who was interviewed by Little Rock FBI agents said that questions focused on “government decisions and discussions of donations to Clinton entities during the time Hillary Clinton led President Obama’s State Department,” and that the agents were “extremely professional and unquestionably thorough.”

  Also of note, as tweeted by WikiLeaks and reported by the Dallas Observer, the Clinton Foundation has been under investigation by the IRS since July, 2016 after 64 GOP members of congress received letters urging them to push for an investigation. The investigation is being handled by their Dallas office – far away from Washington insiders.

  

  The Earle Cabell Federal Building in downtown Dallas is an all purpose office complex, a bastion of federal bureaucracy located at 1100 Commerce St. Most people come for a passport or to get business done in front of a federal judge. But inside, a quiet review is underway that has direct ties to the raging presidential election: The local branch of the IRS’ Tax Exempt and Government Entities Division is reviewing the tax status of the Bill, Hillary and Chelsea Clinton Foundation.

  A spokesman for both Hillary Clinton and the Clinton Foundation did not return The Hill‘s calls or emails seeking comments, however they have previously maintained that the Clintons never traded government policy decisions for donations – calling recent focus on the issue a “conservative distraction” from President Trump’s Russia probe.

  Of primary interest to the FBI is likely the Uranium One deal, which would grant the Kremlin control over 20 percent of America’s uranium supply, as detailed by author Peter Schweitzer’s book Clinton Cash and the New York Times in 2015. The scheme allowed Russia to buy its way into the U.S. atomic energy business using the same Clinton Foundation pay-for-play relationship used by 16 countries, including Saudi Arabia – which received a 143% increase in weapons sales over the previous administration after donating to the foundation. 

  A brief timeline of the Uranium One deal: 

  • Between 2008 – 2010, parties involved with Uranium One donated $145 Million to the Clinton Foundation. You can read more about the parties here.
  • June 2009, Russian State Nuclear Agency Rosatom (through a subsidiary) takes a 17% stake in Uranium One.
  • June 2010, Rosatom takes majority (51%) ownership of Uranium One, granting the Kremlin control over 20 percent of U.S. uranium – which Hillary Clinton’s State Department signed off on. The FBI uncovers massive bribery scheme before the Committee on Foreign Investment in the United States (CFIUS) approves deal.
  • June 29th, 2010, Bill Clinton meets with Vladimir Putin at his home in Russia. Later that day Clinton earns $500,000 for a Moscow speech to Kremlin-linked investment bank Renaissance Capital, which assigned a “buy” rating to Uranium One stock.
  • January 2013,  Rosatom State Nuclear Agency acquires the remainder of Uranium one and takes it private.

  Also of interest in relation to the Uranium One deal is the fact that weeks after the FBI probe into Hillary Clinton’s email began, the FBI issued notices to every agency in the CFIUS to preserve records, as discovered by Twitter researcher Katica while looking at FOIA-requested documents.

  

  The agencies which received the request included the Nuclear Regulatory Commission, the U.S. Dept. of Treasury, the Office of Director of National Intelligence (ODNI James Clapper), The National Counter Terrorism Center, and the U.S. Department of Energy (DOE).

  Five days after the initial request, the same FBI agent sent another round of notifications to the same agencies, adding the National Security Agency (NSA) and the U.S. Secret Service (USSS). The next day, September 3rd, 2015, three more agencies were added to the preservation request: The CIA, the Defense Intelligence Agency (DIA) and the Department of Defense (DOD)

  At this point, every single member of the Committee on Foreign Investment in the United States (CFIUS) which signed off on the Uranium One deal was served with a notice to preserve records. 

  * * *

  Another report by The Hill from November reveals that an undercover FBI informant in the Russian nuclear industry who was made to sign an “illegal NDA” by former AG Loretta Lynch, claims to have video evidence showing Russian agents with briefcases full of bribe money related to the controversial Uranium One deal – according to The Hill investigative journalist John Solomon and Circa‘s Sara Carter.

  The informant, whose identity was revealed by Reuters as William D. Campbell, will testify before congress next week after the NDA which carried the threat of prison time was lifted. Campbell, originally misidentifed by Reuters as a lobbyist is actually a nuclear industry consultant who is currently battling cancer. 

  As previously reported, Campbell was deeply embedded in the Russian nuclear industry where he gathered extensive evidence of a racketeering scheme involving bribes and kickbacks.

  “The Russians were compromising American contractors in the nuclear industry with kickbacks and extortion threats, all of which raised legitimate national security concerns. And none of that evidence got aired before the Obama administration made those decisions,” a person who worked on the case told The Hill, speaking on condition of anonymity for fear of retribution by U.S. or Russian officials. –The Hill

  Campbell’s attorney, former Regan Justice Department official Victoria Toensing, previously told Fox Business host Lou Dobbs “He can tell what all the Russians were talking about during the time that all these bribery payments were made.”

  WikiLeaks also revealed that the house of Saud heavily contributed to the Clinton Foundation, and reports surfaced that they funded 20% of Clinton’s campaign.

  

  Indeed, it appears that the Saudis – the old “pre-crackdown” Saudis of course, who wouldn’t let women drive cars, were hoping for a significant return on their investment under a Hillary Clinton White House with John Podesta ostensibly in the Secretary of State role – similar to the 143% increase in weapons sales granted to the Kingdom and other Clinton-foundation friendly governments while Hillary Clinton was Secretary of State. 

  As reported by International Business Times: 

  The Clinton-led State Department also authorized $151 billion of separate Pentagon-brokered deals for 16 of the countries that donated to the Clinton Foundation, resulting in a 143 percent increase in completed sales to those nations over the same time frame during the Bush administration.

  It’s clear they had a lot riding on Hillary, some say in the hopes of co-opting the US military into an intervention in Syria to topple President Bashar al-Assad. The plan was regime change – with the goal of installing yet another Western friendly puppet government which would rubber-stamp a lucrative Saudi/Qatar pipeline through the country, exiting into the Mediterranean through Turkey – as opposed to a competing Russian / Iranian / Syrian pipeline.

  

  Moreover, WikiLeaks exposed the fact that Saudi Arabia and Qatar funded ISIS – which then invaded Syria in an effort to co-opt the Arab spring and topple Assad. Recall that Hillary’s plan was to join ISIS in this fight, starting with the institution of a “no fly” zone which would have put the United States in direct conflict with Russia.

  There was also, of course, the $1 million check Qatar gave to Bill Clinton on his birthday, as disclosed by WikiLeaks, in which Amitabh Desai, the Clinton Foundation’s director of foreign policy, writes to senior Clinton Foundation officials explaining the “summary of key points” from his meetings with the “Ambassadors from Qatar, Brazil, Peru, Malawi, and Rwanda, in Washington, DC.”

  Describing his meeting with the ambassador of Qatar, Desai wrote, “Would like to see WJC [William Jefferson Clinton] ‘for five minutes’ in NYC, to present $1 million check that Qatar promised for WJC’s birthday in 2011.”

  It gradually becomes clear that Hillary Clinton was set to use United States military assets at the behest of Saudi Arabia – first for regime change in Syria, and then in Saudi Arabia’s confict with Yemen as the next logical target. It also emerged that Hillary’s right hand woman Huma Abedin has had alleged ties to the Muslim Brotherhood which still haven’t been investigated. John McCain, interestingly enough, chastised Rep. Michele Bachman (R-MN) for pointing this out. In addition, a former Muslim Brotherhood member turned peace activist, Walid Shoebat said in an interview with Front Page Magazine:

  The Abedins for decades were actually serving a foreign entity, the government of Saudi Arabia’s Ministry of Islamic Affairs, and not American Democracy as President Obama stated. -FrontPage

  With all that said, and there is much more (to scrape the surface read “Clinton Foundation Is Charity Fraud Of Epic Proportions”, Analyst Charges In Stunning Takedown“, it appears that the FBI should have its hands full re-investigating the Clinton Foundation. Perhaps Attorney General Sessions will even ensure that Clinton loyalists within the organization aren’t responsible for things such as; reaching conclusions, recommending charges, closing investigations and changing language which would exonerate otherwise very illegal behavior. 

  

• Yale Shrink Tells Lawmakers Trump Is "Uncontainable, Going To Unravel" In Renewed 25th Amendment Push

  Over a dozen lawmakers met with a Yale psychiatry professor for two days to meet and confer over President Trump’s mental fitness – continuing a campaign by Democrats launched nearly a year ago to review the 25th Amendment and try to remove Trump from office. 

   

  

  Dr. Brandy X. Lee told Congressional Democrats (and one Republican) on Dec. 5 and 6 that President Trump is “going to unravel, and we are seeing the signs,” reports Politico.

  In an interview, she pointed to Trump “going back to conspiracy theories, denying things he has admitted before, his being drawn to violent videos.” Lee also warned, “We feel that the rush of tweeting is an indication of his falling apart under stress. Trump is going to get worse and will become uncontainable with the pressures of the presidency.”

  Around the same time, Rep Ted Lieu (D-Calif.) said he planned to introduce legislation that would require the presence of a psychiatrist or psychologist in the White House – which went nowhere, while Rep. Earl Blumenauer (D-Ore.) in a floor speech this week called for a review of the Constitution’s procedures for removing a president. He warned the 25th Amendment of the Constitution falls short when it comes to mental or emotional fitness for office.

  In October, billionaire Tom Steyer too out a prime time ad during the World Series, urging the country to impeach Trump, who is “a clear and present danger who’s mentally unstable and armed with nuclear weapons…“

  Trump was not impressed…

  Wacky & totally unhinged Tom Steyer, who has been fighting me and my Make America Great Again agenda from beginning, never wins elections!

  — Donald J. Trump (@realDonaldTrump) October 27, 2017

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  So, what’s Article 4 to the 25th Amendment? As we noted last year, the amendment itself is about presidential succession, and includes language about the power of the office when a president is incapacitated. But Digby recently highlighted the specific text of growing relevance:

  “Whenever the Vice President and a majority of either the principal officers of the executive departments or of such other body as Congress may by law provide, transmit to the President pro tempore of the Senate and the Speaker of the House of Representatives their written declaration that the President is unable to discharge the powers and duties of his office, the Vice President shall immediately assume the powers and duties of the office as Acting President.”

  What does that mean exactly?

  Well, it means Congress isn’t the only institution that can remove a president from office between elections. Under the 25th Amendment, a sitting vice president and a majority of the executive branch’s cabinet could, on their own, agree to transfer power out of the hands of a sitting president. At that point, those officials would notify Congress, and the vice president would assume the office as the acting president.

  And what if the challenged president wasn’t on board with the plan to remove him/her from the office? According to a recent explainer, “If the president wants to dispute this move, he can, but then it would be up to Congress to settle the matter with a vote. A two-thirds majority in both houses would be necessary to keep the vice president in charge. If that threshold isn’t reached, the president would regain his powers.” All of this comes up in fiction from time to time, and in all likelihood, Americans will probably never see this political crisis play out in real life. And that’s probably a good thing: by all appearances, the intended purpose of the constitutional provision was to address a president with a serious ailment – say, a stroke, for example – in which he or she is alive, but unable to fulfill the duties of the office.

  And nearly a year later, Democrats and never-Trumpers are still working on a “soft palace coup” with the assistance of the MSM. As we noted in February of 2017, we expected such speculation will only get louder – and here we are, once again. 

  .@JudgeJeanine: “The American people voted for [@realdonaldTrump] because he makes sense to them.” pic.twitter.com/dCV4HqCyBn

  — FOX Business (@FoxBusiness) February 17, 2017

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• Who's Really Got The Biggest Nuclear Button?

  Currently, there are an estimated 14,555 nuclear warheads in the hands of just nine countries.

  Statista’s Martin Armstrong points out that at the top of the list, as compiled by the Federation Of American Scientists (FAS), are of course Russia and the U.S.With a combined arsenal of over 13,000, this particular hangover from the Cold War is still plain to see.

  Up to now the two have been undergoing programs of disarmament – of this 13,400, over 5,000 are officially retired and awaiting dismantlement.

  In Kim Jong-un’s New Year’s Day speech, he claimed that North Korea’s nuclear forces are now “completed”, stating that the nuclear launch button is always within his reach.

  The FAS does indeed estimate that the country is in possession of between 10 to 20 warheads.

  In response to the claim, U.S. President Trump fired back, pointing out that his button is “much bigger & more powerful” – something which can not be disputed, as the infographic  below shows…

  

  You will find more statistics at Statista

  

• Brandon Smith Asks "Will Manliness Make A Comeback In 2018?"

  Authored by Brandon Smith via Alt-Market.com,

  Men embracing their masculinity and biological heritage has not been the easiest path the past few years, at least, for those who care about being labeled a “toxic” curse hanging over the history of the world.

   

  

  For me, frankly, I am indifferent to the gnashing and wailing of feminists and the social justice cult. They are a paper tiger and always have been. Beyond that, it’s almost impossible to live in rural Montana without being a capable man (or living in a family with capable men), so even if I wanted to become some kind of liberal my-little-pony metrosexual, the environment simply would not allow for it. I would get eaten alive, or I would have to leave.

  It is this lesson above all else that I would like to impart here — masculinity can only be abandoned when the environment is sterilized and controlled and entirely “safe.” Put any feminist out in an uncontrolled and dangerous environment (like the wilderness) for a few weeks, and it won’t be long before they will beg for someone with all those “toxic” masculine traits to come and help them.

  In fact, though scientists rarely undertake any social experiments to explore this reality (due to science in our era being heavily tainted by identity politics and liberal bias), there are many examples of the vast differences between genders on display in survival shows such as the Bear Grylls show ‘The Island’.  The British reality series originally featured a group of thirteen men left on an island with nothing but a few tools and the clothes on their backs. Their goal?  Work together to survive for one full month.

  After accusations of “sexism”, the show started its next season with a group of men and a group of women given the same task.  The show had various versions and copycats in other nations, some featuring competitions between the men and the women, but the end result was invariably the same regardless of the country.

  While having their own setbacks, the men’s groups do decidedly better in every case, not just because of superior strength, but also superior organizational ability (an evil masculine trait).  In the American ‘Survivor’ version of this experiment, which had the groups in proximity to each other, the women inevitably depended on the men for aid.

  The reality is, when push comes to shove society cannot function without psychological traits that are decidedly masculine.  This is why matriarchal (or feminized) societies generally collapse or are highly dysfunctional and regressive.  For an example outside of the jungle, read this article by a female entrepreneur who had a utopian idea to build a company made up only of women – a company which suffered complete gridlock and bankruptcy only two years later from employee discord and laziness.

  Because of the inadequacies of a culture without strong male presence, feminism and “social justice” as ideologies instantly lend themselves to socialism and collectivism. In fact, it’s hard to separate one from the other.

  Socialism provides the governmental and legal bubble that helps to protect people who cannot or will not protect themselves, and collectivism forces capable people (mostly men) to do all the hard labor necessary to keep a system functioning and safe “for the sake of the group,” whether they want to participate in that group or not. In the beginning this is done through taxation, entitlement programs and the centralizing of wages into metropolitan areas. In the end, it is done through unabashed slavery. If you want to see an example of this simply look up the end result of the Stalinist and Maoist models – a productive minority is always tasked (or forced) to feed, house and clothe the non-producing majority.

  And this is how these people hope to live out their entire lives — blissfully sheltered from unpredictable environments that require technical know-how, independent ingenuity or decisive and sometimes violent action.

  Feminism in particular seeks the destruction of all masculinity as a prerequisite to a supposedly safer world. To illustrate, take a look at this article published by the ever-establishment, ever-collectivist Bloomberg titled “How To Make Better Men.”

  The article is typical propaganda, falsely associating masculinity first with institutions that do not define masculinity as well as attitudes that are not necessarily only attributed to men. The goal here, of course, is the demonization of men in general through association with already-established negative events and symbols. Bloomberg ties men and male behavior to the scandal surrounding the recent string of accusations of sexual aggression in politics and Hollywood.

  To be sure, these institutions and industries in particular seem to attract a certain type of deviance, not that all the accusations made so far should be treated as fact. Prosecuting someone in the media and in the court of public opinion is not the same as prosecuting them in a court of law. The #MeToo movement is mostly a farce on par with the witch hunting displayed in The Crucible; relying solely on stirring the frothing fervor of the mob rather than generating facts and evidence.

  That said, the cases that do seem to be provable illustrate a pattern of narcissism and sociopathy common in the entertainment industry and in politics, and this is a problem among men AND women within these cultural structures. Just look at Hillary Clinton and her treatment of the women that threatened her husband’s career.

  And despite what feminists claim, narcissism and sociopathy are not inherently masculine traits. Many women display these character flaws constantly, but in slightly different ways from men.

  Is it wrong for a man to pressure a woman into sexual activity through leverage or force? Of course. But is this a “masculine” behavior, or a sociopathic behavior? Bloomberg and the feminists want to condition you to assume the two are interchangeable.

  Now, many other behaviors that have been wrongly attached to rape in order to demonize men are in fact masculine and are not negative. Is it an assault for a man to tell a woman on the street she looks good? No. Is it an assault to be direct with a woman or to pursue her for a relationship? No, as long as she doesn’t tell you to back the hell off then all is fair game. Is it an assault to look at a woman and think thoughts you would not share with your own mother (unless you are a freak)? No, not at all. In fact, you will find that many women PREFER a man that is direct over a man that walks on eggshells and is constantly apologizing for acting on what is biological and natural. It is feminists who are complaining about these behaviors, and feminists do not represent women in the slightest.

  How do feminists plan to weed out masculine behavior that has sustained civilization since the beginning of recorded time? They hope to accomplish this through public schools. First by propagandizing children (like Bloomberg propagandizes their readers) into believing that traditionally masculine behaviors are “bad.” Boys should be more calm in class, sit still, be quiet, less high strung, they should cry more and share their feelings, they should be admonished for playing violent games such as war with sticks and their imaginations, they should be taught to be vulnerable and less ambitious, they should be, for all intents and purposes, feminized.

  Make no mistake, there is a highly concerted effort in the public school system to enforce the feminist ideology by sinking their fangs into the next generation of men and “training” the manliness out of them. Of course, it seems to me that if these behaviors weren’t entirely natural, then the feminists would not have to put so much effort into an agenda to condition children to their side. Why not keep ideologies out of schools completely and let the children decide what comes naturally when they are older?

  Beyond the circus of sexual issues dominating the media for the past few weeks or the feminist final solution, I will say that the violence of action is indeed a predominantly masculine characteristic, and honestly, we need far more of it.

  It seems to me that feminism and social justice, whether knowingly or unknowingly, feed into the establishment power structure and allow it to thrive. Encouraging men to be weak, indecisive, indirect, fearful of group condemnation and fearful of their own aggression makes a society less secure and more malleable. Masculinity is often raw and unpredictable. It makes sense that potential tyrants would seek to diminish it so that they do not have to worry about sudden rebellion. In ancient times, invading armies would target the military age males of a culture and kill them off. They would then assimilate the women and children, and young boys would be raised to defend the banner of the conqueror.

  Today, this is being done in a different manner. Men are being castrated symbolically in media and film, or castigated through our educational system as a nuisance. We are being encouraged to abandon all the qualities that make us a threat to the establishment, in the name of social tranquility. But of course, in the end only the establishment benefits, and “tranquility” is certainly not guaranteed once we fall on our own swords.

  Believe it or not, though, I am hopeful.

  The tides have been turning against the feminists and the social justice cult lately. And contrary to popular belief, this is NOT because of Donald Trump. If anything, Trump’s popularity is merely a reflection of the vast and growing backlash against the extreme left and the cultural Marxism they promote.

  When there is a social backlash, it usually results in people immediately educating themselves on everything the offending movement originally condemned. Meaning, if the feminists hate it then it is probably good. Will this encourage men, and the millennial generation in particular, into finally pursuing technical prowess, physical and mental toughness, independence and self sufficiency, personal security and self defense and the ambition to build something better? Will our dwindling Western populations see a resurgence of child births? Will the newest Generation Z, growing up in the midst of an increasingly difficult economic environment, adhere to more masculine traits by necessity?

  If there is any indication of such a return to masculine roots, it will probably become visible in 2018 as the influence of the feminist agenda continues to wane. We shall see. If not, then the Western world is in dire trouble. For if we do not make manliness “fashionable” again and soon, it might be bred out of our culture entirely. And with this loss, a cultural death is guaranteed.

  

• Petro-Yuan Looms – How China Will Shake Up The Oil Futures Market

  The “huge story”,as Graticule’s Adam Levinson called it, will, it appears, be a “wake up call” for the West that seems to happily be ignoring this potential bombshell that is China’s looming launch of domestic oil futures trading.

  Additionally, Levison warns Washington that besides serving as a hedging tool for Chinese companies, the contract will aid a broader Chinese government agenda of increasing the use of the yuan in trade settlement… and thus the acceleration of de-dollarization and the rise of the Petro-Yuan.

  “I don’t think there’s any doubt we’re going to see use of the renminbi in reserves go up substantially”

  China has been planning this for a number of years and given rising tensions, now seems like a good time for China to flex a little.

  The Shanghai International Energy Exchange, a unit of Shanghai Futures Exchange, will be known by the acronym INE and will allow Chinese buyers to lock in oil prices and pay in local currency. Also, foreign traders will be allowed to invest — a first for China’s commodities markets — because the exchange is registered in Shanghai’s free trade zone. Even  Bloomberg admits there are implications for the U.S. dollar’s well-established role as the global currency of the oil market, as Sungwoo Park sums up some of the key questions…

  1. When will trading begin?

  According to the Shanghai-based news portal Jiemian, which cited an unidentified person from a futures company, trading is expected to start Jan. 18. Multiple rounds of testing have been carried out and all listing requirements met. The State Council, China’s cabinet, was said to have given its approval in December, one of the final regulatory hurdles. The push for oil futures gained impetus in 2017 when China surpassed the U.S. as the world’s biggest crude importer.

   

  

  2. Why is this important for China?

  Futures trading would wrest some control over pricing from the main international benchmarks, which are based on dollars. Denominating oil contracts in yuan would promote the use of China’s currency in global trade, one of the country’s key long-term goals. And China would benefit from having a benchmark that reflects the grades of oil that are mostly consumed by local refineries and differ from those underpinning Western contracts.

  3. How do oil futures work?

  Futures contracts fix prices today for delivery at a later date. Consumers use them to protect against higher prices down the line; speculators use them to bet on where prices are headed. In 2017, oil futures contracts in New York and London outstripped physical trading by a factor of 23. Crude oil is among the most actively traded commodities, with two key benchmarks: West Texas Intermediate, or WTI, which trades on the New York Mercantile Exchange, and Brent crude, which trades on ICE Futures Europe in London.

  4. Why didn’t China begin trading futures until now?

  Lower crude prices have played a part. Chinese oil futures were proposed in 2012 following spikes above $100 a barrel, but prices in 2017 have averaged little more than $50. There’s also concern over volatility. China introduced domestic crude futures in 1993, only to stop a year later because of volatility. In recent years, it repeatedly delayed its new contract amid turmoil in equities and financial markets. Such destabilizing moves have often prompted China’ government to intervene in markets in one way or another.

  5. What’s China’s track record in commodities?

  Nickel was the last major commodity to be listed there in 2015; within six weeks, trading in Shanghai surpassed benchmark futures on the London Metal Exchange, or LME. In China, speculators play a far greater role, boosting trading volumes but making markets susceptible to volatility. In early 2016, the then-head of the LME said it was possible some Chinese traders did not even know what they were trading as investors piled into everything from steel reinforcement bars to iron ore. Steep price rises relented when China intervened with tighter trading rules, higher fees and shorter trading hours.

  6. Will foreigners buy Chinese oil futures?

  That remains to be seen. Overseas oil producers and traders would need to swallow not just China’s penchant for occasional market interventions but also its capital controls. Restrictions on moving money in and out of the country have been tightened in the past two years after a shock devaluation of the yuan in 2015 prompted a surge in money leaving the mainland. Similar hurdles have kept foreign investors as bit players in China’s giant stock and bond markets.

  7. Could the yuan challenge the dollar’s dominance in oil?

  Not any time soon, since paying for oil in dollars is an entrenched practice, according to some analysts. Shady Shaher, head of macro strategy at Dubai-based lender Emirates NBD PJSC, says it makes sense in the long run to look at transactions in yuan because China is a key market, but it will take years. Bloomberg Gadfly columnist David Fickling argues that China doesn’t have “nearly the influence in the oil market needed to carry out such a coup.” On the other hand, paying in yuan for oil could become part of President Xi Jinping’s “One Belt, One Road” initiative to develop ties across Eurasia, including the Middle East. Chinese participation in Saudi Aramco’s planned initial public offering could help sway Saudi opinion toward accepting yuan, which is used in only about 2 percent of global payments.

  With regards that final point from Bloomberg, Pepe Escobar disagrees, recently concluding, the era of the petro-yuan is at hand…

  Intractable questions referring to the US dollar as top reserve currency have been discussed at the highest levels of JP Morgan for at least five years now. There cannot be a more politically charged dossier. The NSS duly sidestepped it.

  The current state of play is still all about the petrodollar system; since last year what used to be a key, “secret” informal deal between the US and the House of Saud is firmly in the public domain.

  Even warriors in the Hindu Kush may now be aware of how oil and virtually all commodities must be traded in US dollars, and how these petrodollars are recycled into US Treasuries. Through this mechanism Washington has accumulated an astonishing $20 trillion in debt – and counting.

  Vast populations all across MENA (Middle East-Northern Africa) also learned what happened when Iraq’s Saddam Hussein decided to sell oil in euros, or when Muammar Gaddafi planned to issue a pan-African gold dinar.

  But now it’s China who’s entering the fray, following on plans set up way back in 2012. And the name of the game is oil-futures trading priced in yuan, with the yuan fully convertible into gold on the Shanghai and Hong Kong foreign exchange markets.

  The Shanghai Futures Exchange and its subsidiary, the Shanghai International Energy Exchange (INE) have already run four production environment tests for crude oil futures. Operations were supposed to start at the end of 2017; but even if they start sometime in early 2018 the fundamentals are clear; this triple win (oil/yuan/gold) completely bypasses the US dollar.

  The era of the petro-yuan is at hand.

  Of course there are questions on how Beijing will technically manage to set up a rival mark to Brent and WTI, or whether China’s capital controls will influence it. Beijing has been quite discreet on the triple win; the petro-yuan was not even mentioned in National Development and Reform Commission documents following the 19^th CCP Congress last October.

  What’s certain is that the BRICS supported the petro-yuan move at their summit in Xiamen, as diplomats confirmed to Asia Times. Venezuela is also on board. It’s crucial to remember that Russia is number two and Venezuela is number seven among the world’s Top Ten oil producers. Considering the pull of China’s economy, they may soon be joined by other producers.

  Yao Wei, chief China economist at Societe Generale in Paris, goes straight to the point, remarking how “this contract has the potential to greatly help China’s push for yuan internationalization.”

  It ain’t over till the fat (golden) lady sings. When the beginning of the end of the petrodollar system – established by Kissinger in tandem with the House of Saud way back in 1974 – becomes a fact on the ground, all eyes will be focused on the NSS counterpunch.

  

• Houthi Forces Capture US Navy Spy Drone Off Yemen Coast

  While a major humanitarian crisis continues to unfold in Yemen as a result of a Saudi-led proxy war now approaching its fourth year, backed by US weapons and equipment which have increased threefold under President Trump, this remains a faceless and nameless conflict unlike the wars in Iraq, Libya, and Syria, with virtually no Western media coverage. As a result, most Americans would have trouble finding Yemen on a map.

  Amid the medial blackout, Al-Masdar News (AMN), an Arab world newspaper, reports the Houthi Navy has captured a U.S. underwater autonomous surveillance drone operating off the Yemeni coastline earlier this week.

  In the video, four Houthi men are seen seizing the REMUS 600 Autonomous Underwater Vehicle (AUV), designed for area searches, mine countermeasures, surveillance, and reconnaissance operations. The AUV is manufactured by a Norwegian-based defense firm Kongsberg, who received funding from the Office of Naval Research to support the Navy’s growing demand for AUVs. According to AMN News, the Houthis discovered the UUV within the past week somewhere off the coast of Yemen.

  The Houthi Navy claims the drone was part of Washington’s continued military support with Saudi Arabia to topple the Houthi regime inside Yemen.

  “It is intended to operate in shallow waters, intended to operate in littoral spaces, and is designed to be pretty autonomous,” Dan Gettinger, co-director of the Center for the Study of the Drone at Bard College, said about the REMUS 600. “It might be the most advanced UUV deployed.”

  Typically, the most common Navy uses for a REMUS 600 are mine countermeasures and intelligence, surveillance, reconnaissance and target acquisition (ISRTA), Gettinger said. Other uses include studying underwater environmental conditions, meteorological research, and underwater mapping of terrain and currents.

  

  The REMUS 600 is between 9 and 18 feet long, depending on the mission and payload, and can travel at about 4.5 knots, according to the US Naval Institute. REMUS 600 was initially developed in 2003 through a partnership with the U.S. Navy and the Woods Hole Oceanographic Institute.

  What makes the REMUS 600 so useful for the Navy is its payload and ease in deploying. Gettinger said it typically only requires a patrol boat to put a REMUS 600 in the water.

  Once underway, he said the REMUS has about 20 hours of operational use before it runs out of power and needs to be recovered. Gettinger guesses the UUV surfaced when its mission ended and was found by the Houthis before it could be recovered. In the future, he suspects such incidents will become more common as more unmanned underwater vehicles are launched near busy waterways.

  “Underwater drones are not as frequently spoken about as UAVs (unmanned aerial vehicles),” Gettinger said. “But there’s a recognition, particularly in China and Russia, these will be a part of a future fleet.”

   

  U.S. Navy officials in Washington and at U.S. 5th Fleet would neither confirm whether if the REMUS 600 belonged to the service nor provide details about any unmanned underwater vehicle missions in the region when asked by USNI News.

  The Washington Times says an earlier version of the REMUS UAV was responsible for clearing anti-ship mines at Iraqi ports right around the time of the invasion in 2003. History may not repeat, but it rhymes, and with the REMUS 600 UAV roaming the waters off of Yemen, this could be a tacit hint of upcoming naval ambitions by the United States and Saudi Arabia.

  An earlier version of the underwater drone, dubbed the REMUS 100 and known within the U.S. Navy’s arsenal as the Mk-18 Mod 1 Swordfish, was used to clear anti-ship mines in the southern Iraqi port city of Umm Qasr in 2003, according to an Office of Naval Research factsheet. The REMUS 600, also known as the Mk-18 Mod 2 Kingfish, replaced the Swordfish in 2010.  

  “As part of the Office of the Secretary of Defense Fastlane initiative in 2011, 5th Fleet began receiving accelerated deliveries of Mk-18 [underwater drones] … meeting the urgent need for mine-hunting capabilities in the U.S. Central Command area of responsibility,” according to U.S. Navy officials.

  This is not the first time a US naval drone was captured in contested waters. In 2016, a Chinese People’s Liberation Army Navy seized a U.S. Navy buoyancy glider that was operating in the South China Sea, claiming it was a hazard to navigation. The PLAN ultimately returned the gilder to the U.S. Navy.

  As for this particular incident, if it is indeed similar to 2003 when the REMUS 100 was on minesweep duty around Iraq at the time of the US invasion, is today’s (more advanced) REMUS 600 captured in the waters of Yemen a precursor to the next “liberating” US invasion?

  

• The Deep State's Plan 'C' – Murder Donald Trump?

  Authored by Mac Slavo via SHTFplan.com,

  Longtime Donald Trump advisor and confidante Roger Stone is warning once again about the deep state. This time, he said that the deep state’s “plan C” is to simply murder the president, since plans A and B won’t work out.

   

  

  With trust in the mainstream media at an all-time low, the global elitists are on the verge of losing their grip on humanity’s throat. And Roger Stone says emphatically that they plan to go down swinging. According to New American, the Deep State’s “Plan A,” is the imploding “investigation” into alleged “Russian collusion” by Special Counsel Robert Mueller, said Stone. If and when that fails, which Stone suggested was likely and soon, the establishment would move to “Plan B.” In essence, Plan B would involve trying to get a majority of Trump’s cabinet to declare him unfit for office. This would allow Trump to be removed under the U.S. Constitution’s 25th Amendment. This scheme is also going to most likely fail, Stone said. Last but not least, though, Stone warned of “Plan C,” which is killing the president.   

  In a wide-ranging interview with The New American magazine at his Florida studio, Stone offered insight into Trump — and into his enemies [the deep state] and their tactics. “It’s easy to forget that the shocking upset that Donald Trump pulled off has never been forgotten or acknowledged by the globalist cabal that has really infected both of our major parties,” he explained.

  “I say that as someone who is a sentimental Republican, but a Republican in the mold of Barry Goldwater who wanted government out of the bedroom, out of the boardroom, that believed in peace through strength, not, you know, neocons cruising the globe looking for expensive wars to profiteer in and stick our nose in.” –New American

  Roger Stone isn’t the first person to see Trump as a target of the deep state. Mike Adams, the Health Ranger, has said he feels that the deep state isn’t afraid to nuke a city in the United States in order to kill Trump and blame North Korea for the result.

  “He’s a shock to the system,” said Stone, a legendary political operative who, in addition to his longtime relationship with Trump, has served as a senior campaign aide to Richard Nixon, Ronald Reagan, Senator Bob Dole, and others. According to Stone, Donald Trump’s election represented the “hostile takeover of the old Republican Party, which we now hope to remake in his image as a party that stands for economic nationalism, that stands for putting American interests ahead of globalist interests, and re-affirms our sovereign rights as Americans.”

  “Now, I think the establishment, at this time, when the president has just passed his tax cut, has cut these regulations — so you see a record stock market, you see unemployment at all time lows, you see a booming housing market — it’s easy to misread the deep enmity and hatred that the globalists and the Insiders have for this president, and to underestimate their resolve to remove him.”

  Stone believes the Deep State would, in fact, attempt to murder the president when Plan A and B fail, which seems the likely scenario. “Having written books on the Kennedy assassination, having highlighted the attempted assassination of President Ronald Reagan by people deeply associated with the Bush family, I think the establishment has Plan A, Plan B, and Plan C,” he said. “Plan A is very clearly a take-down by the illegitimate Special Counsel Robert Mueller, who was appointed not by Jeff Sessions, not at the direction of the president, but by this fellow Rosenstein, who is a close associate of Mueller and [disgraced former FBI boss James] Comey, and who is a globalist Bush insider, a liberal Republican, who somehow got the number two position in the Trump Justice Department,” Stone warned, saying the establishment was now hoping Trump would fire Mueller to regain the upper hand.

  The other thing that is becoming more and more apparent, Stone said, is that “neither Mr. Mueller nor the House nor the Senate Intelligence committees nor the Judiciary committees in those bodies have been able to find any evidence of Russian collusion.”

  “Sorry, but Don Jr.’s meeting with a Russian lawyer that provided nothing is perfectly legal and proper,” Stone said. “There’s nothing wrong with it. She produced no evidence, but what we did learn is that she was in the country thanks to the Obama FBI, without a visa, and she was popping up and being photographed at Hillary rallies and in John McCain’s office. She’s a Quisling! It’s a setup! She’s a spy. She delivered nothing. It’s an attempt to entrap Donny Jr. in a meeting that’s perfectly innocuous and perfectly legal.” But the deep state’s Plan B is to invoke the 25th Amendment.

  “So we’ll see an uptick in all of this ‘Trump is mentally imbalanced, Trump is insane, Trump must be removed,’” Stone warned. “Now you have to examine the extent to which they can whip up that hysteria as a backdrop because, without that hysteria, such a political move on the president will fail.” And once Plan B fails, the globalists will move on to Plan C, which is simply an assassination. “We know Plan C. We saw it in the case of  President John F. Kennedy, who had crossed the Central Intelligence Agency and the Deep State over both the Cuban Missile Crisis and the Bay of Pigs, both, I think, central,” he said.

  

• Apocalypse Now: 2017 Was Another Terrible, Horrible, No Good, Very Bad Year

  Authored by John Whitehead via The Rutherford Institute,

  Just our luck that 2017 gave us more of the same bad news that we’ve experienced in recent years.

  Here’s just a small sampling of what we suffered through in 2017.

  The new boss proved to be the same as the old boss. True to form, the new boss (Donald Trump) proved to be no better than his predecessors in the White House in terms of protecting the citizenry from the American police state.

  911 calls turned deadly. “Don’t call the cops” became yet another don’t to the add the growing list of things that could get you or a loved one tasered, shot or killed by police, especially if you have any condition that might hinder your ability to understand, communicate or immediately comply with an order.

  Traffic stops took a turn for the worse. Police officers were given free range to pull anyone over for a variety of reasons and subject them to forced cavity searches, forced colonoscopies, forced blood draws, forced breath-alcohol tests, forced DNA extractions, forced eye scans, forced inclusion in biometric databases.

  The courts failed to uphold justice. A review of critical court rulings over the past decade or so, including some ominous ones by the U.S. Supreme Court, reveals a startling and steady trend towards pro-police state rulings by an institution concerned more with establishing order and protecting the ruling class and government agents than with upholding the rights enshrined in the Constitution.

  A culture of compliance paved the way for sexual predators. Twenty years after America gave a collective shrug over accusations of sexual harassment by Bill Clinton, sexual harassment suddenly made headlines after a series of powerful men, including Hollywood mogul Harvey Weinstein, were accused of predatory behavior in the workplace.

  Patriotism trumped free speech. At a time when the American flag adorns everything from men’s boxers and women’s bikinis to beer koozies with little outcry from the American public, a conveniently timed public dispute over disrespect for the country’s patriotic symbols during football games further divided the nation.

  Mass shootings claimed more lives. A mass shooting in Las Vegas, the deadliest to date, left us with more questions than answers, none of them a flattering reflection of the nation’s values, political priorities, or the manner in which the military-industrial complex continues to dominate, dictate and shape almost every aspect of our lives.

  Civil discourse was drowned out by intolerance, violence and militarized police. Americans allowed their fears—fear for their safety, fear of each other, fear of being labeled racist or hateful or prejudiced, etc.—to trump their freedom of speech and muzzle them far more effectively than any government edict could. In Charlottesville, Berkeley and St. Louis, the presence of violent protesters and militarized police turned First Amendment activities into riots.

  The cost of endless wars drove the nation deeper into debt. Waging endless wars abroad (in Iraq, Afghanistan, Pakistan and now Syria) didn’t make America—or the rest of the world—any safer, any greater, or any richer. The interest alone on the money America has borrowed to wage its wars will cost an estimated $8 trillion.

  Government agencies padded their pockets at the expense of taxpayers. In Virginia, drivers traveling along a toll road during rush hour were hit with a $40 toll to travel a 10-mile stretch of road, part of a new dynamic price gouging scheme aimed at penalizing single-occupant vehicles traveling during peak times.

  The plight of the nation’s homeless worsened. In communities across the country, legislators adopted a variety of methods (parking meters, zoning regulations, tickets, and even robots) to discourage the homeless from squatting, loitering and panhandling.

  Free speech was dealt one knock-out punch after another. First Amendment activities were pummeled, punched, kicked, choked, chained and generally gagged all across the country.

  The Surveillance State rendered Americans vulnerable to threats from government spies, police, hackers and power failures. The Corporate State tapped into our computer keyboards, cameras, cell phones and smart devices in order to better target us for advertising. Social media giants such as Facebook granted secret requests by the government and its agents for access to users’ accounts. And our private data—methodically collected and stored with or without our say-so—was repeatedly compromised and breached.

  Technology drove teens to suicide. Studies show that the rapid explosion of cell phone use and increased screen time by young people have contributed to a climate in which teen mental health is failing and suicide rates among 13- to 18-year-olds are skyrocketing.

  Police became even more militarized and weaponized. Despite concerns about the government’s steady transformation of local police into a standing military army, local police agencies continued to acquire weaponry, training and equipment suited for the battlefield—with full support from the Trump Administration.

  Drones became more lethal. DARPA, the government’s military research agency, unveiled a plan to deploy a swarm of armed, surveillance mini-drones. The Pentagon also provided a glimpse into its future plans for kamikaze drones and tethered, targeted killer drones.

  Science got scary. Researchers created “humanized” mice using organs taken from fetal tissue. Genetic engineers created an entire synthetic DNA genome watermarked with encoded links and hidden messages. The FDA approved the first digital pill embedded with sensors to monitor patients’ intake. And DARPA funded research towards the creation of genetic extinction technologies that could be used to eradicate or alter whole populations.

  The government waged a renewed war on cash. Championed by Attorney General Jeff Sessions, the government’s attempts to seize cash and other valuables under the guise of asset forfeiture moved into high gear. Denver made $2.4 million in car seizures in one year alone. One Alabama town turned its police force into a money-making operation to increase revenue.

  The U.S. military industrial complex—aided by the Trump administration—armed the world while padding its own pockets. Not content to sell an arsenal of weapons and military equipment to the world, the U.S. government pushed to amend a global arms control agreement to allow it to sell military drones globally.

  Let’s not take the mistakes and the carnage and the toxicity of this past year into a new year.

  As I make clear in my book Battlefield America: The War on the American People, the police state is marching forward, more powerful than ever.

  Thus, if there is to be any hope for freedom in 2018, it rests with “we the people” engaging in local, grassroots activism that transforms our communities and our government from the ground up.

  Let’s resolve to work together to make this new year better than the last.

  

• Groundbreaking Blindness Cure Will Come With $850,000 Price Tag

  How much is a patient’s eyesight worth?

  That’s a corollary question that a transformative medical treatment released by Spark Therapeutics seeks to answer. The treatment, known as Luxturna, has the potential to cure a rare genetically inherited form of blindness, according to Bloomberg.

   

  

  Luxturna

  The price tag? $850,000 – or $425,000 per eye.

  A transformative genetic treatment for a rare, inherited form of blindness will come with a price tag of of $425,000 per eye, or $850,000 for both, said Spark Therapeutics Inc., the tiny biotechnology company that is bringing the therapy to market.

  Since Spark’s Luxturna was approved by the U.S. Food and Drug Administration last month, speculation over the price has grown as it became clear the therapy would be one of the first in a wave of medicines that yield remarkable results after a single treatment – and would carry a commensurate cost.

  Of course, few patients will pay the whole amount out-of-pocket. Even for the uninsured, Spark will offer discounts based on whether or not the drug works initially and remains effective for the estimated 1,000 to 2,000 patients in the US with the inherited retinal disease caused by the gene mutation that the medication treats.

  Though the price tag also reflects what Spark CEO Jeff Marrazzo describes as the drug’s “life-altering” properties.

  “We believe that this price reflects not only the breakthrough, life-altering value of one-time Luxturna, but it will enable us to continue to invest and build on the revolutionary science that supports not only Luxturna but the rest of our pipeline,” Chief Executive Officer Jeff Marrazzo said in a phone interview.

  The company’s “novel” pricing scheme was devised to help placate insurers who don’t want to get stuck paying for the entire course of treatment if a patient changes plans while still enjoying the benefits of the treatment, which only needs to be administered one time.

  A one-time treatment presented a challenge, since the cost would be paid for by one insurer or government, only to have others reap the benefits when the patient changes coverage.

  To help mitigate that dynamic, Spark is rolling out several programs to spread out the cost over the years or give rebates to payers if the benefits wane with time.

  For example, the company said it’s discussing a program with the U.S. Centers for Medicare & Medicaid Services that would spread payments for Luxturna over several years, even though the therapy would be given only once. It didn’t say how many installments would be made, or how long it would take to pay the full cost of the drug.

  Insurers are also wary of getting stuck with the entire bill if the treatment proves ineffective, or if its benefits only persist for a brief period.

  In an agreement with the Boston-area insurer Harvard Pilgrim Health Care, Spark will get the full price of treatment up front. If patients don’t get an immediate benefit – measured at 30 days, or a long term one – measured at 30 months, Spark will have to give some of the money back in a rebate.

  Spark has also proposed selling the gene therapy directly to insurance companies or specialty pharmacies. That would sidestep the current process that requires hospitals or health care providers to buy expensive therapies upfront. Spark is working with  Express Scripts Holding Co. on such an arrangement, and said it’s talking with other drug plans.

  However, some insurers said they expected the drug to cost even more, considering the narrow customer base.

  Express Scripts has been a frequent critic of costly drugs, yet said that the Spark treatment is an exception.

  “Many people were anticipating this would be more than a million dollars” said Steve Miller, the St. Louis-based company’s chief medical officer. “In the end, this is a revolutionary product, and I think in most plans this will be covered.”

  Spark’s biggest challenge may be finding patients to treat.

  Of the few thousand people with the disease, only a few have actually been tested and confirmed to have it, since there was no cure, and thus little use in diagnosis. Many with more advanced forms of the disease won’t qualify for treatment, according to the company.

  President Donald Trump has shaken pharmaceutical stocks, like he did back in October, when he criticized pharmaceutical companies for charging too much for their drugs, and nebulously threatened to do something about drug prices (though as of yet no direct action has been forthcoming).

  However, Spark may need to raise the price if its medication if it doesn’t find enough people to treat. Only a few thousand people in the US possess the genetic mutation that the drug treats. And many of them won’t qualify for treatment.

  Spark’s biggest challenge may be finding patients to treat.

  Of the few thousand people with the disease, only a few have actually been tested and confirmed to have it, since there was no cure, and thus little use in diagnosis. Many with more advanced forms of the disease won’t qualify for treatment, according to the company.

  So, what’s a specialty drug maker to do?

   

  

• Iranian Protests – Target Of Opportunity Or Necessity?

  Authored by Tom Luongo,

  From the moment reports of protests in Iran surfaced I was skeptical of the narrative. It only makes sense to be. So many things are coming together in the first half of 2018 that the timing of these protests warrants scrutiny.

  The earliest reports were of legitimate and peaceful protests of changes in law creating huge price spikes in certain foods and commodities. But, that was quickly hijacked by forces both internal and external to foment wider strife and violence.

  I recommend Moon of Alabama’s commentary on the early days of these protests to get up to speed with how complicated the situation may be in Iran (here and here). In short, what started as normal grievance airing has blossomed into something uglier but that still hasn’t reached anything close to the critical mass needed to replicate successful regime change operations in Libya and Ukraine.

  And with very good reason. Iranians are not as fractious in their opinion of their government as simplistic narratives spun by the U.S., Saudi Arabia and Israel would have you believe. This commentary by Ramin Mazaheri over at The Saker’s Blog makes this very salient point:

  For 8 horrible years the West foisted Iraq on Iran, supplied Iraq with weapons, turned a blind eye to the worst chemical weapons atrocities since World War One, and did all they could to create, prolong and influence the deadliest war in the last quarter of the 20th century.

  And it was still not enough.

  A 2nd phony Western war would also totally backfire in 2018 – have no doubt about that. The Iran-Iraq War created a nationalist unity which Libya did not have; Libya’s revolution did create the highest standard of living in Africa and fewer poor people than the imperialist Netherlands (and free loans, education, health care, etc.), but it was never really tested. Syrians, on the other hand, will soon enjoy a nationalist unity also forged in the crucible of a horribly unjust war.

  So there are simply not the type of divisions in Iranian society which the West was able to exploit in Libya.

  [emphasis mine]

  And you can’t gaslight well-intentioned conservatives on Twitter to produce the kind of results necessary for overthrowing the Iranian theocracy. This is not to say there isn’t an undercurrent of unrest in Iran. There is. But, it’s just not enough that can be stoked into regime change.

  That time will come but I sincerely doubt it’ll be 2018.

  So, if this isn’t going to work, why try now?

  What Israel Wants…

  Israel, with its failure in Syria is feeling incredibly vulnerable now. Iran has helped secure Syria’s future. Russia will continue to act to guarantee it while President Putin and his diplomatic staff try to hammer out deals with everyone and de-escalate the situation.

  Israel’s leadership is dead set against any land route from Iran to Lebanon. Moreover, Israel knows that once Iran acquires nuclear weapon capabilities through its partnership with North Korea, then the window closes permanently on any military solution to its Iran problem.

  The problem with that analysis is that there is simply no path to that end without the U.S.’s involvement. This is why we claim, quite against international law, sections of Syria’s airspace to be off-limits to the Syrian government. Kurdish enclaves east of the Euphrates River are being used as logistical staging grounds for a war on Iran. So, is the escalation of U.S. troops in Afghanistan.

  All of this is sold to us as ‘fighting ISIS,’ which I believe President Trump and the factions of the Pentagon that are loyal to him want. But, at the same time these are also some of the biggest Iran-hawks in U.S. political circles and will use this fight against ISIS as a pretext for establishing a network of bases across the region to pressure Iran.

  I’ve been handicapping a grand peace bargain in the Middle East for months, but I’m beginning to wonder if that is even possible at this point. Israel under Netanyahu will push for as aggressive approach as possible. He is leveraging whatever he can to get the U.S. to not pursue peace in the region.

  And in that respect the real question is whether the Israeli people want to continue with him as their leader if he continues to pursue this path?

  The Saudi Connection

  In that sense the pressure of the loss in Syria already created regime change in Saudi Arabia, so predicting the potential for the same thing in Israel follows. The Saudis need Iran to stay out of the oil markets.

  They are getting no help from their benefactors in the Trump administration who continues to open up U.S. oil production. Pulling out of the Paris Climate Accord, opening up ANWAR, approving pipeline projects like Keystone XL. These, along with the new tax cut bill which is designed to create a domestic investment boom will do nothing to lift the price of oil in the long run.

  Meanwhile the Saudis were only able to get a temporary 300,000 barrel reduction from Russia. And the last thing Crown Prince and de facto King Mohammed bin Salman needs is for Iran’s full potential to hit the market.

  So, it makes sense to activate splinter groups to blow up pipelines and push the U.S. for more sanctions by reversing the Nuclear deal. All of these things are meant to ratchet up the fear of an oil supply disruption and get the price up high enough for the Saudis to balance their budget in the short term.

  They can’t de-peg the Riyal and they can’t accept Yuan for their oil. So, the next best thing is to help along any sign that the Iranian people are fed up with the Mullahs, even if it’s long odds. At a minimum it’ll push up oil prices for a few weeks.

  In politics, like crime investigation, motive, means and opportunity matter. The Saudis, Israel and the U.S. have all three here. The timing window is closing with the advent of nuclear deterrence. So, don’t believe everything you hear and don’t take CNN’s silence as anything more than domestic political wrangling.

  Regime change in Iran would be a feather in Trump’s cap. Not a black eye for Obama, who is now wholly irrelevant. The fact that every bloodthirsty neocon in the U.S. is showing its support for the Iranian people is beyond laughable.

  If anything, a tweet from John “Bomb Iran” McCain or Netanyahu will harden internal support for the Iranian government more than it will feed the opposition. There is real opposition to the current Iranian regime. Most of the protestors are young, under 25. Contrary to what most Americans believe, Iran does hold elections. And last year President Rouhani won re-election over the objection from the clerics who openly backed a different candidate. R0uhani’s victory was clear, but he has a lot to do to quell the discontent in Iran.

  So, ask yourself this question, what goal does putting the sanctions back on achieve? Will it support Iranians with increased economic opportunity or strengthen support for a domestic government no one supposedly wants?

  

• Trump Jr. And Newt Gingrich Unleash On "Backstabbing, Harassing, Leaking, Lying, Opportunist" Bannon

  In the course of less than a day, former Trump strategist Steve Bannon has gone from simply “former Trump strategist” to “radioactive backstabber,” after The Guardian reported that Bannon, in Michael Wolff’s new book “Fire and Fury, called a June 2016 meeting at Trump tower involving Russian attorney Natalia Veselnitskaya “treasonous” and “unpatriotic.”

  “Even if you thought that this was not treasonous, or unpatriotic, or bad shit, and I happen to think it’s all of that, you should have called the FBI immediately.”

  In response, President Trump issued a four-paragraph scorching reply, saying Bannon had “lost his mind.” Donald Trump Jr. also responded, calling his father’s former chief strategist “backstabbing, harassing, leaking, lying & undermining the President,” adding “Steve is not a strategist, he is an opportunist.” 

  Steve had the honor of working in the White House & serving the country. Unfortunately, he squandered that privilege & turned that opportunity into a nightmare of backstabbing, harassing, leaking, lying & undermining the President. Steve is not a strategist, he is an opportunist

  — Donald Trump Jr. (@DonaldJTrumpJr) January 3, 2018

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

  

  Newt Gingrich chimed in on Fox News, telling Neil Cavuto, “I think that Bannon thinks he’s extraordinarily important. But the fact is, Trump had won the nomination without Bannon. Trump would have won the presidency without Bannon. And Trump has governed without Bannon.”

  So I think there’s an exaggerated sense of who Steve is. And I think, remember, this is a guy who got fired. So you have a guy who has been fired who is trying to claim a bunch of things, which he apparently did not claim at the time.

  And I think you have to just say, you know, it’s noise. It has nothing to do with — the things that matter to America and the things that matter to the American people have no relationship to the kind of noise that we’re going to spend all day today with.

  And luckily for the president, he’s really come to distinguish between the things that matter and the things that don’t. The meeting this weekend at Camp David matters with the Republican leadership. Steve Bannon saying a bunch of junk doesn’t really matter in the long run. It will disappear. –Newt Gingrich

   

  Trump Jr. also replied to a tweet by conservative pundit Bill Mitchell, which quotes a portion of Bannon’s book, reading: 

  “On Election Night, when the unexpected trend , Trump might actually win, seemed confirmed, Don Jr. told a friend that his father, or DJT, as he calls him, looked as if he had seen a ghost. Melania was in tears—and not of joy.”

  Trump Jr. responded: “Another good one. Anyone who knows me or follows me knows that’s about as far from something I would say or how I speak as possible… What a joke.”

  Another good one. Anyone who knows me or follows me knows that’s about as far from something I would say or how I speak as possible… What a joke.😂 https://t.co/4L9rYK8W56

  — Donald Trump Jr. (@DonaldJTrumpJr) January 3, 2018

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  And earlier in the day, Trump Jr. tweeted “Andrew Breitbart would be ashamed of the division and lies Steve Bannon is spreading!,” after tweeting “Wow, just looked at the comments section on Breitbart. Wow. When Bannon has lost Breitbart, he’s left with . . . umm, nothing.” 

   

  Andrew Breitbart would be ashamed of the division and lies Steve Bannon is spreading!

  — Donald Trump Jr. (@DonaldJTrumpJr) January 3, 2018

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

  Wow, Just looked at the comments section on Breitbart. Wow. When Bannon has lost Breitbart, he’s left with . . . umm, nothing.

  — Donald Trump Jr. (@DonaldJTrumpJr) January 3, 2018

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

  Trump Jr. also poked fun at Bannon’s support of Roy Moore, who lost the special election last month to replace Attorney General Jeff Sessions’ vacant Senate seat.

  Thanks Steve. Keep up the great work. https://t.co/J9O8CUfJAD

  — Donald Trump Jr. (@DonaldJTrumpJr) January 3, 2018

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  Several other tweets received Trump Jr. retweets throughout the day, including: 

  “Mr. Bannon, the WSJ got an advance copy of that book…” pic.twitter.com/mDvg6h2Qy6

  — Kurt Schlichter (@KurtSchlichter) January 3, 2018

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  There is no side to choose. There is no dilemma here. @realDonaldTrump and @DonaldJTrumpJr are patriotic class acts who have the best interests of this nation at heart.

  Steve Bannon has Steve Bannon’s best interests at heart.

  Nothing I despise more than jealous disloyalty.

  — John Cardillo (@johncardillo) January 3, 2018

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

  So, someone tell me how the ejecting of Bannon will hurt the movement?

  Pssst.

  It won’t hurt the movement no matter what Senator Roy Moore says. pic.twitter.com/GAGJfgNr4Y

  — Kurt Schlichter (@KurtSchlichter) January 3, 2018

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  And now, it appears as though Bannon may have lost any hope of cobbling together political capital. As US News reports; 

  Despite his blatant miscalculation and the animosity he stirred among traditional Republicans, Bannon’s enduring influence was that he purportedly had a direct line to Trump – the White House confirmed they spoke by phone last month – and could help mold the president’s thoughts on policy and political strategy.

  Now, that line appears lacerated.

  “Now that he is on his own, Steve is learning that winning isn’t as easy as I make it look,” Trump said in the statement. “Steve doesn’t represent my base – he’s only in it for himself.”

  The extraordinary breakup between the two larger-than-life comrades led to immediate fallout across the Republican Party. GOP leadership rejoiced at Bannon’s fall from grace, with allies of Senate Majority Leader Mitch McConnell reveling in and sharing the president’s takedown.

  Bannon’s split from the Trumps puts wealthy GOP donor Robert Mercer and his daughter, Rebekah Mercer in an awkward spot – as the financier have financially supported Breitbart, while also supporting President Trump and his GOP causes. Mercer announced in November that he was selling his stake in his company to his daughters – while at the time, making it clear that while he occasionally discusses politics with Bannon, he’s not always aligned with him. 

  And as Trump Jr. said earlier today – when Bannon has lost Breitbart, “he’s left with … ummm, nothing.” 

  In September, Bannon appeared on 60 minutes where heb called himself a “street fighter” and “declared war on the GOP” for trying to “nullify the election.” Bannon also said that the Trump administration made the “original sin” of embracing the establishment. “I mean, we totally embraced the establishment … Because ya had to staff a government.” 

  Bannon also said he was going to be Trump’s “wing man outside for the entire time, to protect [Trump] and to “make sure his enemies know that there’s no free shot on goal.” 

  Well – it looks like Bannon just took a shot on his own goal, and will be cast into radioactive irrelevancy for time immemorial. 

   

   

  

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• SpaceX Will Launch Mysterious Project Zuma On Thursday

  SpaceX has come a long way since one of its rockets exploded on the launch bad in September 2016 (though the company has assembled a humorous bloopers reel to show that it has a sense of humor about its humble beginnings).

  And on Thursday, it will launch a rocket from Cape Canaveral Florida that will carry a satellite into space for the US government. Though the project is top secret, and it’s unclear which government agency commissioned it, or if the satellite is for military or reconnaissance purposes.

   

  

  Indeed, the only thing the public knows about this project is its codename: Project Zuma. And after an initial delay, the launch is finally here, according to Sky News.

  SpaceX is preparing to send into space a satellite for the US government that is so secret the public cannot know even which branch of the administration commissioned the launch.

  A weather report ahead of the launch released on Tuesday described the conditions as excellent.

  Unlike the private aerospace company’s previous classified launches for the military’s National Reconnaissance Office and the super-secret space-plane it took into orbit for the Air Force, there is almost no information available about the “Zuma” payload.

  Zuma is known to be a low Earth orbit satellite (orbiting within 2,000km) which is an orbit necessary both for spy and military communication satellites.

  The secrecy surrounding the launch and the involvement of defense contractor Northrup Grumman in building and operating the spacecraft has led many to speculate that it is defense-related. The National Reconnaissance Office has denied that Zuma belongs to them. The launch window opens at 8pm local time on Thursday at Cape Canaveral in Florida.

  According to Northrup Grumma communications director Lon Raid: “This event represents a cost-effective approach to space access for government missions.”

  “As a company, Northrop Grumman realises that this is a monumental responsibility and has taken great care to ensure the most affordable and lowest risk scenarios for Zuma.”

  The launch had been pushed back despite a US Government desire to launch Zuma before November of last year.

  

• Paul Craig Roberts Asks: "How Much Death And Destruction Awaits Us In 2018?"

  Authored by Paul Craig Roberts,

  The New Year is one full of economic, political, and war threats.

   

  

  Among the economic threats are stock, bond, and real estate markets artificially pumped up by years of central bank money creation and by false reports of full employment. It is an open question whether participants in these markets are aware that underlying reality does not support the asset values. Central banks support stock markets not only with abundant liquidity but also with direct stock purchases. The Japanese central bank is now one of the largest owners of Japanese equities. Central banks, which are supposed to provide economic stability, have created a massive fraud.

  Throughout the Western world politics has degenerated into fraud. No government serves the public’s interest. Except for some former Soviet satellites in Eastern Europe, European governments have defied the will of the people by admitting vast numbers of refugees from Washington’s wars and others pretending to be refugees. The European governments further imperil their citizens with their support for Washington’s rising aggression toward Russia. The universal failure of democratic politics is leading directly to war.

  The Saker explains that Americans with intelligence, honor, courage, and integrity have disappeared from the US national security establishment.

  In their place are arrogant morons high on hubris who believe: (1) We can buy anybody, (2) Those we cannot buy, we bully, (3) Those we cannot bully, we kill, (4) Nothing can happen to us, we live in total impunity no matter what we do.

  Scott Bennett reports  that US soldiers are being propagandized that Russia is an enemy with whom we are headed to war.

  The Anglo-Zionist empire is trying to overturn the Iranian agreement and to restart the attempt to overthrow the government of Syria. Lebanon’s Hezbollah is also in the empire’s sights. Washington is arming Ukraine in order to enable an attack on the breakaway provinces of Novorussia. Threats against North Korea escalate. Even little Venezuela is threatened with military intervention simply because the country wants to control its own destiny and not be controlled by Washington and the New York banks.

  In the opinion of some, Russia’s very cautious diplomacy has increased the likelihood that Washington will miscalculate and give the world a third world war. By not accepting the requests of the breakaway Russian provinces in Ukraine to be reunited with Russia, the Russian government paved the way for Washington to provide the military means for its Ukrainian puppet to attempt to reconquer the provinces. Success would damage Russian prestige and encourage Washington in its aggressive actions. Sooner or later Russia will have to stand and fight.

  Russia’s premature declaration of victory in Syria and withdrawal has made it possible for US forces to remain in Syria and attempt to restart the effort to overthrow the Assad government. Russia would have to defend its victory, or by the failure to do so encourage more aggressive actions by Washington.

  Hopes have evaporated that President Trump would restore the normalized relations between the nuclear powers that Reagan and Gorbachev made possible. The question for the New Year is when does Washington’s aggression against Russia ignite a hot war.

  Your website will be examining these issues as they unfold in 2018. From the perspective of today, it is unlikely that the New Year will be a happy one. Nowhere in the West is there a sign of leadership toward peace and the well-being of humanity.

  

• "Everything Is Overvalued": Public Pensions Face Dangerous Dilemma In 2018

  As  we discussed  a few weeks ago, being a pension investor these days has absolutely nothing to do with “investing” in the traditional sense of the word and everything to do with gaming discount rates to make their insolvent ponzi schemes look more stable than they actually are.  Here was our recent take on CalPERS’ decision to hike their equity allocation to 50%:

  CalPERS’ decision to hike their equity allocation had absolutely nothing to do with their opinion of relative value between assets classes and nothing to do with traditional valuation metrics that a rational investor might like to see before buying a stake in a business but rather had everything to do with gaming pension accounting rules to make their insolvent fund look a bit better.  You see, making the rational decision to lower their exposure to the massive equity bubble could have resulted in CalPERS having to also lower their discount rate for future liabilities…a move which would require more contributions from cities, towns, school districts, etc. and could bring the whole ponzi crashing down. 

  The new allocation, which goes into effect July 1, 2018, supports CalPERS’ 7% annualized assumed rate of return. The investment committee was considering four options, including one that lowered the rate of return to 6.5% by slashing equity exposure and another that increased it to 7.25% by increasing the exposure to almost 60% of the portfolio.

  The lower the rate of rate means more contributions from cities, towns and school districts to CalPERS. Those governmental units are already facing large contribution increases — and have complained loudly at CalPERS meetings — because a decision by the $345.1 billion pension fund’s board in December 2016 to lower the rate of return over three years to 7% from 7.5% by July, 1, 2019.

  Overnight the Wall Street Journal poses an interesting question: what happens when real world fundamentals don’t line up with pension boards’ artificial goal seeking exercises on discount rates?  The answer, of course, is that pensions, and therefore taxpayers, are forced to take on more and more risk as they stretch for returns…

  Retirement systems that manage money for firefighters, police officers, teachers and other public workers aren’t pulling back on costly bets at a time when markets are rising around the world.

  Some public pension funds are adding to traditional allocations of stocks and bonds while both are expensive. 

  Others are loading up on more private-equity or real-estate holdings that are less liquid and sometimes carry high fees.

  …a phenomenon that has resulted in a massive reduction of safer bets on bonds as pensions have been forced to chase returns via investments in expensive private equity and real estate allocations.

  Indeed, as one of the people interviewed by the WSJ puts it best, how much risk to take is a question facing all investors as they enter 2018. And the punchline” “Everything is overvalued,” said Wilshire Consulting President Andrew Junkin, who advises public pension funds. “There’s no magic option out there.”

  

  As our readers are aware, this is hardly a new topic for us. As we pointed out a year ago in a post entitled “CalPERS Board Votes To Maintain Ponzi Scheme With Only 50bps Reduction Of Discount Rate,” each year CalPERS has to weigh mathematical realities against the risk of disrupting the ponzi scheme and forcing several California cities to the brink of bankruptcy with lower discount rates…‘mathematical realities’ rarely win that fight.

  But a CalPERS return reduction would just move the burden to other government units. Groups representing municipal governments in California warn that some cities could be forced to make layoffs and major cuts in city services as well as face the risk of bankruptcy if they have to absorb the decline through higher contributions to CalPERS.

   

  “This is big for us,” Dane Hutchings, a lobbyist with the League of California Cities, said in an interview. “We’ve got cities out there with half their general fund obligated to pension liabilities. How do you run a city with half a budget?”

   

  CalPERS documents show that some governmental units could see their contributions more than double if the rate of return was lowered to 6%. Mr. Hutchings said bankruptcies might occur if cities had a major hike without it being phased in over a period of years. CalPERS’ annual report in September on funding levels and risks also warned of potential bankruptcies by governmental units if the rate of return was decreased.

  Of course, the pension managers – unless they happen to be traders in the early 20s who have never encountered an even modest bear market or market correction – are quite aware of the underlying tension of allocating cash to stocks at all time highs:

  Increasing its allocation to stocks is also risky. “This may not be the most opportune time to take on additional equity risk,” investment manager Dianne Sandoval said at a December board meeting.

  Why whatever could she be referring to: the $18 trillion in central bank liquidity which this year will finally shrink for the first time ever, or the ominous up/downside equity investment calculus going forward.

  Meanwhile, this is not just a U.S. phenomenon as the WSJ notes that a major Canadian pension fund is also planning a bigger bet on illiquid assets. The $202 billion Canadian pension fund Caisse de dépôt et placement du Québec plans to move money into investments such as real estate, private equity, infrastructure and corporate credit, said President and Chief Executive Officer Michael Sabia, of CDPQ. “Today, liquid assets—traditional government bonds and public equities—account for the majority of our investments,” Mr. Sabia said in a statement. “A few years down the road, this will no longer be the case.”

  Of course, when going all-in on the various asset bubbles around the world inevitably fails, taxpayers, as always, will be forced to pick up the pieces: the question is whether or not the public pension ponzi will be too big to bail.

  

• US Empire Is Running The Same Script With Iran That It Ran With Libya, Syria

  Authored by Caitlin Johnstone via CaitlinJohnstone.com,

  Two weeks ago a memo was leaked from inside the Trump administration showing how Secretary of State and DC neophyte Rex Tillerson was coached on how the US empire uses human rights as a pretense on which to attack and undermine noncompliant governments. Politico reports:

  The May 17 memo reads like a crash course for a businessman-turned-diplomat, and its conclusion offers a starkly realist vision: that the U.S. should use human rights as a club against its adversaries, like Iran, China and North Korea, while giving a pass to repressive allies like the Philippines, Egypt and Saudi Arabia.

  “Allies should be treated differently — and better — than adversaries. Otherwise, we end up with more adversaries, and fewer allies,” argued the memo, written by Tillerson’s influential policy aide, Brian Hook.

  With what would be perfect comedic timing if it weren’t so frightening, Iran erupted in protests which have been ongoing for the last four days, and the western empire is suddenly expressing deep, bipartisan concern about the human rights of those protesters.

   

  Big protests in Iran. The people are finally getting wise as to how their money and wealth is being stolen and squandered on terrorism. Looks like they will not take it any longer. The USA is watching very closely for human rights violations!

  — Donald J. Trump (@realDonaldTrump) December 31, 2017

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  The Iranian people, especially the young, are protesting for the freedom and future they deserve. I hope their government responds peacefully and supports their hopes.

  — Hillary Clinton (@HillaryClinton) December 31, 2017

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  Secretary Tillerson reiterates the United States’ deep respect for the Iranian people. We call on all nations to stand with us in demanding the regime respect their basic human rights. #Iranprotests

  — Heather Nauert (@statedeptspox) December 31, 2017

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  Watching events in Iran with concern. Vital that citizens should have the right to demonstrate peacefully.

  — Boris Johnson (@BorisJohnson) December 31, 2017

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  Exact same script from Kiev, Libya, etc dusted off again. Same words. Particularly cruel when you are preparing to bomb these same citizens to pretend to care about their rights… https://t.co/AWJJ896AIJ

  — Daniel McAdams (@DanielLMcAdams) December 31, 2017

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  So we all know what this song and dance is code for. Any evil can be justified in the name of “human rights”.

  In October we learned from a former Qatari prime minister that there was a massive push from the US and its allies to topple the Syrian government from the very beginning of the protests which began in that country in 2011 as part of the so-called Arab Spring. This revelation came in the same week The Intercept finally released NSA documents confirming that foreign governments were in direct control of the “rebels” who began attacking Syria following those 2011 protests. The fretting over human rights has occurred throughout the entirety of the Syrian war, even as the governments publicly decrying human rights abuses were secretly arming and training terrorist factions to murder, rape and pillage their way across the country.

  We’ve seen it over and over again. In Libya, western interventionism was justified under the pretense of defending human rights when the goal was actually regime change. In Ukraine, empire loyalists played cheerleader for the protests in Kiev when the goal was actually regime change. And who could ever forget the poor oppressed people of Iraq who will surely greet the invaders as liberators?

  In 2007 retired four-star General Wesley Clark appeared on Democracy Now and said that about ten days after 9/11 he learned that the Pentagon was already making plans for a completely unjustified invasion of Iraq, and that he was shown a memo featuring a plan to “take out seven countries in five years, starting with Iraq, and then Syria, Lebanon, Libya, Somalia, Sudan and, finishing off, Iran.”

  So it’s an established fact that the neocons have had Iran in their crosshairs for a good long time.

  This is all coming off the back of the nonstop CIA/CNN narrative being advanced that Iran is a top perpetrator of state-sponsored terrorism, which is just plain false. I have a lot of Trump-supporting followers, and I would like to stress to them that the group of intelligence veterans who authored this memo about Iran is the same group who released a memo dismantling the bogus Russiagate narrative; these are good people and you can trust them. I encourage you to read it.

   

  Iran, the Number One State of Sponsored Terror with numerous violations of Human Rights occurring on an hourly basis, has now closed down the Internet so that peaceful demonstrators cannot communicate. Not good!

  — Donald J. Trump (@realDonaldTrump) December 31, 2017

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  Trump is lying when he says Iran is “the Number One State of Sponsored Terror”. This is the same exact script they run over and over and over again, and people are falling for it again like Charlie Brown and the football. It is nonsensical to believe things asserted by the US intelligence and defense agencies on blind faith at this point, especially when they are clearly working to manufacture support for interventionism in a key strategic location. In a post-Iraq invasion world, nothing but the most intense skepticism of such behavior is acceptable.

  Luckily, because a full scale invasion of Iran would be far more costly and deadly than the invasion of Iraq, support for this will need to be manufactured not just in America but within an entire coalition of its allies. This will be extremely difficult to do, but by God they are trying.

  Please keep your skepticism cranked up to eleven on this Iran stuff, dear reader, and be very loudly vocal about it. My Trump-supporting readers especially, I implore you to think critically about all this and look closely at the similarities between the anti-Iran agenda and the other interventions I know you oppose. Together we can kill this narrative and spare ourselves another senseless middle eastern bloodbath.

  *  *  *

  Thanks for reading! My work here is entirely reader-funded so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following me on Twitter, bookmarking my website, throwing some money into my hat on Patreon or Paypal, or buying my new book Woke: A Field Guide for Utopia Preppers.

  

• Compliance At Steve Cohen's New Firm Resembles Big Brother

  The first of the year has come and gone and, for the first time in nearly half a decade, Steve Cohen can legally manage outside money. To wit, his new firm, Stamford Harbor Asset Management, the successor firm to both his family office Point72 Asset Management and one-time “criminal enterprise” SAC Capital Advisers, is aiming to raise between $3 billion and $4 billion of outside capital to augment the $10 billion of Cohen’s own money that will be managed by the fund.

  We memorably picked up on the SEC investigation into Cohen’s former firm there years before SAC pled guilty to insider trading – “Is SEC’s Insider Trading Case Implicating FrontPoint Really Just A Sting Operation Aimed At SAC Capital?” And it appears, according to a Bloomberg profile of Cohen’s new firm, that CYA is once again a top priority for the legendary hedge fund trader, who managed to evade prosecution despite years of work by the SEC and then-US Attorney Preet Bharara. Though some of his former employees weren’t so lucky.

   

  

  Even though reversals by appellate court judges in recent years have made it more difficult for prosecutors to prove insider trading – they must now prove that the person supplying the information received some material benefit for the tip – Stamford Harbor will be operating under the watchful eye of an outside monitor who reports directly to the SEC.

  To help mitigate the appearance of wrongdoing, Cohen has hired a 50-person compliance team who will be situated in the middle of the trading floor, listening to conversations, monitoring emails and flagging anything suspicious that they should come across.

  Bloomberg compared it to “Big Brother.”

  Inside what will be his Stamford Harbor Capital sits a command center in the middle of the trading floor. There, a 50-member compliance team is strategically positioned to listen in on traders’ conversations in real time, comb through emails for suspicious language and even veto job candidates.

  The room is part of billionaire Cohen’s preparations to open the fund after his two-year ban on managing outside capital ended last week. The new firm, based in the same Stamford, Connecticut-based building as his family office, is slated to manage $3 billion to $4 billion of client money in addition to his own $10 billion-plus fortune. Through the internal oversight, Cohen looks to be trying to ensure that no one ever calls his new venture a “criminal enterprise.”

  That’s the description that former U.S. Attorney Preet Bharara gave Cohen’s previous hedge fund SAC Capital Advisors.

  Four years ago, the firm pleaded guilty to securities fraud and paid a record $1.8 billion fine to settle a seven-year federal insider-trading probe. Ever since, Cohen, who wasn’t charged with any wrongdoing, has been working to rebuild his reputation at his Point72 Asset Management, the firm that manages his own fortune.

  Back in 2015, Cohen hired a former high-ranking Justice Department official to lead his compliance team.

  In 2015 he hired chief legal officer Kevin O’Connor, who once held the third-highest ranking position at the Justice Department. As part of his deal with the government, there’s an outside monitor — Michael Considine, an attorney at Seward & Kissel, who reports directly to the U.S. Securities and Exchange Commission and will continue to file periodic reports until at least the end of 2019.

  There’s also an “Intelligence Team” that will help SAC root out risky hires.

  The firm’s so-called Intelligence Team includes analysts who have five to 10 years of prior experience working in the U.S. intelligence community or as investigators, according to a job posting on LinkedIn late last year.

  According to Bloomberg, some long-term traders have bristled under the increased scrutiny. Perhaps this is why one of Cohen’s top traders left late last year just as the firm was preparing to accept outside money once again.

  After moderating his expectations for the outside capital raise – to between $3 billion and $4 billion down from $10 billion – Cohen is seeking the same onerous terms that made SAC infamous for being one of the most venal firms on Wall Street. Not only is Cohen asking investors to agree to lock up their capital for up to three years, he’s demanding management fees of 2.75% of total assets plus 30% of any profits.

  As stocks have climbed to record highs, fees on index tracking ETFs have fallen to a few basis points – much lower than they were when SAC pleaded guilty in 2013.

  Whether Cohen is successful in reaching his goals for outside money remains to be seen.

   

  

• Trump Warns Kim: "I've Got A Bigger Nuclear Button Than Yours"

  Perhaps we should not be shocked any more by the tone of President Trump’s tweets but he has kicked off 2018 with bang and his latest shot across North Korea’s bow is quite stunning in both its seriousness and its juvenileness.

  Apparently responding to what North Korean leader Kim Jong Un said in a New Year’s Day speech – that he had a nuclear launch button at his desk, and that the international community would have to accept North Korea’s status as a nuclear-armed nation as a “reality.”

  President Trump responded by tweeting “Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!”

  North Korean Leader Kim Jong Un just stated that the “Nuclear Button is on his desk at all times.” Will someone from his depleted and food starved regime please inform him that I too have a Nuclear Button, but it is a much bigger & more powerful one than his, and my Button works!

  — Donald J. Trump (@realDonaldTrump) January 3, 2018

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  Happy Newclear Year World…

   

  

  

• Arizona National Guard Deployed To Cuba To Support Guantanamo Bay

  Despite ongoing talk of its closure, Fox News reports that an Arizona Army National Guard unit will begin the New Year in Cuba – deploying to Guantanamo Bay for approximately nine months.

  Once there, they’ll be on a joint task force helping to augment staff.

  These soldiers leaving for Guantanamo Bay in the coming days in support of Operation Enduring Freedom.

  “There was some discussion some time back about actually shutting it down. Right now that’s not what’s going to happen so it’s still very important for us service members to be prepared to go and continue that mission,” said Arizona Army National Guard Command Sergeant Major Fidel Zamora.

  That’s exactly what nearly 50 Arizona Army National Guard soldiers will soon be doing.

  “Part of that is being able to inform and advise the Joint Task Force Commander there on military police tasks and procedures and part of that is just making sure that the staff runs effectively on a day to day basis,” said Colonel Rich Baldwin, the Land Component Commander of the Arizona Army National Guard.

  This mission is so sensitive we were asked not to show the faces of these soldiers and their families.

  “We don’t want to telegraph to the world who is going, who’s there and who’s performing this mission because they all have families that are still back here while they’re overseas doing this mission,” Colonel Baldwin said.

  Fox notes that these soldiers won’t have contact with the detainees and they are expected to be deployed for about nine months.

  

• "It's Different" Because "Financial Markets Are No Longer A Mechanism For Price Discovery"

  Authored by Rusty Guinn via Epsilon Theory blog,

  Bernard: If knowledge isn’t self-knowledge, it isn’t doing much, mate. Is the universe expanding? Is it contracting? Is it standing on one leg and singing ‘When Father Painted the Parlour’? Leave me out. I can expand my universe without you.

  ‘She walks in beauty, like the night of cloudless climes and starry skies, and all that’s best of dark and bright meet in her aspect and her eyes.”

  —  Arcadia, Tom Stoppard

  It is a romantic thought, that we might divorce our personal universe from the universe around us. For us investors, maybe that means to hide in a room building an elegant model to work out the true value of a thing. I mean, by itself it’s a complete waste of time…but so romantic!

  To make a prairie it takes a clover and one bee,
  One clover, and a bee.
  And revery.
  The revery alone will do,
  If bees are few.
  — “To make a prairie”, Emily Dickinson

  Since I’m bogarting Ben’s title, I might as well steal his best literary reference, too. The market isn’t necessarily tied to ‘fundamentals’ any more than a prairie is to bees. Revery alone will do, and sometimes it will do for a very, very, very long time.

  A true German can’t abide the French,
  But he’ll gladly drink their wine.
  — Faust, Johann Wolfgang von Goethe

  You don’t have to be French to drink their wine, y’all. Being part of the Epsilon Theory pack doesn’t mean buying into narratives. It means understanding that in a market, if it matters to someone, it should matter to everyone. And narratives matter to a whole lot of someones.

  Epsilon Theory started from a pretty simple idea. Ben observed that no financial or econometric model can ever fully explain the returns or volatility of financial markets. I don’t think he’ll be too mad if I point out that this wasn’t a particularly novel observation. After all, every statistical model in the world has an error term that basically accounts for this — epsilon.

  β + α + ε

  

  Said less vaguely, epsilon is the way in which — as people — investors respond to both financial and non-financial stimuli in various non-random ways. It is an observation that a not insignificant portion of the systematic (i.e. not diversifiable) risk and return in your portfolio is completely divorced from the risks faced by economies and businesses. It is a feature only of the markets and the people who comprise them.

  Some regard changing perceptions, sentiment and shifting narratives as a source of short-term volatility in securities prices, and little more. Indeed, that is the implication of the old Benjamin Graham trope I disputed in The Myth of Market In-Itself — that the market is a short-run voting machine, but a long-run weighing machine. Sure, sentiment may matter in the short run, but eventually truth will out! I did a fair job, I think, of identifying my issues with that point of view, but as per usual, it was Ben that really got to the heart of the issue. In his latest note, he characterizes the occasional sharp rise in unpredictability of market outcomes — not to be mistaken for volatility — as the result of a Three-Body Problem. You do yourself a disservice if you haven’t read the piece, and probably a greater disservice if you haven’t read the Liu Cixin book of the same title recommended in it. But in short, a three-body problem refers to a system that is solvable not through elegant algorithm, but only through brute-force computation. There is no closed-form solution to predict the future locations of a set of three planetary bodies in a vacuum like, say, the Earth, the sun and the moon.

  In most environments, where the purpose of markets is to efficiently and accurately price risk of various uses of capital, those markets tend to behave more or less like two-body systems. The interaction of Planet A (which we’ll call ‘fundamental data’) and Planet B (which we’ll call ‘prices’) is generally predictable. Oh sure, there’s volatility. Remember, not everyone agrees on the starting point and velocity of Planet A — at least, not since Reg FD, anyway. Information takes time to propagate. But we also know that Planet C (let’s call it ‘epsilon’) is sitting out there somewhere. Yet it’s far enough away that its gravity can’t do more than induce short- and medium term distortions in the relationship between A and B. If you knew the truth about the starting positions and velocities of Planet A and Planet B, however, you could develop a formula that would tell you within a pretty fair margin where prices would be down the line.

  In this typical state of the world, being a better investor has meant getting better at uncovering the truth about Planet A so that you can predict Planet B’s future location. It’s no wonder that a generation of investors grew up learning about traditional security analysis, the only way investment management is taught in every business school in the world.

  Still, everyone from the most well-respected market commentators to the staunchest Graham and Dodd-quoting undergrad recognizes the existence of markets in which Planet C — epsilon — contributes its gravity to the system. Among those periods in which our ability to make predictions on the basis of relationships between fundamental data and securities prices is especially poor, are those we know as bubbles and manias. William Bernstein characterizes these periods as those typified by the “flood of new investors who swallow plausible stories in place of doing the hard math.” He goes on to quote Templeton, admonishing investors, “The four most expensive words in the English language are ‘This time it’s different.’”

  Well, guess what? Roll your eyes at the expression to your heart’s content, but I’m telling you what Ben has been telling you for years now:

  This Time It’s Different.

  It’s not different because people really got it right this time (in ways they missed every other time) about some new technology that’s going to Change The World! Electric cars, cryptocurrency, AI and automation, these may all be fabulous things, and they may well prove to be game-changers for productivity and returns on capital down the line, but if you think any of those things explain current valuations, you’re nuts. You’re also wrong.

  It’s different because financial markets are no longer a mechanism for price discovery and the pricing of risk of capital allocation decisions.

  Markets have been made into a utility. More to the point, they have been made into a political utility, a tool for ensuring wealth and stability of our political structures. The easing tools we dabbled in to stabilize prior business cycles were brought to bear instead as tools for propping up and expanding financial asset prices. Beyond the direct marginal price impact of the easing itself, central bankers tailored communications policies to create Pavlovian responses to every narrative. Our President tweets about the policy implications when the S&P 500 hits new highs, for God’s sake^[2]. This isn’t a secret, y’all. The singular intent of every central banker in the world is to keep the prices of financial assets from going down, and the singular intent of every government that puts those central bankers in power is to ensure that they do so, in order to retain social stability. Sure, there’s a dual mandate. But the mandates aren’t employment and price stability. They’re (1) expanding financial asset prices and (2) effectively marketing the idea of corresponding wealth effects to the public.

  Markets have also rapidly become a social utility, an inextricable part of every contract between governments and the governed. Underfunded pensions and undersized boomer 401(k) accounts mean that ownership of risky assets is not a choice driven by diversification or relative return expectations, but by the fact that it is the only asset they can buy that has any potential of meeting the returns they would need to be adequately funded. Let’s say that you are running a state pension plan that is 65% funded. Your legislature is telling you that no help is coming from the state budget. You and every member of your agency will be fired if you even suggest cutting benefits, if you even have that authority. Your consultant or internal staff just did their new mean reversion-based capital markets return projections, and higher valuations mean projected returns on everything are lower. What’s worse, your funded status assumes returns that are higher than anything on their sheet. You are being presented with a Hobson’s Choice — behind Door #1, you get fired, and behind Door #2, you lever up your stock exposure with an increased private equity allocation. This a brutal position to be in.

  And sure, like most markets with bubble-like characteristics, this one has become a utility for psychic value as well. Investors buy Bitcoin on the narrative-driven belief that it is an ‘investment’ in the technology, a way to participate in shifting the economy toward privately negotiated and settled transactions. It isn’t. We’ve all seen the absurd stock charts of companies who did nothing more than add “blockchain” to their names. We’ve observed TSLA, NFLX and CRM continue to trade on earnings reports that provide zero incremental data on business direction or momentum but heroic narratives that the sell side dutifully push out to the masses looking for good stories. If you must own risky assets and those assets don’t have growth, then revery alone will do, if bees are few.

  It may comfort us to say that “The market has been divorced from fundamentals for so long, but eventually it must swing back.” And it will. The point of this note, and the point of The Three Body-Problem isn’t to say that it won’t. Planet C will drift away again, and outcomes will look more like what economic and business fundamentals would predict. More like our historical analysis of what drives good, high quality investments. But too many investors are comforting themselves with the stories of the 1990s, of the Nifty Fifty, and the idea that non-fundamentally-driven markets mean return to sanity after five to ten years. But they don’t have to. And because of the utilitization of markets, because of the exit of passive-oriented investors from the price-setting margin of markets, it’s possible that they won’t for a very long time.

  This Three-Body Problem isn’t going anywhere for a while.

  The Three-Body Portfolio

  When I began this Code series at the beginning of 2017, I kicked it off with A Man Must Have a Code, a conversation about why we think that all investors ought to have a consistent way of approaching their major investment decisions. I posited that a code ought to consist of a concise list of Things that Matter, Things that Don’t Matter and Things that Don’t Always Matter (But Do Now). And so my notes have focused on investing principles that I think of as generalized solutions. These are things that I believe are true in both Two-Body and Three-Body Markets:

  1. In I am Spartacus, I wrote that the passive-active debate doesn’t matter, and that the premise itself is fraudulent.
  2. In What a Good-Looking Question, I wrote that trying to pick stocks doesn’t matter, and is largely a waste of time for the majority of investors.
  3. In Break the Wheel, I argued that fund picking doesn’t matter either, and took on the cyclical, mean-reverting patterns by which we evaluate fund managers.
  4. And They Did Live by Watchfires highlighted how whatever skill we think we have in timing and trading (which is probably none) doesn’t matter anyway.
  5. In Chili P is My Signature, I wrote that the typical half-hearted tilts, even to legitimate factors like value and momentum, don’t matter either.
  6. In Whom Fortune Favors (Part 2 here), I wrote that quantity of risk matters more than anything else (and that most investors probably aren’t taking enough).
  7. In You Still Have Made a Choice, I wrote that maximizing the benefits of diversification matters more than the vast majority of views we may have on one market over another.
  8. In The Myth of Market In-Itself (Part 2 here), I wrote that investor behavior matters, and spent a lot of electrons on the idea that returns are always a reflection of human behavior and emotion.
  9. In Wall Street’s Merry Pranks, I acknowledged that costs matter, but emphasized that trading costs, taxes and indirect costs from bad buy/sell behaviors nearly always matter more than the far more frequently maligned advisory and fund management expenses.

  In all of these, you’ve gotten a healthy dose of emphasis on getting beta — how we get exposure to financial markets — right. But you’ve seen precious little on alpha — uncorrelated sources of non-systematic, incremental return. Where we dealt with the usual ways in which investors seek out alpha, I have been critical. Maybe even derisive. Sorry, not sorry. There’s a reason:

  Even in normal environments, alpha is hard.

  Alpha is hard because it’s hard to measure. It’s hard to know if what we’re doing is actually something that adds value, or if we’re being fooled by randomness. We may even just be layering on some other systematic factor, or beta, that is just compensating us for taking additional risk. Every couple of years, someone rediscovers that bond managers tend to “have more persistent alpha”, and a couple of weeks later, someone rediscovers that bond managers just layer on more corporate credit risk than the benchmark. Every couple years, stock-picking strategies go back into vogue — it’s a stock-pickers’ market, they say! Fundamentals matter again! No, they don’t. You’re structurally smaller cap and loaded up on higher volatility names, and when those factors work you feel smart.

  Alpha is hard because randomness is an insanely powerful force in the universe and within our industry. Any time I hear a fund manager or financial advisor say, “Look, a 10-year track record like that doesn’t just happen by accident,” every part of me wants to scream, “Yes, it bloody well does, and if there’s anything true and good about mathematics at all, it will happen by accident ALL THE TIME.” I’m not saying that Warren Buffett’s success is an accident, but I am absolutely saying that with as many investors as there are, it is improbable that history would not create Warren Buffett’s track record. We are all looking for a way to increase returns that doesn’t involve taking more risk, and once we’ve gotten all we can out of diversification, believing in alpha is our only choice.

  In a three-body market where epsilon exerts its gravity, alpha is not just hard. Finding it emphasizes entirely different types of data and analysis. The whole point of recognizing an increasingly chaotic system is that our confidence in the causal relationships over time and between assets at a point in time drops significantly. Given that tools relying on temporal and cross-asset relationships are the ones we most often use to evaluate investment strategies, it puts us in a bit of a pickle! Sure, there are some exogenous strategies like high-frequency trading that are pretty effective across environments for mechanical reasons. But many of the “time-tested” strategies that work in Two-Body Markets can stop working for a very long time, and the “new” strategies we identify in our in-sample periods can start looking like hot garbage the second we drop them out-of-sample. The search for alpha in this kind of environment — even when it occasionally bears fruit — is time-consuming, expensive, and often leads to unintended risk, cost and diversification decisions that more than offset any positive that they generate. We get a stock pick right, but it is dwarfed by sector effects. We pick the right country to invest in, but get killed on currency. For many investors – for most investors — this means that trying to beat “the market” on an intra-asset class level or at on an inter-asset class level through tactical asset allocation should not be part of their playbook. For these people, I hope the Code to this point is a useful tool. Thanks for reading.

  But for those who know they won’t be content with that very adequate outcome, I’ll do my best to talk about alpha strategies that I think can work in a Three-Body Market. That means identifying the likelihood of success of various analytical security and asset class selection strategies. It also means giving you my perspective on what edge (ugh, I know) would even conceivably look like in a fund manager. As we close the door on 2017, I also close my series on The Things That Matter and The Things that Don’t Matter. As we open the door on 2018, look forward to a new series on the Things that Don’t Always Matter (But Do Now).

  Together, I think they’ll provide a pretty good roadmap for the Three-Body Portfolio. But I mean, even if they don’t, at worst you’ll get to read horror stories of terrible fund managers, so what have you really got to lose?

  From Texas, my best wishes for a prosperous New Year to you and yours.

  

• Bitcoin "Wealth Effect" To Boost Japan's GDP Up To 0.3%

  Back in early December, the Nikkei reported that 40% of cryptocurrency trading in Oct-Nov was yen-denominated.  This means that while South Korea’s “bitcoin zombies” were a remarkable media sideshow, it was Japanese traders who have come to account for nearly half of cryptocurrency trading since China started to shut down its own crypto exchanges. The report explicitly showed that Japanese men in their 30s and 40s who are engaged in leveraged FX trading (or who used to trade but have stopped) are driving the cryptocurrency market.

  Commenting on this dominance of Japanese traders, Deutsche Bank last week observed that “the emergence of “Bitcoin wealthy” might ignite the “speculative spirit” of Japanese people with strong follower aspirations.”

  It also prompted us to wonder for the duration of 2017, and tongue-in-cheek, “if Bitcoin wasn’t a secretive ploy by the BOJ – which has had a far more permissive approach to bitcoin cryptocurrencies than its central bank peers – to boost Japanese animal spirits, which had been squashed by three decades of chronic deflation and disenchantment with rigged equities.”

  Adding to the speculation, in his latest discussion of Bitcoin during the press conference following the Monetary Policy Meeting on 21 December, BOJ governor Haruhiko Kuroda once again refused to slam the cryptocurrency as fraud, as so many of his peers have done, and instead merely expressed an opinion that current Bitcoin market movements were the result of speculative trading. He also commented that price movements were abnormal, even if clearly beneficial as the below analysis reveals.

  Fast forward to today, when Nomura analyst Yoshiyuki Suimon went the extra step of trying to quantify the actual profits, whether paper or realized, earned by Japan’s Mr. Watanabe et al. This is what he found:

  Figure 3 shows Bitcoin market cap and market cap divided by the weighting of yen-based trades. Assuming that the weighting of yen-based trades is equivalent to Bitcoin holdings by Japanese people, we estimate that Japanese people hold Bitcoin with a market cap of about ¥5.1trn. Assuming that the bulk of this ¥5.1trn belongs to Japanese investors, the scale of this increase in assets can hardly be ignored.

  

  According to a 27 December 2017 Nikkei article, the number of Japanese people holding Bitcoin has reached 1mn, and assuming average holdings of 3-4 Bitcoin per person, this is broadly consistent with our estimate.

  Meanwhile, the Bitcoin price rose by around ¥866,000 between Apr-Jun 2017 and Oct- Dec 2017, on which basis we estimate unrealized gains on Bitcoin held by Japanese people of roughly ¥3.2trn (3.7mn × ¥866,000).

  This brings us to the next logical step, the one we have hinted repeatedly is what one or more central banks may well be after, namely the “wealth effect” generated by bitcoin appreciation, and the resultant boost to consumer spending, and therefore GDP, which a global cryptocurrency bubble would enable.

  After all, central banks don’t care if consumer spending rises as a result of higher stock prices, or higher bitcoin prices: at the end of the day, whatever boosts consumer confidence, works. Plus, as Citi pointed out last summer, everything is a bubble now, so may as well spread the wealth…. effect that is.

  Here is Nomura’s calculation of how much Japan’s GDP may potentially rise as a result of bitcoin:

  We consider the effect unrealized gains from this large-scale Bitcoin trading might have on the Japanese economy. Although Japanese investors’ unrealized gains are unlikely to feed straight through to their patterns of consumption, it is common knowledge that personal consumption is bolstered as a result of increases in the value of asset holdings (ie, the wealth effect). According to earlier studies on the wealth effect in the context of the Japanese economy, an increase of ¥10bn in the value of assets bolsters personal consumption to the tune of around ¥0.2-0.4bn (a range that excludes the lower and upper limits obtained in the earlier studies shown in Figure 6).

  Although it is difficult to generalize about the patterns of spending of a person whose assets have soared in value as a result of the sharp rise in the price of Bitcoin, if we calculate the wealth effect assuming that an increase of ¥10bn in the value of assets bolsters personal consumption by ¥0.3bn, as in the earlier studies, then the aforementioned rise of around ¥3.2trn in the value of assets is likely to generate an increase of around ¥96.0bn in personal consumption by our estimate.

  

  Given that Japan’s real GDP is around ¥522trn (2016 calendar year-basis), the y-y boost to GDP from this spending per se works out at just 0.07ppt. That said, given that the sharp rise in the price of Bitcoin occurred mainly in 2017 Q4, if that same wealth effect is replicated in 2018 Q1, we estimate it would boost annualized q-q real GDP growth by around 0.3ppt (= ¥96.0bn / quarterly GDP of ¥130trn x 4), which on a quarterly basis
  represents an impact on a scale that cannot be ignored (Figure 5).

  Yet while higher asset prices always result in greater consumer confidence, there is one notable difference between the wealth effect impact resulting from an increase in asset value caused by a rise in the price of Bitcoin, and an increase in asset value resulting from simply share price gains. Particularly in the case of Bitcoin, the high level of price volatility means that the formation of expectations vis-a-vis future asset value will doubtless be unstable compared with share prices and other financial assets on which the earlier studies were based.  This is why as part of its analysis, Nomura shows the discounted wealth effect of Bitcoin transactions based on the volatility of both Nikkei 225 share prices and the price of Bitcoin (fig 5 above).

  While it is unclear to what extent major Bitcoin holders who have increased their assets through the end of the year will bolster consumer spending through the beginning of year remains, Nomura is confident that there is a distinct possibility that spending, and thus GDP, will exceed expectations as a result of this factor.

  And from there, we go to the final unknown: how long before rising bitcoin prices, and associated wealth effect, become part of the institutionalized calculation of GDP, and how long before the BOJ feels compelled to step in and bailout bitcoin investors should a major crash send the cryptocurrency crashing. Because remember: the wealth effect works both ways, and what may boost Japan’s (and South Korean, and US, and so on) GDP today, will lead to an equal, or greater, decline tomorrow when the drop eventually happens.

  Are central banks ready for it?

   

  

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• China Beige Book Warns Economic Slowdown Has Begun

  When it comes to the global economy, few things matter as much as China, the trajectory of its economy and especially the pace and impulse of its credit creation, which is ironic because virtually all data coming out of China is fabricated and manipulated, and thoroughly untrustworthy, either on purpose or “by accident.”

  The latest example of the former was highlighted over the weekend, when we discussed that a nationwide Chinese audit found some local governments inflated revenue levels and raised debt illegally, once again making a mockery of China’s credibility on the global stage. As Bloomberg reported ten cities, counties or districts in the Yunnan, Hunan and Jilin provinces, as well as the southwestern city of Chongqing, inflated fiscal revenues by 1.55 billion yuan, the National Audit Office said in a statement on its website dated Dec. 8.

  An even more blatant example of the former was highlighted in October ahead of China’s Communist Party Congress, when the local securities watchdog literally “advised” some loss-making companies to avoid publishing quarterly results ahead of the Congress as authorities sought to ensure stock-market stability during the critical gathering of China’s political elite.  As a result, at least 17 Shenzhen-listed companies announced delays to their earnings reports from Oct. 20 to Oct. 24, up from three during the same period last year.

  However, now that the Party Congress is long over, China’s recent economic data offer a “warning for 2018” now that Beijing’s leaders are less motivated to prop up fake “growth” for purely optical purposes. That is the opinion of China Beige Book, and its president Leland Miller who said that “Incentives to ensure the economy was growing smartly at the time of the Communist Party Congress do not apply as next year wears on,” CBB president Leland Miller and chief economist Derek Scissors said in a report released on Wednesday.

  According to a private survey by CBB International, which collects anecdotal accounts similar to those in the Federal Reserve’s Beige Book, Q4 results already show some signs of a transition to slower growth,  The most recent sampling of 3,300 Chinese businesses showed:

  • Hiring stopped accelerating due to a strong base of comparison
  • Manufacturing orders also stopped accelerating 
  • Inventory accumulation “is too fast for comfort”
  • Sales-price inflation is weaker than in the second quarter
  • Wage gains have stopped accelerating

  Come to think of it, the CBB data is not that different from the official Chinese data which showed continued slowdown across most economic verticals:

   

  

  “None of these is genuinely alarming yet, and none would be out of place in a typical quarter,” the CBB’s Miller wrote. “But the first results after a CPC are not a typical quarter. If you expect a noticeable slowdown in 2018, the first post-Congress returns support those expectations.”

  To be sure, even here there is confusion: while at the 19th Party Congress, which marked the start of President Xi Jinping’s second five-year term, top leaders signaled less emphasis on pursuing economic growth at all costs, and greater dedication to deleveraging, during the main economic planning conclave in December which set priorities for 2018, they pledged to focus on “critical battles” against financial risk, pollution and poverty in coming years. Meanwhile, deleveraging – Xi Jinping’s endless crusade – was strangely forgotten. Indeed, as Goldman observed last week, “there was no explicit mention of deleveraging” as “recent policy statements increasingly use the phrase “control of leverage”, in our view likely a reflection of increasing realism in policy making.” This significant policy reversal prompted the WSJ last week to report that Beijing has effectively given up on its deleveraging pledge.

  Leverage or not, the table below – courtesy of Bloomberg – shows CBB’s breakdown of how support for the expansion may erode:

  

  Furthermore, evidence from the retail sector doesn’t support the government’s claims of a consumption boom, CBB said. While some large firms have strong sales and profitability improved this quarter, retail revenue growth finished last among major sectors, Miller and Scissors wrote.

  “Retail’s performance is decidedly uninspiring. Revenue, capex, and hiring are inferior to manufacturing, while inventory growth is much higher.”

  The good news: overall hiring has held up and was generally in line with the prior quarter, with 48% of firms staffing up and 3% cutting workers. “Job growth remained stronger at state firms than private, regardless of company size,” CBB’s survey found, although as we will show in a subsequent post, while hiring may remain strong, wages are tumbling in a troubling indication that China’s middle class is set for imminent disappointment and anger.

  Meanwhile, inflation in wages, prices, and input costs were also roughly the same as in the prior quarter, and were moderately faster than last year, the report said. Profit growth improved.

  That said, despite predictions of gloom as we enter 2018, the world’s second-largest economy proved bears fully wrong this year, exceeding analyst estimates in the first and second quarters, and is now on pace for the first full-year acceleration in growth since 2010, with GDP seen growing at 6.8% this year and 6.5% in 2018. There is a problem: this growth was on the back of a near record credit impulse since the February 2016 Shanghai accord, an impulse which is now over.

  

  Which means that all else equal, and absent another gargantuan credit injection in the coming months, China’s bears are about to have their day in the sun all over again.

  

  

• Lacy Hunt On The Unintended Consequences Of Federal Reserve Policies

  Authored by Mike Shedlock via www.themaven.net/mishtalk,

  The Financial Repression Authority interviewed Lacy Hunt, Chief Economist at Hoisington Management on Fed policies.

  The interview below first appeared on the FRA website along with a video.

  The emphasis in italics is mine.

  FRA: Hi, welcome to FRA’s Roundtable Insight. Today, we have Dr. Lacy Hunt. He’s an internationally recognized economist and the Executive V.P. and Chief Economist of Hoisington Investment Management Company, a firm that manages over $4.5 billion USD and specializing in the management of fixed income accounts for large institutional clients. He also served in the past as Senior Economist for the Federal Reserve Bank of Dallas, where he was a member of the Federal Reserve System Committee on Financial Analysis. Welcome. Dr. Hunt.

  Dr. Lacy Hunt: Nice to be with you, Richard.

  FRA: Great. I thought we’d have a discussion on a variety of topics relating to the economy and the financial markets. You recently mentioned that you thought this was the worst economic expansion recovery in U.S. history since 1790. Wow. Can you elaborate?

  Dr. Lacy Hunt: If you calculate the average growth rate in the expansions since 1790, this is a long-running expansion, but it’s the slowest and in the last 10 years the household sector lagged very, very badly. The rate of growth in real disposable household income per capita is only 0.9 percent per year. And in the last 12 months, we’re up only 0.6 percent per year. So it’s a long-running expansion, but it’s been a poor expansion. There are certainly problems with some of the earlier data, but this appears to be the slowest expansion since the turn of the 18th Century and our households are the main problem for the growth rate lag.

  FRA: And do you point a finger for this cause as primarily on the Federal Reserve or do you see structural changes happening to the economy?

  Dr. Lacy Hunt: I think that the main element suppressing growth is the heavily leveraged U.S. economy. We have too much public and private debt, and this debt does not generate an income stream for the aggregate economy. As a result of the prolonged indebtedness, which is on the verge of going much higher because of problems in the governmental sector, the economy is now experiencing very poor demographics. We have a baby bust, a household formation bust, and the lowest birth rate since 1937. These demographics are exacerbating the problems because we have too much of the wrong type of debt and thus the velocity of money has been falling since 1997. Velocity this year is only 1.43 percent, which is the lowest since 1949. Furthermore, the debt creates a situation where monetary policy capabilities are asymmetric. In other words, a lot of action is needed to provoke even a muted impact on the economy, whereas the slightest monetary tightening goes a long way in depressing economic activity. So the root cause of this underperformance is extreme indebtedness.

  FRA: And what about the Federal Reserve? How has it undermined the economy’s ability to grow?

  Dr. Lacy Hunt: The Fed’s most serious mistake was made in the 1990s up until 2006 during which they allowed the private sector to become extremely over-indebted with the wrong type of debt. And, in essence, I think that quantitative easing, through the push for higher stock prices, created more problems than it has solved for the economy. QE caused the corporate executives to switch funds from real capital investments into financial investments through the paying of higher dividends, buying shares of their own companies, and buying back their shares from others. While this type of action does produce a higher stock market; it doesn’t generate a higher standard of living. And so, Federal Reserve policy has not improved the economy, although it certainly has well served components of the economy.

  FRA: And due to that do you think that there’s been too much financial investment versus real economy investment in terms of diverting the economic financial resources away from the real economy?

  Dr. Lacy Hunt: I think that’s the principal problem. Business debt last year reached a record high relative to GDP. As I said earlier, Fed policies have created a higher stock market but have not generated an improved standard of living. When the Reserve undertook quantitative easing, it was a signal to the corporate executives that the Fed preferred and would protect financial investments. But that meant financial assets were preferred over real side investments. And so QT is intermingling with the growth-depressing effects of too much debt. And the debt levels are getting ready to move substantially higher in our governmental sector. Government debt is already approaching 106 percent of GDP, a record high with the exception of a brief period during World War II. And by 2030, federal debt will be approximately 125 percent of GDP. For a long time, we’ve known about the issues that would inflate the entitlements — such as the prior-mentioned demographic problems — but there is an increasing likelihood that new federal programs with expenditure increases will further accelerate the growth in federal debt. I think there is clear evidence that increases in federal debt at these high levels relative to GDP over any measurable length of time, reduces economic activity. Thus, the multiplier is not a positive but negative figure, or otherwise exactly what economist David Ricardo hypothesized in his 1821 work. I have looked at the relationship between per capita changes in real GDP and government debt per capita and the relationship is negative, not positive. And so, we’re trying to solve an indebtedness problem by taking on more debt. You can get intermittent spurts of economic activity and inflation, but ultimately the debt is a millstone around the economy’s neck.

  FRA: So would you say that we have migrated to a sort of financial economy?

  Dr. Lacy Hunt: Let me give you a couple of examples. There’s so much liquidity in the financial markets, particularly the stock market, that a lot of the economic news is constructively interpreted even when it’s unconstructive. Virtually the world believes that the United States is experiencing large job gains and the idea that such productivity may be incorrect is hardly considered. But the rate of growth in payroll employment on a 12-month basis peaked at 2.4 percent in early 2015 and for the last 12 months, has sunk to 1.4 percent. What is even more critical — if you look at just the expansions and don’t include the recessions since 1968 – is that the average growth in employment in an expansion year was 1.9 percent. And in the last 12 months, we are half a percentage point under that figure. Yet, given these numbers, there is an erroneous perception that the employment gains are strong. And this view undermines the improvement in the standard of living. And because of the liquidity and the need of some investors to fully participate in the rising stock market, investors tend to overlook other important developments. If we go back to the 12 months ending November of 2015, real average hourly earnings were up about 2.5 percent. And in the latest 12 months, real average hourly earnings gained a miniscule 0.2 percent. The liquidity tends to push the focus away from the more realistic interpretation of the economy for certain types of assets.

  However, the weak performance overall and the deceleration in some of the indicators that I just referred to is not unnoticed by the bond market. So, we have a dichotomy in which the stock market is strongly up but the long-term bond yields are down. Now, the short-term yields are up because they are under the control or heavy influence of the Federal Reserve. The Federal Reserve is in the process of raising the short-term rates and winding down their portfolio. They sold 20 billion dollars of government agency securities in October and November, pushing up the short-term rates. Erstwhile, the long-term rates — which look at some of the more important economic fundamentals — are actually declining.

  Another element not in the public understanding, since the Federal Reserve no longer produces this sort of monetary analysis, is a very sharp slowdown in the money supply’s rate of growth, bank loans, and within important credit aggregates. Last year, the M2 money supply was up 7 percent. In the latest 12 months, it decelerated to less than 4.5 percent. The rate of growth in bank loans and commercial paper, which topped out on a 12- month basis about 9 percent, is now under 4 percent. So the Fed is raising the short-term rates, reducing the monetary base, and causing a tightening in the financial side of the economy. Some investors understand what is happening and yet it’s not in the general psyche because such monetary analysis is increasingly rare.

  However, another more public indicator is the very dramatic flattening of the yield curve. And when the yield curve flattens in such a way, first of all, it’s a symptom that monetary restraint is beginning to bite. Now, the slowdown in money supply growth and the bank credit flattening of the yield curve will occur well before there is any noticeable impact on a broad array of economic indicators or long lags in monetary policy. But when the yield curve starts flattening, that intensifies the effect of the monetary tightening because it takes away or, at the very least, greatly reduces the profitability of the banks and all those that act like banks. Banks make a profit by borrowing short and lending long. When those spreads recede, bank profitability is hurt, particularly for the higher, riskier types of bank loans since not enough spread exists to cover the risk premium. So the banks begin to pull back, further intensifying the restraint pressing on economic growth. To the vast majority of investors, we have an economy that is apparently doing well, but in fact there are elements right beneath the surface that strongly suggest to me that the outlook for 2018 is considerably more guarded than conventional wisdom implies.

  FRA: And do you see the potential for an inverted yield curve in the near future?

  Dr. Lacy Hunt: I’m not sure that we will have to invert because the economy is so heavily indebted and the velocity of money is its lowest since 1949. Now, a number of people have pointed out that we typically invert before a recession and historically such inversions have been the case most of the time — but not always if you go back far enough in time — and you should since this is not a normal economy. For example, money supply growth since 1900 has averaged about 7 percent per annum, whereas, currently, the rate of growth in M2 is about 36 percent below the long-term average, indicating a very weak growth rate. And the velocity of money is lower than all of the years since 1942 — with the exception of 7 years — and the economy has never been this heavily indebted. And so the yield curve could possibly approach inversion, but it may or may not occur or stay there very long because at that stage of the game, the flattening of the yield curve will greatly intensify all the other effects — the reduction in the reserve, monetary, and credit aggregates, as well as the weakness in velocity. And when this reduction becomes apparent, the Federal Reserve will not be able to reverse gears quickly enough to ameliorate the impact produced upon future economic growth.

  FRA: So do you still see a secular low in bond yields on the long into the yield curve remaining in the future sometime?

  Dr. Lacy Hunt: The lows have not been seen. The path there will remain extremely volatile. We will have episodes in which the long yields rise. My attitude is that the long yields can go up over the short run for any number of causes. While many elements work out of the system in the long end, yields cannot stay up. When yields go up — especially now that the yield curve is flattening — this intensifies monetary restraint, which puts downward pressure on commodities. This puts upward pressure on the value of the dollar and cuts back on the lending operations. Something I think has been somewhat overlooked in general euphoria over the strength of economic indicators, is the that commercial and industrial loans for all of the banks in the United States are now only up one-tenth of one percent in the last 12 months. There are forward-looking elements that have historically been very important for signaling that change is ahead. They don’t tell us the timing — timing is always difficult — but they are flashing signals that should be observed.

  FRA: And as this plays out, do you see monetary policy and fiscal policy is changing, like will we get fiscal policy stimulus? Will there be a change in monetary policy and how will that look like?

  Dr. Lacy Hunt: Here’s my attitude: the new federal initiatives, whether tax cuts or infrastructure or otherwise will not provide a boost to the economy if they are funded with increases in debt — that’s where we’re at. And by the way, it’s been that way for some time. If you go back to 2009, we had a one-trillion-dollar stimulus package that was said to be inflationary and was going to boost economic growth, but yet we still had this very poor expansion and little inflation except for intermittent bouts here and there, largely from highly-priced inelastic goods. All the while, the inflation rate has trended lower.

  For example, when President Reagan cut taxes, government debt was 31 percent of GDP and now that’s 106 percent on its way to 120-125 percent. And so if you go back and if you read Ricardo’s great article in 1821, he was asked whether it made a difference as to whether the Napoleonic wars were financed by taxes or by borrowing. Ricardo said that, theoretically, either way private sector activity was going to be suppressed. Now we have a lot of evidence, including some that I produced, that the government multiplier is negative, not positive, over a three-year period. Thus, the tax cuts may work for a very short while, but not on balance. And if the tax cuts were revenue-neutral and financed by reductions in government expenditures that would be a positive since the evidence shows tax multipliers are more favorable than expenditure multipliers. Such a theoretical proposal would provide greater efficiency for private sector spending and government spending. There’s also evidence that you would lower the cost of capital, but that’s not what we’re talking about is it? We’re talking about a debt-financed tax cut and we’re not talking about a revenue-neutral infrastructure plan, just as we were not talking about a revenue-neutral stimulus package in 2009. We’re talking about the debt-financed variety of tax cuts and at this stage of the game, this will make us more vulnerable, except for a few fleeting instances.

  I will say this: when you have a debt-financed infrastructure program or tax cut, there will be pockets within the economy that will benefit, but the aggregate economic performance will not benefit and so fiscal policy, as I see it, is not really going to be helpful. The risk is that the debt buildup will add to the problems. There is extensive academic research indicating that when government debt rises above 90 percent of GDP for more than five years, this trend will reduce the economy’s growth rate by a third. Remember, we’re at 106 percent debt to GDP and there’s evidence these higher levels of debt have a non-linear effect. In other words, we use up growth at a faster pace. And there’s a lot of evidence from the available data that we’re even losing a half of our growth rate from the trend. For example, GDP has risen at 2.1 percent per capita since 1790. The latest 10 years produced a reduction to 1.0 percent. And so we should have lost only seven-tenths or come down at 1.3 over 1 but we didn’t and this is a consequence that we have to deal with. We’re not in a position to ignore the debt levels. Fiscal policy can be talked about, we can debate about it, and we can proclaim its benefits, but I don’t see them in the current environment just as I didn’t see them in 2009. I would change my tune if they were revenue-neutral, but that’s not the issue here.

  To me, inflation is a money-price-wage spiral not a wage-price spiral as with the Phillips curve. The way inflations begin is by money supply growth acceleration not being offset by weakness in velocity, which shifts the aggregate demand curve inward. Remember, the aggregate demand curve is equal to money times the velocity by algebraic substitution as evidenced in all the leading textbooks on macroeconomics. So you have declines in the money supply and velocity, which will make the aggregate demand curve shift inward over time. This shift gives you a lower price level and a lower level of real GDP. It doesn’t happen every quarter or even every year, but it’s the basic trend. Thus, monetary policy is in the process not of decelerating money supply growth and by a significant amount. If the Fed adheres to their schedule of quantitative tightening, I calculate M2 will grow by the end of the first quarter – it’s currently running around four and a half percent – and the year over year growth rate will be down to less than 3 percent. And so monetary policy is taking steps to lower the reserve monetary and credit aggregates, and these actions will further flatten the curve because they can press the short rates upward. But I think the long-term investors will understand that the inflationary prospects on a fundamental basis are weakening not strengthening.

  FRA: And do you see these trends as being exacerbated on the emerging government pension fund crisis? Could there be more debt used to solve that like for bailouts? Do you see that potentially happening?

  Dr. Lacy Hunt: Well the main problem with government debt is that we’re going to have approximately one million folks a year reach age 70 in the next 14 to 15 years and we’ve known that this was coming, but we didn’t prepare for it. We’ve made a lot of promises under Social Security Medicare and the Affordable Care Act and government debt will have to be used to fund the entitlement benefits — I don’t see any other way around it. Another overlooked problem is that the actual federal fiscal situation is much worse than these surface numbers. For example, in the last three years, the budget deficit worsened each year. If you sum the budget deficits for 2015, 2016 and 2017, the sum is 1.2 trillion, but a lot of what was previously called “outlays” have been moved off budget — we call them investments (such as student loans) and there are other examples. The actual increase in federal debt in the last three years is 3.2 trillion. So the budget deficit is actually greatly understating what is happening to the level of federal debt which wasn’t always the case. Furthermore, the deficit was made worse by a 2015 bipartisan deal between Congress and the White House. And while neither party is blameless — they both agreed on the deal — yet it doesn’t change the fact that the federal situation is deteriorating and at a much worse rate than the deficit numbers themselves indicate.

  FRA: And what about for state and local jurisdiction locales, in terms of their government pension funds? Could there be federal level bailouts at that level?

  Dr. Lacy Hunt: Again, what are they going to bail them out with? You’re going to have to sell Federal Securities. And one of the multipliers on new sales of Federal debt is negative, not positive. Forget what was taught you in your macroeconomic class 30, 20, or even 15 years ago. When I was in graduate school, I was taught that the government multiplier was somewhere between four and five percent. Now, it looks like the multiplier is at best zero and even possibly slightly negative.

  FRA: Great insight as always. How can our listeners learn more about your work, Dr. Hunt?

  Dr. Lacy Hunt: We put out a quarterly letter as a public service. Write to us at hoisingtonmgt.com and we’ll put your name on the subscription list. We don’t spam you with marketing so please go ahead and subscribe.

  FRA: Okay, great. Thank you very much for being on the Program, Dr. Hunt. Thank you.

  Dr. Lacy Hunt: My pleasure Richard. Nice to be with you

  Economics as Taught

  Note Lacy's comments on what he learned in graduate school. Lacy once told me that he had to "unlearn" nearly everything he was taught in school about economic.

  Multiple generations of economists have been trained to believe inflation is a good thing, saving is bad, that there are no consequences for piling up debt.

   

  

  

• Vanity Fair Editors Relentlessly Attacked Over "Don't-Run-Again-Hillary" Satirical Video

  It appears the McResistance is on the warpath once again, and this time they're going after Vanity Fair, which to the surprise of many published a satirical video about Hillary Clinton's future prospects in the days just before Christmas with the caption, "Maybe it's time for Hillary Clinton to take up a new hobby in 2018" as part of a broader series on New Year's resolutions. 

  "Take up a new hobby in the new year," suggested Vanity Fair writer Maya Kosoff. "Volunteer work, knitting, improv comedy – literally anything that will keep you from running again."

  Editor John Kelly, meanwhile, suggested that Clinton "finally put away your James Comey voodoo doll." And added further with cheerful snark, "We all know you think James Comey cost you the election and he might have, but so did a handful of other things. It’s a year later and time to move on."

  Maybe it's time for Hillary Clinton to take up a new hobby in 2018 pic.twitter.com/sbE78rA5At

  — VANITY FAIR (@VanityFair) December 23, 2017

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  Editors from the magazine’s politics and business section, Hive, published the one-minute video entitled "Six New Year's Resolutions for Hillary Clinton" featuring themselves holding Champagne flutes while giving New Year's advice, which includes telling the former secretary of state and failed presidential candidate to give up and retire in 2018.

  Though the video is fast approaching one million views via twitter, it more noticeably has evoked an avalanche of anger and outrage in the form of over 10,000 twitter comments – the overwhelming majority of which express shock and indignation, with repeat calls for Vanity Fair to remove the video. 

  One of the reporters for @VanityFair who appeared in the "don't-run-again-Hillary" video, @mekosoff, has locked her account after being subjected to the most foul vitriol and abuse, endlessly, over several days.

  — Glenn Greenwald (@ggreenwald) December 27, 2017

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  At the same time Hillary supporters including celebrities, journalists, and political commentators voiced their anger using the "#CancelVanityFair" hashtag which garnered over 30,000 tweets. And predictably it didn't take long for sexism to become the driving critique with Peter Daou, a former Clinton adviser, slamming the magazine for insulting “one of the most accomplished women in the history of the United States” while adding that he's long defended Clinton from such "sexist attacks."

  But it appears the magazine caved by issuing a vague blanket apology, though the video hasn't been removed. A Vanity Fair spokesperson said, "It was an attempt at humor and we regret that it missed the mark." 

  Of course, this didn't placate the trolls as "the resistance" thinks Hillary Clinton should remain uniquely immune from being the object of satire and didn't take the magazine to task over any other satirical videos in the same series. The New Year’s resolution video for Trump, for example, advises the president to delete his Twitter account and drink more Diet Coke in 2018. The Hive editors also took shots at Sarah Huckabee Sanders and Gary Cohn among others.

  Meanwhile the creators of the video, which in its mockery is no harsher than your average Saturday Night Live skit, have been trolled relentlessly by Hillary supporters forcing at least one to lock her social media accounts. According to The Intercept's Glenn Greenwald, "One of the reporters for Vanity Fair who appeared in the 'don't-run-again-Hillary' video, Maya Kosoff, has locked her account after being subjected to the most foul vitriol and abuse, endlessly, over several days."

  Below are a handful of select tweets which capture the outrage over the simple satirical Hillary video… it appears the resistance mob will attack even Vanity Fair for crossing narrowly enforced boundaries. With such sensitivity 2018 is sure to be loads of fun.

  So @VanityFair decided that the best way to end 2017 was to take a repulsive cheap shot at @HillaryClinton, one of the most accomplished women in the history of the United States.

  Now #CancelVanityFair is moving.

  — Peter Daou (@peterdaou) December 27, 2017

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  I ended 2015 defending Hillary Clinton from sexist attacks.
  I ended 2016 defending Hillary Clinton from sexist attacks.
  I'm ending 2017 defending @HillaryClinton from sexist attacks.
  So much for my Twitter break…

  — Peter Daou (@peterdaou) December 27, 2017

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  So, Vanity Fair, a woman's magazine has decided that one of the most accomplished women in the USA, @HillaryClinton should quietly fade away because men don't want to hear her. No, no, no. This is not how we empower women. #cancelvanityfair

  — Not sitting down (@Deenie65Nadine) December 27, 2017

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  Hey STOP TELLING WOMEN WHAT THE F-CK THEY SHOULD DO OR CAN DO. Get over your mommy issues.

  — Patricia Arquette (@PattyArquette) December 27, 2017

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  Doing cutesy mean satire to appeal to millennials' hatred of Hillary Clinton is beneath you. Or it used to be. The only way to save yourself is to do this to Bernie and Biden. Oh, and FU to everyone who participated.

  — HRC persists ???? (@HRCpersists) December 26, 2017

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  I’d love to know who pitched the idea of putting @HillaryClinton out to pasture like an old brood mare but are perfectly fine with Bernie sticking his 2 cents into every discussion. #CancelVanityFair

  — VeryVexingIndeed???? (@MyPoorNerves__) December 27, 2017

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  @EGraydonCarter Go to hell. I went to @HillaryClinton book tour @EmanuEl_NYC She was dignified, erudite and globally knowledgeable What have these 6 white kids accomplished? They will never be 1/2 the person Hillary is. Publicly apologize or FU #CancelVanityFair

  — mimi eressim (@mimi1bandolera) December 27, 2017

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  I am sick and tired of Hillary being used as a punching bag.

  I am through with the pettiness, the cruelty, the rank misogyny.

  The fact that @VanityFair gave this crap a platform tells me they do not need my patronage or my money.

  #UnfollowVanityFair
  #CancelVanityFair

  — LYSSA ?????????????? (@Sunnysgrl62) December 27, 2017

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• Hannity Promises To Expose CNN & NBC News In "EpicFail"

  "Tick tock."

  

  In a mysterious tweet yesterday evening to his 3.19 million followers, Fox News' Sean Hannity offered a preview of what is to come from his show next week, warning that he "will expose" CNN and NBC News for what he calls a "#EpicFail."

  He followed up last night's tweet…

  One week from tonight i will expose @CNN and @NBCNews news for #EpicFail. Happy New Year to all irredeemable deplorables. 2018, cling to God Faith Bibles religion.

  — Sean Hannity (@seanhannity) December 27, 2017

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  With another tonight, highlighting the "fake news" being spewed forth from various media entities…

  So @CNN fake news, HRC’s campaign PAID for the RUSSIAN lies in the dossier. That sounds like COLLUSION!! Lies paid for, to RIG an election. https://t.co/b9G6k41LMT

  — Sean Hannity (@seanhannity) December 27, 2017

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  We will just have to be patient to discover what he has in store for CNN and NBC, but as The Hill notes, Hannity has focused on what he calls "the destroy Trump fake news media" on most nights during his Fox News prime-time opinion program, particularly during his opening monologues that invariably include clips of CNN and MSNBC hosts and pundits going after the president in hyperbolic fashion.

  Like many cable news hosts this week, Hannity is on vacation the week between Christmas and New Year's Day. He will return to the airwaves on Jan. 2.

  The past year has been a good one for the 55-year-old staunch conservative, with his candidate of choice in Trump taking office, his move from 10 p.m. to the more-watched time slot of 9 p.m. and his finish on top of the cable news ratings race following the move, averaging 3.2 million viewers.

  

  

• The Herd Mind

  Authored by Dan Sanchez via The Foundation for Economic Education,

  The State is a state of mind; it is the herd mindset itself.

  

  Randolph Bourne famously wrote, “War is the health of the State.” This has long been the byword for anti-war, anti-state libertarians, and rightly so. But Bourne did not mean exactly what most libertarians take this phrase to mean. To understand the maxim’s original meaning, as Bourne used it in his great unfinished essay “The State,” one must understand his distinctions among three concepts that are often conflated: Country, State, and Government.

  For Bourne, a Country (or Nation) is a group of individuals bound together by cultural affinity. A State is a Country/Nation collectively mobilized for attack or protection. As he distinguished between the two:

  “Country is a concept of peace, of tolerance, of living and letting live. But State is essentially a concept of power, of competition: it signifies a group in its aggressive aspects.”

  The State and the Government 

  And Government, according to Bourne, “is the machinery by which the Nation, organized as a State, carries out its State functions” and “a framework of the administration of laws, and the carrying out of the public force.”

  What libertarians commonly refer to as “the State,” Bourne termed “the Government” instead. So, the way libertarians often interpret his famous aphorism is what Bourne would have expressed if he had written, “War is the health of the Government.” This also happens to be true, but it is not what he meant.

  For Bourne, the State is not a distinct ruling body subsisting extractively on the ruled, i.e., a “gang of thieves writ large,” as the great Murray Rothbard incisively conceived it. Rather, he saw it as a certain orientation of a whole people: a spiritual phenomenon pervading an entire populace that animates and empowers such a ruling body. As Bourne expressed it:

  “Government is the idea of the State put into practical operation in the hands of definite, con­crete, fallible men. It is the visible sign of the invisible grace. It is the word made flesh. And it has necessarily the limitations inherent in all practicality. Government is the only form in which we can en­vis­age the State, but it is by no means identical with it. That the State is a mystical conception is some­thing that must never be for­got­ten. Its glam­or and its significance linger be­hind the frame­work of Government and direct its activities.”

  In peacetime, Bourne explained, the State is largely relegated to the background; individuals are then more concerned with their own affairs and purposes. But during the build-up to war, and especially following its breakout, the foreign enemy looms large in the public imagination. Hence, the Country is overtaken by war fever and develops what Garet Garett called a “complex of vaunting and fear.” This hybrid mania of boastful belligerence and timorous terror (“fight-or-flight”) causes the populace to regress from a civilization to a herd. The people seek safety in numbers: in a multitude unified for a single purpose (a “great end”) and directed by a single agency. The varied dance of individuals gives way to the uniform huddle and stampede of the unitary drove, with the Government as drover.

  As Bourne wrote:

  “The State is the organization of the herd to act offensively or defensively against another herd similarly organized.”

  And in wartime, the “mystical conception” of the State “comes into its own” as the “herd-sense” becomes dominant in the Country and the “aggressive aspects” of the group come to the fore. This is what Bourne meant by, “War is the health of the State.” The dictum speaks to the flourishing of an ideal and the resulting transformation of a whole society, not merely the aggrandizement of a Government.

  Yet, war is also the health of the Government, which is the single directing agency to whose banner the State-minded masses flock. Under the perceived exigencies of war, the people:

  “…proceed to allow them­selves to be regimented, coerced, de­ranged in all the environments of their lives, and turned into a solid manufactory of destruction to­ward whatever other people may have, in the appointed scheme of things, come with­in the range of the Government’s disapprobation. The cit­i­zen throws off his con­tempt and indifference to Government, identifies him­self with its purposes, revives all his military memories and symbols, and the State once more walks, an au­gust presence, through the imaginations of men.”

  Economically, this means that the manpower and resources of the Country undergo “mobilization”: a vast redirection away from the provision of individual consumer wants and toward the all-important war effort. In this way too, the Government swells in power and grandeur, as the consumer-directed market economy is supplanted by the Government-directed “War Economy,” or even “War Socialism” (Kriegssozialismus, as the Germans called it in World War I).

  The "General Will"

  In the fever of war, the individual will is sacrificed for the “General Will,” which ostensibly expresses itself through the Government. Individuals renounce their identities for the sake of uniting Voltron-like into a State, like the gestalt “Leviathan” pictured on the cover of Thomas Hobbes’s book by that name.

  

  As Bourne put it:

  “War sends the cur­rent of purpose and activity flow­ing down to the lowest lev­els of the herd, and to its re­mote branches. All the activities of society are linked together as fast as possible to this central purpose of making a military offensive or military defense, and the State be­comes what in peace­times it has vainly struggled to be­come—the inexorable arbiter and determinant of men’s businesses and attitudes and opinions.”

  The herd is mobilized, not only against the foreign foe, but against any dissidents within the group who resist assimilation into the Borg-like hive- or herd-mind and who refuse to join the swarm or stampede into war: in other words, against “enemies foreign and domestic.”

  

   As Bourne explained:

  “The State is a jealous God and will brook no rivals. Its sovereignty must pervade every­one and all feel­ing must be run into the stereo­typed forms of romantic patriotic militarism which is the traditional expression of the State herd-feeling. (…) In this great herd-machinery, dis­sent is like sand in the bearings. The State ideal is primarily a sort of blind animal push to­wards military unity. Any interference with that unity turns the whole vast impulse to­wards crush­ing it.”

  The State crushes dissent through Government policies restricting civil liberties, but also through private citizens acting as “amateur agents” of the Government: who berate skeptics into silence, report critics to the authorities for “disloyalty,” or even take the security of Herd and Homeland into their own violent hands. Remember that in Bourne’s framework, the Government is by no means identical with the State. As such, the State can animate a private citizen even more than it does an officeholder. As Bourne remarked:

  “In every country we have seen groups that were more loyal than the King—more patriotic than the Government—the Ulsterites in Great Britain, the Junkers in Prussia, l’Action Francaise in France, our patrioteers in America. These groups exist to keep the steer­ing wheel of the State straight, and they pre­vent the nation from ever veer­ing very far from the State ideal.”

  This an extremely apt description of the Fox News types who castigate Barack Obama for his lack of “patriotism” and the insufficiency of his war-making. The spirit of the State dwells within Sean Hannity even more so than it dwells within the President of the United States. What is ironic is that a war-drumming jingo like Hannity usually imagines himself a paragon of manhood; yet his dull, stampeding herd mindset marks him out as less of a man, and more of a beast.

  Bourne's Legacy 

  Randolph Bourne was not a libertarian, but a dissident progressive. Still, we libertarians can learn a great deal from him. For instance, perhaps our terminology, as penetrating and illuminating as it is, has led us to focus too much on the herdsmen in office who drive, shear, milk, and butcher us, and not enough on the more fundamental problem: our society’s bovine propensity to become a manipulable herd in the first place, especially when spooked. Occasionally thinking in terms of Bourne’s typology can be a useful corrective in this regard.

  Bourne’s terminology and analysis also shed light on the all-important question of how to achieve liberation. The State lives in the minds of the Government’s victims. Simply overthrowing a Government will only spook the herd even worse. The State will not only survive such an overthrow, but it will likely even feed off of it, as the panicked herd acts even more herd-like in the crisis, granting new herdsmen even more tyrannical power than the old ones had.

  The State is a state of mind; it is the herd mindset itself. As such, it can only be overthrown in the battleground of the mind. Once the State is spiritually dethroned and the populace fully transfigures from herd to civilization, the “Government,” like a shepherd without a flock, will no longer even merit its designation. It will then merely be a heavily armed, but even more heavily outnumbered, gang of rustlers writ small.

  Accomplishing this becomes ever more urgent as Americans are driven into ever more calamitous wars. It is increasingly apparent that breaking the spell of the State that turns men into beasts may be the only way we can avoid being driven to self-destruction by alarmist warmongers and their terrorist symbionts, like buffalo being stampeded off a cliff by herd-spooking hunters.

   

  

  

• Top Russian General Accuses US Of Training ISIS At Syrian Border Base

  From ISIS To US-Backed "New Syrian Army" – "They Change Their Spots" Russia Alleges

  According to a new Reuters report, the chief of the Russian General Staff has accused the United States of hosting a training facility for ISIS fighters in Syria along the Syria-Iraq border. Al-Tanf base on Syria's southeast side has been under the control of the US-backed "New Syrian Army" and their US special forces advisers since the area was captured from ISIS in August of 2016.

  Russia has previously called the base a 100km wide “black hole” operated by the US wherein an assortment of unaccountable armed groups and militants can operate freely. That American troops have long been deployed there was previously confirmed through multiple photographs and videos released early in the summer of 2017 which showed US elite soldiers on active patrols with Syrian rebel factions associated with the Free Syrian Army (or FSA, elements of which were more recently renamed the New Syrian Army).

  
  Photos above and below were made public last summer which shows ongoing training of "New Syrian Army" fighters by US military advisers. Russia now alleges ISIS members have sought the protection of the base and area under its control. Russia's top general said this week, "They are practically Islamic State. But after they are worked with, they change their spots and take on another name." The images were originally published through Hammurabi’s Justice News, a news outlet affiliated with Maghaweir al Thowra (MaT) – a faction which is the latest incarnation of the US-created New Syrian Army. Via the Long War Journal

  
  Image produced by Maghaweir al Thowra (MaT) – the latest incarnation of the US-created New Syrian Army.

  The head of Russia’s General Staff, Valery Gerasimov, made the allegations in an interview on Wednesday with Komsomolskaya Pravda newspaper, saying that the US base is illegal (and presumably the other roughly up to 10 or more known bases) as the Americans have no right to violate Syrian sovereignty and have not been invited to be there by Damascus in the first place. Russian military officials have recently indicated that the Syrian Army has essentially cut off the area and isolated US-backed forces' ability to expand. If true this raises significant doubts concerning how the presumed "anti-ISIL" mission of US coalition forces are valid or relevant, or how a direct US military presence in the remote southeast region could be justified.

  Early this month Russian President Vladimir Putin declared that the Islamic State had been destroyed and no longer holds cities or significant territory, though insurgent pockets remain. And at the same time the Russian "mission accomplished" announcement was being widely reported, the Pentagon said US forces would stay in Syria "as long as we need to, to support our partners and prevent the return of terrorist groups." Meanwhile, this week Russia has moved forward with plans brokered with the Syrian government to maintain two permanent Russian military bases on the Mediterranean – the naval station at Tartus and Khmeimim airbase outside of Latakia.

  General Gerasimov told the Russian newspaper that the defense ministry possessed drone and satellite footage confirming large numbers of ISIS-affiliated fighters at the US base at Tanf. "They are in reality being trained there,” Gerasimov said, and continued “They are practically Islamic State. But after they are worked with, they change their spots and take on another name. Their task is to destabilize the situation."

  Thus the allegation appears to be that as ISIS loses territory and is rooted out of various pockets in the east, its fighters then conveniently declare their allegiance to US-backed FSA/New Syrian Army factions, after which they enter training programs hosted by US advisers. 

  Gerasimov further indicated that some 400 militants recently left a town in the southern al-Hasakah Province for al-Tanf, launching an offensive on the Syrian forces from the eastern bank of Euphrates, after the main ISIS forces were routed there. Russia has over the past months accused the US coalition of essentially relocating ISIS fighters in order to allow their redeploying to locations where they could attack and pressure Syrian and Russian aligned forces.

  In one major instance related to the coalition and SDF victory over ISIS in Raqqa, a bombshell investigative report produced by no less than BBC News confirmed that Russia has certainly had reason to be suspicious of the Pentagon's motives and strategy inside Syria. According the November BBC report:

  The BBC has uncovered details of a secret deal that let hundreds of Islamic State fighters and their families escape from Raqqa, under the gaze of the US and British-led coalition and Kurdish-led forces who control the city. A convoy included some of IS's most notorious members and – despite reassurances – dozens of foreign fighters. Some of those have spread out across Syria, even making it as far as Turkey.

  And concerning the latest accusations of US-ISIS complicity in al-Tanf, Gen. Gerasimov further said the pattern continues: "The most important is that we have been seeing the militants advancing from there for several months. When the control [of the Syrian forces] loosened, as many as 350 militants left the area." He further said of the Russian-Syrian fight against ISIS in the area, "We took timely measures…they have suffered a defeat, these forces were destroyed. There were captives from these camps. It is clear that training is underway at those camps."

  And he continued, "Instead of the New Syrian Army, mobile ISIS groups, like a jack in the box, carry out sabotage and terrorist attacks against Syrian troops and civilians from there." And though the pretext for the Tanf base’s creation was "the need to conduct operations against ISIS" – the rapid recent demise of ISIS proves that the Americans have ulterior motives, according to the Russian general.

  Meanwhile, Syrian President Bashar al-Assad has heightened his rhetoric of late regarding uninvited foreign forces operating on Syrian soil. He said last week in a televised interview which was subsequently posted to multiple Syrian official social media channels: "Those who work with foreigners against their army are traitors." Assad has also on multiple occasions promised to return all of natural Syria to the control of the Syrian government and army.

  

  

• "$1MM Per Minute In Salaries, $22BN Per Year In Vacation Pay" And Other Fun Facts About The Federal Workforce

  The folks at Open The Books decided to take a deep dive into the salaries of 1.97 million federal employees, using data collected from the Office Of Personnel Management and the USPS via FOIA requests, and the endless examples of excessive pay and pure waste are sure to make you sick, if not downright suicidal.  Here are just some of the key takeaways as summarized by OTB:

  1. The federal government pays its disclosed workforce $1 million per minute, $66 million per hour, and $524 million per day. In FY2016, the federal government disclosed 1.97 million employees at a cash compensation cost of $136.3 billion.

   

  2. Over a six-year period (FY2010-2016), the number of federal employees making $200,000 or more has increased by 165 percent; those making $150,000 or more has grown by 60 percent; and those making more than $100,000 has increased by 37 percent.

   

  3. On average, federal employees are given 10 federal holidays, 13 sick days, and 20 vacation days per year. If each employee used 13 sick days and took 20 vacation days in addition to the 10 federal holidays, it would cost taxpayers an estimated $22.6 billion annually.

   

  4. In FY2016, a total 406,960 employees made six-figure incomes – that’s roughly one in five disclosed federal employees. Furthermore, 29,852 federal employees out-earned each of the 50 state governors receiving more than $190,823.

   

  5. At 78 out of the 122 independent agencies and departments we studied, the average employee compensation exceeded $100,000 in FY2016.

   

  

   

  6. With 326 employees at a total cash compensation of $28.8 million, we found a federal agency in San Francisco – Presidio Trust – paid out three of the top four federal bonuses including the largest in the federal government in FY2016. The biggest bonus went to an HR Manager in charge of payroll for $141,525.

   

  7. Together, the United States Postal Service (USPS) and the Department of Veterans Affairs (VA) employ more than half of the disclosed federal workforce. As the largest civilian employer within the federal government, the USPS employed 32 percent of all disclosed federal employees, totaling 621,523 people on payroll in FY2016. The VA employed the second most employees with 372,614 or 19 percent of the disclosed federal workforce.

   

  8. Only one-third of the 35,000 lawyers in the federal workforce work at the Department of Justice. The entire staff of federal lawyers earned $4.8 billion in FY2016.

   

  9. The Department of Veterans Affairs (VA) employed 3,498 police officers at a total cost of $172 million in FY2016. When asked about corresponding crime statistics, the VA was unable to provide any information on the number of crimes or incidents.

   

  10. There are an additional 2 million undisclosed employees at the Department of Defense and in the active military. Their estimated cash compensation value, combined with $1 billion in undisclosed bonuses and $125 billion in hidden pension data, amounts to roughly $221 billion in undisclosed federal cash compensation per year.

  So where is all the money going?  As it turns out, federal employees working in “the beltway” and California receive 22% of all federal compensation dollars.  Meanwhile, employees located in just the top 10 states received 41% ($55.5 billion).  Of course, out of that top 10, only two states, Georgia and Texas, consistently vote ‘red’ in national elections which may help to explain why the Trump administration has struggled with leaks from a variety of agencies since moving into the White House.

  

  The growth in the number of federal employees earning over $150,000 per year is simply mind numbing.  Keep in mind, these salaries are doled out regardless of whether or not these employees take advantage of their 8 weeks of paid time off every year. 

  There are now 29,852 federal employees who out-earn every governor of the 50 states, receiving more than $190,823 each. Over a six-year period (FY2010-2016), the number of federal employees making $200,000 or more has increased by 165 percent, those making $150,000 or more has grown by 60 percent, and those making more than $100,000 has increased by 37 percent.

   

  Of the roughly 2 million disclosed federal employees, 406,960 made six figures in cash compensation in FY2016. Additionally, 24,799 federal employees earned $200,000 or more while 3,154 made $300,000 or more. The top-paid federal employee overall, Dr. David Harpole, made $403,849 as a thoracic and cardiac surgeon for the Department of Veterans Affairs. This department employs more top earners than any other department or independent agency

  

  As if the above isn’t bad enough, things get really disturbing when you learn that various agencies employee an army of “Interior Designers” making up to $150,000 per year…

  The Department of State displayed the most egregious trends in regards to interior designers, doling out – on average – $122,093 to each of its 24 interior designers. The highest-paid interior design employees, however, worked for the Department of Treasury, earning $132,438, on average. In all, the federal government paid 40 interior designers more than $100,000 each.

  

  …and an even larger army of “Gardeners” making up to $160,000.

  

  Perhaps it’s time for a career change?  Here’s an idea…you could pick up a job mowing the lawn at the State Department for 40 hours a week at a salary of $141,555 and then use the other 128 hours of every week to get an Interior Design gig at Treasury for $152,687…all the while collecting two pensions and making nearly 5x the average American household yet still working less hours despite having two jobs…

  Here is the full report from Open The Books:

  

  

• Five Things Professors Actually Said In 2017

  Via Campus Reform,

  Most Americans expect college professors to be beacons of knowledge and wisdom, or at least to exercise more maturity than their teenage students.

  

  Every year, however, Campus Reform comes across professors who unashamedly make outrageous, preposterous, and downright absurd remarks in their classrooms and on social media, denigrating conservatives and their viewpoints.

  In 2017, President Trump’s first year in the Oval Office brought academic rage to new heights as professors frequently blasted the Commander-in-Chief and berated his voters, traditional conservatives, and anyone who does not embrace progressivism.

  Here are five things that professors actually said in 2017:

  1) Prof suggests Texans deserve hurricane for supporting Trump

  A University of Tampa professor was so upset about the outcome of the 2016 presidential election that he publicly suggested that Texans deserved Hurricane Harvey because the state voted Republican last year.

  “I don’t believe in instant Karma but this kinda feels like it for Texas,” Professor Ken Storey tweeted in August. “Hopefully this will help them realize the GOP doesn’t care about them.”

  Shortly after the controversial remarks, the university announced that it had fired the professor.

  2) Prof says House GOP ‘should be lined up and shot’

  An Art Institute of Washington professor was so furious about the House GOP’s effort to repeal and replace Obamacare that he said GOP lawmakers “should be lined up and shot” for their actions.

  “They should be lined up and shot,” Professor John Griffin wrote on his Facebook page. “That’s not hyperbole; blood is on their hands.”

  3) Prof calls whites 'inhuman assholes,' says 'let them die'

  In June, Trinity College professor Johnny Eric Williams made national headlines after appearing to suggest that the first responders should have let the victims of the congressional shooting "fucking die” because they are white.

  “It is past time for the racially oppressed to do what people who believe themselves to be ‘white’ will not do, put end to the vectors of their destructive mythology of whiteness and their white supremacy system. #LetThemFuckingDie,” Williams wrote in a Facebook post, including the hashtag as an apparent reference to an op-ed with the same title that he had shared two days earlier.

  Following his controversial remarks, Williams was placed on leave but is slated to return to teaching in 2018.

  4) Prof says Otto Warmbier 'got exactly what he deserved'

  A University of Delaware professor claimed that Otto Warmbier, a young American who died after being held in a North Korean prison camp, “got exactly what he deserved.”

  Professor Katherine Dettwyler made her remarks on her personal Facebook page and in the comments section of an article published by National Review.

  Dettwyler maintained that Warmbier behaved like a “spoiled, naive, arrogant U.S. college student who never had to face the consequences of his actions” when he visited North Korea, and that he had a “typical mindset of a lot of the young, white, rich, clueless males” she teaches.

  5) Drexel prof blames 'whiteness' for Texas massacre

  George Ciccariello-Maher, an assistant professor at Drexel University who made headlines by calling for “white genocide” last year, was at it again in 2017.

  In early November, the academic pinned the blame for the Texas massacre that killed 26 people on what he called “whiteness” and “entitlement.”

  “Whiteness is never seen as a cause, in and of itself, of these kinds of massacres, of other forms of violence,” Ciccariello-Maher said in an interview with Democracy Now!, asserting that “whiteness is a structure of privilege and it’s a structure of power, and a structure that, when it feels threatened, you know, lashes out.”

  

  

• One-Third Of The 2016 Spike In U.S. Homicides Came From Just 5 Chicago Neighborhoods

  Authored by Thomas Lifson of American Thinker,

  The full evil of the anti-cop hysteria pushed by left wing groups like #BlackLivesMatter will take many years to be understood, in no small part because of political and media support for the notion that racism on the part of cops is the sole cause for disproportionate numbers of black perpetrators in our crime statistics.

  But every now and then, a statistic appears that cannot be easily dismissed. Jared Sichel of The Daily Signal brings one such figure to our attention.

  Murders in the U.S. rose nearly 9% last year, and one-third of that increase came from just a few neighborhoods in Chicago, according to a Wall Street Journal analysis of the FBI’s annual 2016 publication, Crime in the United States.

   

  While violent crime (homicide, rape, assault, and robbery) also rose nationwide from 2015 to 2016 — over 4% — the data show the increase was not uniform, but rather concentrated in cities like Chicago and Baltimore.

  

  (Chart per HeyJackAss!)

  Other big cities, including Los Angeles and Washington, DC, saw meaningful declines in violence. So there is no broad trend, but rather local factors that must be accounted for. For instance:

  Interestingly, the paper’s neighborhood-by-neighborhood analysis claimed that areas where homicides spiked had a “lighter street presence by police following officers’ high-profile killings of young black men.” (snip)

   

  In Baltimore, violent crime rates were going down until 2015, when police officers “pulled back from a more proactive approach” following widespread city riots after the death of Freddie Gray, a 25-year-old black man who suffered a severe spinal injury while being transported in a police van on April 1, 2015, and died one week later.

  But for the real statistical weight affecting overall crime stats, one has to look at Chicago, where the police have been under severe restrictions and where gang activity is out of control:

  In Chicago last year, homicides jumped to 771, 58% higher than in 2015, and more than the number of murders in Los Angeles and New York combined. Half of that increase, the analysis showed, came from just five neighborhoods, and is largely attributable to gang warfare. In a “roughly four-mile radius of West Garfield Park,” for example, there are at least 30 gangs. (snip)

   

  In Chicago, as in Baltimore, police became less proactive following protests against the fatal 2014 shooting of a black teenager, Laquan McDonald, by a white police officer, Jason Van Dyke, who has been charged with first-degree murder.

   

  A FiveThirtyEight analysis found that in Chicago and other cities with high-profile deaths of black men involving police officers, a “pullback in policing was accompanied by a sharp increase in gun violence.”

  All the anti-cop self-righteousness in the world won’t save one victim from gang violence. The BLM protestors, along the with hands up-don’t shoot crowd have been enablers of horrific violence that mostly is claiming black lives. Progressive politics often involves sacrificing the powerless for the purported greater good, even as the poseurs claim to be their righteous protectors.

  

  

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• Europe's Runaway Train Towards Full Digitization Of Money & Labor

  Authored by Peter Koenig via The Saker blog,

  The other day I was in a shopping mall looking for an ATM to get some cash. There was no ATM. A week ago, there was still a branch office of a local bank – no more, gone. A Starbucks will replace the space left empty by the bank. I asked around – there will be no more cash automats in this mall – and this pattern is repeated over and over throughout Switzerland and throughout western Europe. Cash machines gradually but ever so faster disappear, not only from shopping malls, also from street corners. Will Switzerland become the first country fully running on digital money?

  

  This new cashless money model is progressively but brutally introduced to the Swiss and Europeans at large – as they are not told what’s really happening behind the scene. If anything, the populace is being told that paying will become much easier. You just swipe your card – and bingo. No more signatures, no more looking for cash machines – your bank account is directly charged for whatever small or large amount you are spending. And naturally and gradually a ‘small fee’ will be introduced by the banks. And you are powerless, as a cash alternative will have been wiped out.

  The upwards limit of how much you may charge onto your bank account is mainly set by yourself, as long as it doesn’t exceed the banks tolerance. But the banks’ tolerance is generous. If you exceed your credit, the balance on your account quietly slides into the red and at the end of the month you pay a hefty interest; or interest on unpaid interest – and so on. And that even though interbank interest rates are at a historic low. The Swiss Central Bank’s interest to banks, for example, is even negative; one of the few central banks in the world with negative interest, others include Japan and Denmark.

  When I talked recently to the manager of a Geneva bank, he said, it’s getting much worse. ‘We are already closing all bank tellers, and so are most of the other banks’. Which means staff layoffs – which of course makes it only selectively to the news. Bank employees and managers must pass an exam with the Swiss banking commission, for which they have study hundreds of extra hours within a few months to pass a test – usually planned for weekends, so as not to infringe on the banks’ business hours. You got to chances to pass. If you fail you are out, joining the ranks of the unemployed. The trend is similar throughout Europe. The manager didn’t reveal the topic and reason behind the ‘retraining’ – but it became obvious from the ensuing conversation that it had to do with the ‘cashless overtake’ of people by the banks. These are my words, but he, an insider, was as concerned as I, if not more.

  

  Surveillance is everywhere. Now, not only our phone calls and e-mails are spied on, but our bank accounts are too. And what’s worse, with a cashless economy, our accounts are vulnerable to be invaded by the state, by thieves, by the police, by the tax authority, by any kind of authority – and, of course, by the very banks that have had your trust for all your life. Remember the ‘bail-ins’ first tested in early 2013 in Cyprus? – Bail-ins will become common practice for any bank that has abused its greed for profit and would go belly-up, if there wouldn’t be all those deposits from customers. Even shareholders are not safe. This has been quietly decided on some two years ago, both in the US and also by the non-elected white-collar mafia, the European Commission – EC.

  The point is, ‘banks über alles’. And which country would be better suited to introduce ‘cashless living’ than Switzerland, the epicenter – along with Wall Street – of international banking. Bank’s will call the shots in the future, on your personal economy and that of the state. They are globalized, following the same principles of deregulation worldwide. They are in collusion with globalized corporations. They will decide whether you eat or become enslaved. They are one of the tree major weapons of the 0.1 % to beat the 99.9% into submission. The other two at the service of the master hegemon’s Full Spectrum Dominance drive, are the war- and security industry and the ever more brazen propaganda lie-machine. Banking deregulation has become another little-propagated rule of the World Trade Organization (WTO). Countries who want to join WTO, must deregulate their banking sector, prying it open for the globalized money-sharks, the Zion-controlled banking conglomerates.

  Retrenchment of personnel in the banking employment market is increasing. The news only selectively reports on it, when there are large amounts of jobs being eliminated. Statistics lie everywhere, in the EU as well as in Washington. – Why scare people? They will be scared enough, when they are offered jobs at salaries on which they can barely survive. That’s happening already. It used to be a tactic applied for developing countries: Keep them enslaved by debt and low pay, so they don’t have time and energy to take to the streets to protest – they have to look for food and work, whatever menial jobs they can get, to feed their families. It’s now hitting Europe, the West in general. Some countries way more than Switzerland.

  Cashless trials are going on elsewhere, especially in Nordic countries, where selected department stores and supermarkets do no longer take cash. Another monstrous trial has been carried out in India a year ago, in the last quarter of 2016, where from one day to another 80% of the most popular money notes were eliminated, and could only be exchanged for new notes by banks and through bank accounts. And this in an almost pure cash country, where half the population has no bank account, and where remote rural areas have no banks. People were lied to so that the sudden introduction had maximum effect.

  It caused massive famine and thousands of people died, as they had suddenly no acceptable cash to buy food – all instigated by the USAID Project ‘Catalyst’, in connivance with the Indian rulers and central bank. It was a trial. It was a disaster. If it works in India with 1.3 billion people, two thirds of whom live in rural areas and most of them have no bank account, the scam could be applied in any developing country – see also India – Crime of the Century – Financial Genocide

  What is going on in Switzerland is a trial with the high end of populations. How is the upper crust taking to such radical changes in our daily monetary routine? – So far not many protests have been noticed. There is a weak referendum being launched by a group of people who want the Swiss Central Bank be the only institution that can make money, like in the ‘olden days’. Though a very respectable idea, the referendum has no chance in today’s banking and debt-finance environment, where youth is being indoctrinated with the idea that swiping your card in front of an electronic eye is cool. Today, most money is made by private banks, like elsewhere in Europe and the US. Worldwide banking deregulation, initiated by the Clinton Administration in the 1990s – today a rule for any member of the World Trade Organization (WTO) – has made this all possible.

  Digitalization and robotization is just beginning. Staffed check-out counters in supermarkets are dwindling; most of them are automatic – and that happened within the last year. – Where are the employees gone? – I asked an attendant who helped the customers through the self-checkout. ‘They joined the ranks of unemployed’, she said with a sad face, having lost several of her colleagues. ‘It will hit me too, as soon as they don’t need me anymore to show the customers on how to auto-pay.’

  Bitcoins

  Digitalization also includes the cryptocurrencies, the blockchain moneys floating around – of which the most famous one is Bitcoin. It brings digitalization of money to an apex. The system is complex and seems to lend itself only to ‘experts’. Cryptocurrencies are fiat money, based on nothing, not even on gold. Cryptos are electronic, invisible and highly, but highly speculative, an invitation for gangsters and fraudsters. With extreme speculative values, it looks as if cryptocurrencies were designed for crooks and speculators.

  Bitcoin was allegedly invented by Satoshi Nakamoto which could be a pseudonym of a man or a group of people, suspected to live in the US. “Nakamoto’s” identity is believed to be commonwealth origin, due to the vocabulary used in his writings. One of his close associates is purportedly a Swiss coder, who is also an active member of the cryptocurrency community. He is said to have graphed the time stamp of each of Nakamoto’s more than 500 bitcoin forum posts. Such ‘forum posts’ exist in the thousands, worldwide. They form an elaborate network based on algorithms.

  Bitcoin was formally created in January 2009 with a fix amount of 21 million ‘coins’, of which more than half are already in circulation, and 1 million, or about 4.75% (of the total) can be traced to Nakamoto – which according to the current market value corresponds to close to US$15 billion. Today’s overall Bitcoin market cap is more than US$ 315 billion. The market is highly volatile. Drastic daily fluctuations are common, especially within the last 12 months. If one of the major Bitcoin holders, like Nakamoto, would capitalize his profit by selling a big portion of his holdings, the Bitcoin price would be in free fall, functioning pretty similar to the regular stock exchange.

  On 24 August 2010, when Bitcoin was first traded, its value was US$ 0.06. On 24 December 2017, the coin was worth US$ 13,800, an increase of 230,000%. In the last twelve months, its value increased from about US$ 800 in December 2016 to a peak of close to US$ 20,000 in December 2017, an increase of nearly 2,500 %. However, in the last 7 days, the price has dropped by US$ 5,160, i.e. by more than 27%, and the trend seems to be downward; perhaps a sign of quick profit-taking? However, this shows how instable this cryptocurrency is, apparently much more so than trading corporate shares on the stock market.

  The number of cryptocurrencies available over the internet as of 27 November 2017 is above 1300 and growing. A new cryptocurrency can be created at any time and by anyone. By market capitalization, Bitcoin is presently the largest blockchain network (database network, storing data in different publicly verifiable places), followed by Ethereum, Bitcoin Cash, Ripple and Litecoin.

  Bitcoin may be the next bubble, bringing down a parallel economy which has already its fingers clawing into our regular western economy. Cryptocurrencies are officially forbidden in Russia and China, though stopping cryptocurrency dealings by individuals is hardly possible. They do not touch the traditional banking system. That’s why major banks hate them. They circumvent the banking suckers, prevent them from making ever higher profits from horrendous commissions, against which the people at large are powerless.

  Here is Bitcoin’s positive value. It escapes bank and state controls. If countries’ economies were run on Bitcoins or another cryptocurrency, they would escape US sanctions which function only because western currencies are foster-children of the US-dollar, hence, subject to the dollar hegemony; meaning all international transactions have to pass through a US bank. A typical case is ‘banking blockades’, when Washington decides to stop all international transactions of a country until it submits to the wishes of the empire. It is blackmail; totally illegal, but unless there is a monetary alternative, the (western) world is subject to this system.

  A typical case was Argentina, when she was forced by a New York judge in June 2014 to pay a New York based Vulture Fund US$1.6 billion, an illegal ruling according to a UN resolution. Argentina refuse to pay, so the judge, interfering in a sovereign nation, blocked more than US$ 500 million in Argentina’s debt payment to creditors, bringing Argentina to the brink of a second bankruptcy in 13 years. Eventually, neoliberal Macri negotiated a deal with the Vultures of a payment in excess of US$ 400 million.

  This US blackmail would not have been possible had Argentina been able to make its foreign transactions in Bitcoins or another cryptocurrency. Venezuela is currently using a national cryptocurrency for some of its foreign transactions, thereby escaping the sanctions stranglehold of Washington. Had Greek and Cyprus citizens had a cryptocurrency alternative to the euro, they would not have been subject to the cash control imposed by the European Central Bank.

  On the other hand, funding of terror organizations, like ISIS, cannot be disrupted, if the terror group deals in cryptocurrencies. – This shows, for good or for bad, Bitcoins, or cryptocurrencies are for now unique in resisiting censure and blackmail, or any kind of authoritarian outside interference in electronic money transactions.

  Cashless Living

  If Switzerland accepts the change to digital money, a country where until relatively recently most people went to pay their monthly bills in cash to the nearest post office – then we, in the western world, are on a fast track to total enslavement by the financial institutions. It goes, of course, hand-in-hand with the rest of systematic and ever faster advancing oppression and robotization of the 99.9% by the 0.1%.

  We are currently at cross-roads, where we still can either decide to follow the discourse of a new electronic monetary era, with ever less to say about the product of our work, our money; or whether, We the People, will resist a banking / finance system that has full control over our financial resources, and which can literally starve us into submission or death, if we don’t behave. In order to resist we need an alternative monetary system or monetary network, away from the dollar-euro hegemony.

  All the more important is the ascent of another economy, another payment and transfer scheme which already exists in the East, the Chinese International Paymen, totally System (CIPS), effectively a replacement of SWIFT, totally privately run and linked to the US-dollar and US banks. The world needs a multipolar economy, based on the real output of a country or society, as is the case in China and Russia, not one based on fiat money as is the current western economy.

  Will Switzerland, the stronghold of world finance, along with New York, London and Hongkong, resist the temptation of increased profit, power and control, offered by digital money? – We, the People, have still the chance to decide either for continuing rotting in a fraud economy, based on wars and greed – for which digital money, exacerbated by cryptocurrencies, is a new tool for a new maximizing profit bonanza on the back of the common people; or do we opt for an honest future and for a life that leaves us free to take sovereign political and monetary decisions in a full cash society. For the latter we must wake up to see the propaganda fraud going on before our eyes, and to resist the robot and electronic money onslaught being unleashed on us.

  

  

• A Lambo For Under 10 Bitcoin: You Can Now Buy Supercars For Cryptos

  Listening to the CNBC today one would be left with the impression that once having purchased bitcoin, there is nothing one can do with it (except check its price 30 times per minute of course). Which, of course, is dead wrong: one can buy pretty much anything that Overstock (among increasingly more online retailers) has to offer, one can purchase a home not only in the US but also the UK, and as of a week ago, one could pay an Albany car dealer the digital currency and drive off with any vehicle off the lot.

  And now, rushing to capitalize on the countless brand new crypto millionaires minted in the past year, is Moonlambos, an online dealership for supercars with offices in Santa Monica and London which dubs itself “the premier destination for exotic supercars that deals exclusively in cryptocurrency.”

  The innovative dealership catering exclusively to bitcoin buyers, sells Aston Martins, Ferraris, Lamborghinis, Mclarens, Porsches and other coupes and convertibles, with a price rangins from 5 bitcoins for a Mercedes 230 SL Pagoda, to a 9 bitcoin Lamborghini Gallardo. to 20 bitcoin for a Ferrari 488, all the way to a 44 bitcoin Lamborghini Aventador LP 750-4 Superveloce.

  What some may find most fascinating, however, is the constantly changing price in bitcoin for any one car – a result of the most volatile underlying asset currently in circulation (with the possible exception of electricity).

  

  However, the real news here is not that there is now an exclusive online outlet aimed at bitcoin millionaires: it is that – as we have mused previously – there are so few of them when one considers that the population of crypto nouveau (ultra) riche has exploded in recent months, and is so very eager to spend its newfound wealth. It is almost as if, due to ideological barriers or other irrational considerations, retailers – who are all hurting in Amazon’s shadow – think they are too good to accept a new currency which millions would be delighted to spend, and would rather file for bankruptcy than accept the likes of bitcoin, ether and ripple.

  Oh, and for those who say that cryptos are too volatile for any merchant to accept, here is a word you can ask Alexa to look up: “hedging.”

  

  

• From Snowden To Russia-Gate – The CIA And The Media

  Via Moon Of Alabama blog,

  The promotion of the alleged Russian election hacking in certain media may have grown from the successful attempts of U.S. intelligence services to limit the publication of the NSA files obtained by Edward Snowden.

  In May 2013 Edward Snowden fled to Hong Kong and handed internal documents from the National Security Agency (NSA) to four journalists, Glenn Greenwald, Laura Poitras, and Ewen MacAskill of the Guardian and separately to Barton Gellman who worked for the Washington Post. Some of those documents were published by Glenn Greenwald in the Guardian, others by Barton Gellman in the Washington Post. Several other international news site published additional material though the mass of NSA papers that Snowden allegedly acquired never saw public daylight.

  In July 2013 the Guardian was forced by the British government to destroy its copy of the Snowden archive.

  In August 2013 Jeff Bezos bought the Washington Post for some $250 million. In 2012 Bezos, the founder, largest share holder and CEO of Amazon, had already a cooperation with the CIA. Together they invested in a Canadian quantum computing company. In March 2013 Amazon signed a $600 million deal to provide computing services for the CIA.

  In October 2013 Pierre Omidyar, the owner of Ebay, founded First Look Media and hired Glenn Greenwald and Laura Poitras. The total planned investment was said to be $250 million. It took up to February 2014 until the new organization launched its first site, the Intercept. Only a few NSA stories appeared on it. The Intercept is a rather mediocre site. Its management is said to be chaotic. It publishes few stories of interests and one might ask if it ever was meant to be a serious outlet. Omidyar has worked, together with the U.S. government, to force regime change onto Ukraine. He had strong ties with the Obama administration.

  Snowden had copies of some 20,000 to 58,000 NSA files. Only 1,182 have been published. Bezos and Omidyar obviously helped the NSA to keep more than 95% of the Snowden archive away from the public. The Snowden papers were practically privatized into trusted hands of Silicon Valley billionaires with ties to the various secret services and the Obama administration.

  The motivation for the Bezos and Omidyar to do this is not clear. Bezos is estimated to own a shameful $90 billion. The Washington Post buy is chump-change for him. Omidyar has a net worth of some $9.3 billion. But the use of billionaires to mask what are in fact intelligence operations is not new. The Ford Foundation has for decades been a CIA front, George Soros' Open Society foundation is one of the premier "regime change" operations, well versed in instigating "color revolutions".

  It would have been reasonable if the cooperation between those billionaires and the intelligence agencies had stopped after the NSA leaks were secured. But it seems that strong cooperation of the Bezos and Omidyar outlets with the CIA and others continue.

  The Intercept burned a intelligence leaker, Reality Winner, who had trusted its journalists to keep her protected. It smeared the President of Syria as neo-nazi based on an (intentional?) mistranslation of one of his speeches. It additionally hired a Syrian supporter of the CIA's "regime change by Jihadis" in Syria. Despite its pretense of "fearless, adversarial journalism" it hardly deviates from U.S. policies.

  The Washington Post, which has a much bigger reach, is the prime outlet for "Russia-gate", the false claims by parts of the U.S. intelligence community and the Clinton campaign, that Russia attempted to influence U.S. elections or even "colluded" with Trump.

  Just today it provides two stories and one op-ed that lack any factual evidence for the anti-Russian claims made in them.

  In Kremlin trolls burned across the Internet as Washington debated options the writers insinuate that some anonymous writer who published a few pieces on Counterpunch and elsewhere was part of a Russian operation. They provide zero evidence to back that claim up. Whatever that writer wrote (see list at end) was run of the mill stuff that had little to do with the U.S. election. The piece then dives into various cyber-operations against Russia that the Obama and Trump administration have discussed.

  A second story in the paper today is based on "a classified GRU report obtained by The Washington Post." It claims that the Russian military intelligence service GRU started a social media operation one day after the Ukrainian President Viktor Yanukovych was illegally removed from his office in a U.S. regime change operation. What the story lists as alleged GRU puppet postings reads like normal internet talk of people opposed to the fascist regime change in Kiev. The Washington Post leaves completely unexplained who handed it an alleged GRU report from 2014, who classified it and how, if at all, it verified its veracity. To me the piece and the assertions therein have a strong odor of bovine excrement.

  An op-ed in the very same Washington Post has a similar smell. It is written by the intelligence flunkies Michael Morell and Mike Rogers. Morell had hoped to become CIA boss under a President Hillary Clinton. The op-ed (which includes a serious misunderstanding of "deterrence") asserts that Russia never stopped its cyberattacks on the United States:

  Russia’s information operations tactics since the election are more numerous than can be listed here. But to get a sense of the breadth of Russian activity, consider the messaging spread by Kremlin-oriented accounts on Twitter, which cybersecurity and disinformation experts have tracked as part of the German Marshall Fund’s Alliance for Securing Democracy.

  The author link to this page which claims to list Twitter hashtags that are currently used by Russian influence agents. Apparently the top issue Russia's influence agents currently promote is "#merrychristmas".

  

  When the authors claim Russian operations are "more numerous than can be listed here" they practically admit that they have not even one  plausible operation they could cite. Its simply obfuscation to justify their call for more political and military measures against Russia. This again to distract from the real reasons Clinton lost the election and to introduce a new Cold War for the benefit of weapon producers and U.S. influence in Europe.

  None of the Russia-gate stories so far has held up to scrutiny. There is no proof at all, nor reasonable evidence, that Russia interfered in elections in the U.S. or elsewhere. There is no evidence of "collusion" with the Trump campaign.

  One of the most complete debunking of the false claims can be found in the recent London Review of Books: What We Don’t Talk about When We Talk about Russian Hacking. Consortium News has published many pieces on the issue as well as analyses and warnings of what may follow from it. Many other writers have caught up and debunk the various false claims. The Nation lists various cases of journalistic malpractice with regard to Russia-gate.

  The people who promote the "Russian influence" nonsense are political operatives or hacks. Take for example Luke Harding of the Guardian who just published a book titled Collusion: Secret Meetings, Dirty Money, and How Russia Helped Donald Trump Win. He was taken apart in a Real News interview (vid) about the book. The interviewer pointed out that there is absolutely no evidence in the book to support its claims. When asked for any proof for his assertion Harding defensively says that he is just "storytelling" – in other words: its fiction. Harding earlier wrote a book about Edward Snowden which was a similar sham. Julian Assange called it "a hack job in the purest sense of the term". Harding is also known as plagiarizer. When he worked in Moscow he copied stories and passages from the now defunct Exile, run by Matt Taibbi and Mark Ames. The Guardian had to publish an apology.

  The Mexican government controls the media by buying an immense amount of advertisement. It thus guarantees income as long as its political line is followed. The U.S. government has its own ways of controlling the media. In the 1950s to 1970s the CIA ran Operation Mockingbird which gave it control over much of the news and opinion output in U.S. media. During that time up to 400 main stream journalists were working for the CIA.

  The method of control has likely changed. The handling of the Snowden affair lets one assume that the CIA induces billionaires to buy up media and to implement the CIA's favored policies through them. We do not know what the billionaires get for their service. The CIA surely has many ways to let them gain information on their competition or to influence business regulations in foreign countries. One hand will wash the other.

  James Clapper as Director of National Intelligence, John Brennan as CIA head and James Comey from the FBI "assessed" that Russia influenced the U.S. presidential election. Annex B of their report, which hardly any report bothered to mention, read:

  Judgments are not intended to imply that we have proof that shows something to be a fact. Assessments are based on collected information, which is often incomplete or fragmentary, as well as logic, argumentation and precedents.

  That sentence is the core of Russia-gate. There are lots of claims, assertions and judgments but no proof at all that any of the alleged Russian influence really happened.

  It is probably due to the undue influence of the intelligence services that media have adopted that Annex B standard for themselves. With regards to Russia (and other issues), assertions are now enough – there is no need to investigate, to find the truth or to verify claims.

  *  *  *

  How will that system work if an accident happens, some jet gets shot down and the issue escalates. Will there be any reporter left in the main stream media who is allowed to ask real questions?

  

  

• Visualizing The Future Of Shipping: Green & Autonomous

  Space travel may be exciting, and self-driving cars certainly get a lot of hype.

  However, as Visual Capitalist's Jeff Desjardins points out, there remains a good argument that the world’s oceans – and the ships that roam them – often get overlooked when it comes to advances in transportation technology.

  How will shipping change in the coming years, and what trends can we look to for guidance on the future of shipping?

  THE FUTURE OF SHIPPING

  Today’s infographic comes to us from Futurism, and it gives examples of ships already in production – or in the concept phase – that aim to make activity on the world’s oceans greener and more autonomous.

  

  Courtesy of: Visual Capitalist

  How does the future of shipping shape up?

  There are two main trends that emerge from these upcoming ships: an increased use of alternative energy and higher levels of automation.

  GREENER SHIPS

  Fuel accounts for about half of the operating costs of the shipping industry – so the type of fuel used to move ships between ports is paramount. Since the 1960s, heavy fuel oil (HFO) has been the dominant choice for the industry. It’s cheap and plentiful, but it’s also extremely dirty.

  Shipping today only produces 3% of carbon dioxide emissions – but it’s areas like sulphur (15% of global total) and particulate emissions (11% of total) that are considered a bigger problem.

  As a result, the industry is not only moving to use cleaner oil-based fuels – but some companies are aiming to use alternative energy as well. In the ships above, you’ll see the addition of LNG and fuel cells, as well as the use of solar and wind to help power the future of shipping.

  MORE AUTONOMOUS SHIPS

  Ships won’t only be powered differently – they will be navigated and steered using artificial intelligence along with the aid of commercial drones.

  Rolls-Royce is building an autonomous smart ship right now with Google that will monitor its surroundings in intense detail, while making autonomous decisions on the deep seas.

  Autonomous shipping is the future of the maritime industry. As disruptive as the smartphone, the smart ship will revolutionize the landscape of ship design and operations”

   

  – Mikael Mäkinen, President, Rolls-Royce Marine

  Implementing this technology on the high seas has a longer development cycle than that for autonomous vehicles, but that doesn’t mean the idea is dead in the water.

  It just means we’ll have to wait a little longer to see the future of shipping in action – and for now, the prospect of viewing all of the world’s ships in real-time will just have to suffice.

  

  

• "Wealth Effect" = Widening Wealth Inequality

  Authored by Charles Hugh Smith via OfTwoMinds blog,

  Note that widening wealth and income inequality is a non-partisan trend.

  One of the core goals of the Federal Reserve's monetary policies of the past 9 years is to generate the "wealth effect": by pushing the valuations of stocks and bonds higher, American households will feel wealthier, and hence be more willing to borrow and spend, even if they didn't actually reap any gains by selling stocks and bonds that gained value.

  In other words, the mere perception of rising wealth is supposed to trigger a wave of renewed borrowing and spending.

  This perception management only worked on the few households which owned enough of these assets to feel wealthier–the top 5%, the top 6 million out of 120 million households. This chart shows what happened as the Fed ceaselessly goosed financial assets higher over the past 9 years: the gains, real and perceived, only flowed to the top 5% of households earning in excess of $200,000 annually.

  Spending by the bottom 95% has at best returned to the levels reached a decade ago in 2007.

  

  By focusing on boosting financial assets to the moon as a means of goosing spending, the Federal Reserve has widened wealth and income inequality to the breaking point. Perception management doesn't actually boost the inflation-adjusted wages of the bottom 95%, which have stagnated for decades. Nor does boosting assets do much good for the vast majority of households which have modest holdings of stocks and bonds, usually in IRA or 401K retirement accounts they can't touch without paying steep penalties.

  As the charts below illustrate, the Grand Canyon between the top 5% and everyone else is widening. Let's say a househould has $12,000 in retirement funds and $5,000 in a savings account. (Many households have less than $1,000 in savings, so this example-household is doing pretty well to have $17,000 in cash and financial assets.)

  Thanks to the Federal Reserve's Zero Interest Rate Policy (ZIRP), savers have lost ground after adjustments for inflation. The stock market has more than doubled, and most bond funds have appreciated, but precious metals and other commodities have not performed as well. So let's say the household's retirement portfolio rose by a hefty 75%, or $9,000, to a total of $21,000.

  Does this modest gain actually change the financial foundation of the household to the point that the household can now afford to buy a new vehicle, college tuition, etc.? The short answer is no; the gains are simply too modest as a percentage of income to make any difference.

  Compare this to a top 5% household with hundreds of thousands of dollars of financial assets: gains registered in the hundreds of thousands do indeed move the needle on household wealth and perception management. The top 5% haven't just reaped outsized gains in Fed-goosed assets; they've also reaped the vast majority of any wage gains generated in the past 9 years of "recovery."

  As this chart shows, the bottom 90% lost ground, and the really substantial gains have accrued only to the top 1%.

  

  Note that widening wealth and income inequality is a non-partisan trend. The political and financial elites have feathered their own nests while the bottom 95% have lost ground.

  

  The Federal Reserve's perverse policy of perception management has exacerbated wealth and income inequality: "wealth effect" = widening wealth inequality.

  *  *  *

  I'm offering my new book Money and Work Unchained at a 10% discount ($8.95 for the Kindle ebook and $18 for the print edition) through December, after which the price goes up to retail ($9.95 and $20). 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.

  

  

• Crazy Eyes is BACK!

  From the Slope of Hope: I saw a headline on December 24 which put a damper on my Christmas Eve:

  

  Ummm – – so why on earth would this bug me? I don’t have a dog in this fight. If Theranos goes bankrupt, it doesn’t hurt or help me one bit. If they become the most valuable company in the world (ha!), the situation is the same. Utterly neutral and meaningless. So why should I care?

  I’ve been pondering my reaction. Theranos is no stranger to the Slope of Hope, as I’ve written about this train wreck at length on eight separate occasions. For most of 2017, I wondered what had happened to them, because the media went completely silent on them. Ms. Holmes’ own Twitter account hasn’t issued a tweet for over two years (!), and every time I drive by the gorgeous Theranos headquarters here in Palo Alto, I see a completely empty parking lot. So I figured she basically got away with raising $900 million and having a ruined company without any consequence. But it seems I was wrong.

  

  With the $100,000,000 that Fortress Investment is inexplicably throwing at Theranos, the company has now raised a billion bucks. I figure Holmes must have some SERIOUS dirt on somebody, because nothing about this makes any sense at all. Yes, yes, I realize her board of directors used to have every deep state slimeball imaginable, so maybe that helps, but let’s face it, the Theranos name is mud. I would wager its brand has NEGATIVE value. If you were starting a brand new medical device company, and you could give it the Theranos name for, say, ten dollars, would you do it? Yeah, I didn’t think so.

  So, again, why should I care? Well, I think part of it is this:

  

  Holmes’ whole schtick was how she was the reincarnation of Steve Jobs. From the bizarre diet to the black turtlenecks to the secrecy (“Hey! Our stuff doesn’t work at all! Shhhhhh! Don’t say anything!”), she held herself out as a younger Steve Jobs who wore a B-cup. For a while, the media gobbled it up, and they actually put her on the front cover of national magazines, repeating the claim that she was worth $4.5 billion. She – – how shall I put this? – – wasn’t.

  

  Here we see Ms. Holmes describing the $100 million as a great investment on a conference call, whose listeners couldn’t detect the air quotes.

  I remain floored anyone would put another dime into this place. As the recent Wall Street Journal article mentioned, “An investigation by the Journal in October 2015 sparked a wave of scrutiny about Theranos’ practices, at a time when the company had a valuation of around $10 billion. Holmes has continued to lead Theranos through settling multiple lawsuits. However, investigations opened by both the Justice Department and the Securities and Exchange Commission are ongoing.” So they are tits-deep in lawsuits and angry shareholders, both Holmes and Theranos have been banned from running labs, and their name has become synonymous with smoke and mirrors. What’s going on here? Just because you throw on a white lab coat doesn’t make you a genius scientist.

  

  Joking aside, I think for me what bugs the holy hell out of me is simply the disappointment. The past eight years have shown us an environment in which fraud, government bailouts, and crooked executives go unpunished, if not celebrated. Once in a blue moon, there’s a piece of shit company which is finally exposed for what it is (other examples – – Color.com and Clinkle.com) and blow up in front of our eyes. We saw that with Theranos, and even though their success or failure doesn’t affect my life one iota, it gave me some minuscule degree of satisfaction that there was still a little bit of judgment, discernment, and fairness to the world.

  So when Theranos had an H-bomb dropped on them, and Holmes disappeared from the press, and their parking lot went empty, and their office space went up for least, I thought to myself: there’s still a little bit of sense left out there. But I was wrong. There isn’t. And if you’re a mildly-attractive slender blonde with some razzle-dazzle and the right connections, you can get away with just about anything.

  

  

• 1,000s Of "Micro-Homes" Sprout Up All Over Bay Area To House The Growing Homeless Population

  Roughly one year ago we shared the plans of a billionaire real estate developer in San Francisco who wanted to build communities for the homeless in Bay Area neighborhoods using stackable steel shipping containers (see: San Fran Billionaire Luanches Plan To House Homeless In Shipping Containers).  Not surprisingly, the efforts were met with some resistance from the liberal elites of Santa Clara who, despite their vocal support of any number of federal subsidy programs for low-income families, would prefer that those low-income families, and their subsidies, stay far away from their posh, suburban, “safe places.”

  Alas, as the San Francisco Chronicle points out today, like it or not, the boom in “micro-houses” is just getting started in the Bay Area with nearly 1,000 tiny homes, with less than 200 square feet of living space, currently being planned in San Francisco, San Jose, Richmond, Berkeley, Oakland and Santa Rosa.

  Planners say that’s just the beginning. “We’re very excited about micro-homes,” said Lavonna Martin, director of Contra Costa County’s homeless programs. “They could be a big help. They have a lot of promise, and our county is happy to be on the cutting edge of this one. We’re ready.”

   

  Contra Costa has a $750,000 federal homelessness grant to pay for 50 stackable micro-units of supportive housing, and Richmond Mayor Tom Butt would like to see them in his city. Developer Patrick Kennedy brought a prototype of his MicroPad unit to Richmond in November, and county and city leaders say they are leaning toward choosing it.

   

  “They’re very fine, and they make a nice-looking building,” Butt said. “They’d be good for anybody looking for housing.”

  

  The beauty of the tiny units is that they can be built in a fraction of the time it takes to construct typical affordable housing, and at a sliver of the cost, which means a lot of homeless folks can be housed quickly.

  The homes have also caught on in San Jose where the City Council just approved $2.4 million to build a village of 40 units to help house the homeless.  Of course, just like in Santa Clara, San Jose residents are lashing out at city officials over plans that they say will only serve to increase neighborhood crime.

  San Jose resident Sue Halloway told the council she was afraid putting the village near residences would increase “neighborhood crime, neighborhood blight (and) poor sanitation,” and predicted that it would be “a magnet for more homeless.”

   

  City Councilman Raul Peralez said he understands such concerns, but that “there are no facts surrounding these tiny homes and whatever blight or crime they might bring, because we haven’t done them yet.”

   

  “I tell people you really have two options,” said Peralez, who said he wants the village in his downtown district. “You can allow the homeless to live on the streets, or you can provide not only shelter but services in a confined area — with security. In my mind, that’s a way better option for managing this community in an organized way.”

  So, what do the stackable units look like?  As seen in the video below, prototypes from one manufacturer, MicroPad, come complete with full bathrooms and kitchens and have up to 160-180 square feet of living space…

  “These micro-homes may seem small at 160 to 180 square feet, but they’re actually pretty spacious when you’re in them,” she said. “And they go up very fast.”

   

  Kennedy’s MicroPads have showers, beds and kitchens. Individually they resemble shipping containers, but once they’re bolted together with siding and utilities, they look like a regular building.

  …which is more or less considered a mansion by struggling New York artist standards…

  

  

• The Biggest Factors In Future Oil Production

  Authored by Ron Patterson via OilPrice.com,

  This assessment is based on the data in the 2017 BP Statistical Review of World Energy available here. As such it uses that review’s definition of oil which is crude and condensate and natural gas liquids, uncompensated for their different energy contents or values of refined product components.

  Figure 1: World Oil Production 1990 – 2017

  

  (Click to enlarge)

  This analysis was prompted by a chart by Ovi showing that Non-OPEC production less Russia, Canada and the United States has been in decline since 2004. That decline rate is 0.25 million barrels/day/annum. It had previously risen strongly from 1990.

  Figure 2: Production Rate Change 2007 – 2016

  

  (Click to enlarge)

  The United States LTO patch is widely credited with having caused the oil price collapse of 2014. American production had risen by six million barrels per day since 2007. The United States was not alone with four other countries totaling six million barrels per day of production increase. Iraq and Saudi Arabia contributed two million barrels per day each with Russia and Canada contributing one million barrels per day each.

  Figure 3: World Oil Consumption 1990 – 2016

  

  (Click to enlarge)

  OECD consumption has been flat even as OECD countries have had an increase in GDP.

  Figure 4: Where the Oil Went

  

  (Click to enlarge)

  The fall of non-OECD consumption from 1990 to 1996 was due to the dissolution of the Soviet Union. Since then consumption growth has been steady at about 835,000 barrels/day/annum. Chinese consumption growth was 240,000 barrels/day/annum up to 2002 and then steepened to 512,000 barrels/day/annum since. OECD consumption growth was strong up to 2007 and then demand contracted due to higher oil prices. From here it looks like OECD consumption has plateaued. China may have also plateaued. Non-OECD consumption is likely to continue rising with a large part of that being due to India.

  Figure 5: World Oil Production from 1990 with a Projection to 2025

  

  (Click to enlarge)

  This projection is based on U.S. conventional production resuming long term decline and U.S. LTO production continuing to climb, driven by the Permian Basin. Russian production is in a long plateau. Canadian production continues its slow, capital-intensive climb. Other non-OPEC production continues its established decline of 0.25 million barrels/day/year. Iraqi production rises by 2.0 million barrels/day to 2025. It could be higher than that. Other OPEC production had risen by 3.0 million barrels/day from 2000 to 2005, in response to the lifting of production restrictions, and has been in a plateau since. The projection assumes a decline of 0.3 million barrels/day/year.

  The projection shows a gap of about eight million barrels per day by 2025 relative to the established growth rate indicated by the dashed line. This could largely be filled if Permian Basin production ramps up faster than projected and Iraqi production growth ramps up faster than projected now that their civil war is over.

  In summary, the market is likely to remain in balance and sustained price excursions are unlikely.

  

  

• Where European Populism Will Be Strongest In 2018

  While the establishment may breathe a sigh of relief looking back at political developments and events in Europe – which was spared some of the supposedly “worst-case scenarios” including a Marine le Pen presidency, a Merkel loss and a Geert Wilders victory – in 2017, any victory laps will have to be indefinitely postponed because as Goldman writes in its “Top of Mind” peek at 2018, Europe’s nationalist and populist tide was just resting, and as Pascal Lamy, the former Chief of Staff to the President of the European Commission admitted earlier this year, “Euroskeptic politicians are largely following the pulse of domestic sentiment. The fact is that the public is less enthusiastic about Europe than it once was.“

  Echoing the sentiment by the europhile, Goldman’s Allison Nathan writes that while the Euro area’s most immediate political risks—i.e., populist or euroskeptic parties winning key elections this year— did not materialize, these movements have continued to gain traction.

  • In the Dutch elections in March, the far-right Party for Freedom performed worse than polls had once predicted, but still increased its share of the vote relative to the 2012 elections. It remains the second-largest party in parliament.
  • In France, concerns about the prospect of Marine Le Pen winning the presidency gave way to optimism over Emmanuel Macron’s reform agenda; nonetheless, Le Pen posted the best-ever showing for her party in a presidential race.
  • In Germany, Chancellor Angela Merkel’s CDU-CSU retained the largest number of seats in the Bundestag, but the far-right Alternative für Deutschland (AfD) entered it for the first time with 13% of the vote.
  • And elsewhere in Europe, populist parties on various parts of the political spectrum performed well enough to participate in government coalitions; indeed, an anti-establishment candidate in the Czech Republic recently became prime minister

  Some other observations and lessons from recent European events in the twilight days of 2017:

  • The transition from campaigning to governing has proved difficult. Europe’s increasingly fragmented political landscape has made coalition-building challenging. In the Netherlands, it took over 200 days to form a government with only a single-seat majority. Similarly, German coalition talks with the Green party and the Liberal (FDP) party collapsed in November. But, after having planned to move into the opposition, the SPD—Merkel’s former coalition partner—decided at its congress last week to open talks with the CDU-CSU. Talks were set to begin this week.
  • Other sources of uncertainty remain unresolved. Spain continues to grapple with the standoff between Madrid and Catalonia; regional elections in Catalonia on December 21 will influence the trajectory of the situation. Meanwhile, the UK and EU-27 seem likely to agree to move past the first phase of the Brexit talks (covering separation issues). But in a setback for UK Prime Minister Theresa May, UK lawmakers recently voted for an amendment to the Brexit bill that will guarantee Parliament a vote on the final deal agreed with the EU.
  • The decline in political risk bolstered European assets, though fundamentals likely played a decisive role. The market-friendly outcome of the French elections dovetailed with a pick-up in European growth, supporting European equity markets. US inflows into European equities rose significantly but have since stabilized with the acceleration in growth and the decline in the risk premium likely behind us. Receding political risks also contributed to a stronger euro, which is up 12.5% against the dollar this year. Given the currency move, the SXXP is up roughly 7.5% in local terms and 20.6% in USD terms year-to-date.

  Next, here’s what Goldman expects and will look for in 2018 and beyond:

  • A continuation of the populist pull. The socioeconomic and cultural factors driving public opinion are unlikely to dissipate. Indeed, they may come into greater focus if growth moderates on a sequential basis starting in mid-2018.
  • Constraints to further fiscal integration. Opposition to fiscal transfers within the Euro area makes incremental revisions to existing EU programs more likely than transformational change. Key to watch will be Macron’s credibility as a champion of integration, which will hinge on his ability to push through reforms in the face of political and economic constraints.
  • Risks around Italian elections set to take place in March. Polls show the largest populist party, the 5 Star Movement (M5S), leading with roughly 27% of the vote. However, the new electoral law and M5S’s unwillingness to join a coalition suggest a centrist coalition is most likely. Such a government, while pro-EU/euro, would likely struggle to implement reforms.
  • An eventual resolution of political issues in Germany and Spain. We believe Germany’s major parties will work to avoid new elections, given limited public appetite for a new vote and the risk of AfD gaining more seats in parliament. In Spain, economic and policy uncertainty could persist, but in our view, it is not likely to have lasting or systemic implications. Eventually, we expect a compromise that grants Catalonia greater autonomy within Spain.
  • A bumpy road to Brexit. Expect the UK and EU to eventually agree to a two-year “status quo” transition plan.

  And finally, here is a map showing where the forces of populism are expected to remain strong – and grow – across the continent.

  

  

  

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• Paul Craig Roberts' Christmas Column 2017: The Greatest Gift Of All

  Authored by Paul Craig Roberts,

  Dear Donors, thank you for your support in 2017. Although you have kept me working yet another year, I find it encouraging that there are some Americans who can think independently and who want to know. As Margaret Mead said, it only takes a few determined people to change the world. Perhaps some of you will be those people.

   

  My traditional Christmas column goes back to sometime in the 1990s when I was a newspaper columnist. It has been widely reprinted at home and abroad. Every year two or three readers write to educate me that religion is the source of wars and persecutions. These readers confuse religion with mankind’s abuse of institutions, religious or otherwise. The United States has democratic institutions and legal institutions to protect civil liberties. Nevertheless, we now have a police state. Shall I argue that democracy and civil liberty are the causes of police states?

  Some readers also are confused about hypocrisy. There is a vast difference between proclaiming moral principles that one might fail to live up to and proclaiming immoral principles that are all too easy to keep.

   

  Liberty is a human achievement. We have it, or had it, because those who believed in it fought to achieve it. As I explain in my Christmas column, people were able to fight for liberty because Christianity empowered the individual.

   

  The other cornerstone of our culture is the Constitution. Indeed, the United States is the Constitution. Without the Constitution, the United States is a different country, and Americans a different people. This is why assaults on the Constitution by the regimes in Washington are assaults on America that are far worse than any assaults by terrorists. There is not much that we can do about these assaults, but we should not through ignorance enable the assaults or believe the government’s claim that safety requires the curtailment of civil liberty.

   

  In a spirit of goodwill, I wish you all a Merry Christmas and a successful New Year.

   

  Paul Craig Roberts

  The Greatest Gift For All

  Christmas is a time of traditions. If you have found time in the rush before Christmas to decorate a tree, you are sharing in a relatively new tradition. Although the Christmas tree has ancient roots, at the beginning of the 20th century only 1 in 5 American families put up a tree. It was 1920 before the Christmas tree became the hallmark of the season. Calvin Coolidge was the first President to light a national Christmas tree on the White House lawn.

  Gifts are another shared custom. This tradition comes from the wise men or three kings who brought gifts to baby Jesus. When I was a kid, gifts were more modest than they are now, but even then people were complaining about the commercialization of Christmas. We have grown accustomed to the commercialization. Christmas sales are the backbone of many businesses. Gift giving causes us to remember others and to take time from our harried lives to give them thought.

  The decorations and gifts of Christmas are one of our connections to a Christian culture that has held Western civilization together for 2,000 years.

  In our culture the individual counts. This permits an individual person to put his or her foot down, to take a stand on principle, to become a reformer and to take on injustice.

  This empowerment of the individual is unique to Western civilization. It has made the individual a citizen equal in rights to all other citizens, protected from tyrannical government by the rule of law and free speech. These achievements are the products of centuries of struggle, but they all flow from the teaching that God so values the individual’s soul that he sent his son to die so we might live. By so elevating the individual, Christianity gave him a voice.

  Formerly only those with power had a voice. But in Western civilization people with integrity have a voice. So do people with a sense of justice, of honor, of duty, of fair play. Reformers can reform, investors can invest, and entrepreneurs can create commercial enterprises, new products and new occupations.

  The result was a land of opportunity. The United States attracted immigrants who shared our values and reflected them in their own lives. Our culture was absorbed by a diverse people who became one.

  In recent decades we have lost sight of the historic achievement that empowered the individual. The religious, legal and political roots of this great achievement are no longer reverently taught in high schools, colleges and universities or respected by our government. The voices that reach us through the millennia and connect us to our culture are being silenced by “Identity Politics,” “political correctness” and “the war on terror.” Prayer has been driven from schools and Christian religious symbols from public life. Constitutional protections have been diminished by hegemonic political ambitions. Indefinite detention, torture, and murder are now acknowledged practices of the United States government. The historic achievement of due process has been rolled back. Tyranny has re-emerged.

  Diversity at home and hegemony abroad are consuming values and are dismantling the culture and the rule of law. There is plenty of room for cultural diversity in the world, but not within a single country. A Tower of Babel has no culture. A person cannot be a Christian one day, a pagan the next and a Muslim the day after. A hodgepodge of cultural and religious values provides no basis for law – except the raw power of the pre-Christian past.

  All Americans have a huge stake in Christianity. Whether or not we are individually believers in Christ, we are beneficiaries of the moral doctrine that has curbed power and protected the weak.

  Power is the horse ridden by evil. In the 20th century the horse was ridden hard, and the 21st century shows an increase in pace. Millions of people were exterminated in the 20th century by National Socialists in Germany and by Soviet and Chinese communists simply because they were members of a race or class that had been demonized by intellectuals and political authority. In the beginning years of the 21st century, hundreds of thousands of Muslims in seven countries have been murdered and millions displaced in order to extend Washington’s hegemony.

  Power that is secularized and cut free of civilizing traditions is not limited by moral and religious scruples. V.I. Lenin made this clear when he defined the meaning of his dictatorship as “unlimited power, resting directly on force, not limited by anything.” Washington’s drive for hegemony over US citizens and the rest of the world is based entirely on the exercise of force and is resurrecting unaccountable power.

  Christianity’s emphasis on the worth of the individual makes such power as Lenin claimed, and Washington now claims, unthinkable. Be we religious or be we not, our celebration of Christ’s birthday celebrates a religion that made us masters of our souls and of our political life on Earth. Such a religion as this is worth holding on to even by atheists.

  As we enter into 2018, Western civilization, the product of thousands of years of striving, is in decline. Degeneracy is everywhere before our eyes. As the West sinks into tyranny, will Western peoples defend their liberty and their souls, or will they sink into the tyranny, which again has raised its ugly and all devouring head?

  

  

• Is Amazon Killing NYC Retailers Or Is The 'Rent Just Too Damn High?'

  A few weeks ago, the office of Council Member Helen Rosenthal of New York’s 6th District published the results of a business survey conducted on the Upper West Side that showed, among other things, that some 12% of retail store fronts lay vacant. 

  Of the 1,332 storefronts that we surveyed, we identified 1,170 active businesses — 88%.

   

  Twelve percent of storefronts (161) were unoccupied. Please note that “unoccupied” includes recently closed businesses, as well as new spaces that were not yet leased.

   

  Of the major commercial streets, Broadway and Amsterdam Avenue had the highest percentage of empty storefronts. Broadway had the largest number of empty storefronts (57), followed by Amsterdam Avenue (44) and Columbus Avenue (32).

  

  What’s worse, the survey results revealed that retail vacancies in certain areas of the Upper West Side have nearly doubled over the past 10 years.

  

  Of course, the fact that bricks-and-mortar retailers are struggling is hardly a new phenomenon…here are just a couple of our recent posts on the topic:

  • A Look At America’s Retail Apocalypse In Charts
  • 2017 Will Be The Worst Year For US Retail In History
  • Toys “R” Us Shocker: Bankrupt Toy Retailer To Close Up To 200 Stores Amid Collapsing Sales

  The question is whether New York City retailers, who have direct access to the wealthiest, and most densely populated, shoppers in the world, are simply succumbing to the ‘Amazon Effect’ like the rest of the country or whether Manhattan landlords are contributing to their own demise by continuously hiking rents while ignoring softening demand in hopes that it goes away?  According to Rosenthal’s office, the ‘blissful ignorance of landlords’ theory should not be underestimated.

  There are many reasons why businesses open and close in our community — major rent increases being a central one. A recent report from the office of State Senator Brad Hoylman cites two separate studies, one estimating that the average commercial rent in Manhattan increased by 34% from 2004 to 2014; and another showing that rents jumped by 42% in Manhattan from 2012 to 2015.

   

  Our office is also aware of instances where building owners have plans to re-develop their properties and are not interested in renting to commercial tenants in the short term.

   

  An added challenge throughout our city is the fact that a significant number of family-owned businesses do not have a successor ready to take over when the owner is ready to retire. Earlier this year, the New York City Public Advocate released a policy brief which reported that an estimated 3,700 businesses across the state close each year due to an owner’s retirement –leading to the loss of over 13,000 jobs annually.

   

  Commercial vacancies are an issue throughout Manhattan. The New York limes reported this summer that sections of Broadway in SoHo had vacancy rates as high as 20%.

  

  But, as The Guardian points out, the key to understanding New York’s soaring retail vacancies might lie in the changing make-up of the city’s landlords.  Unlike prior decades in which more buildings were owned by mom-and-pop operations, today’s Manhattan landlords are more likely to be large institutional investors and/or hedge funds that are unwilling to drop rents to match retail conditions and are more eager to get a markup on their portfolio by leasing to a large, recognizable, luxury tenant.

  “It’s not Amazon, it’s rent,” says Jeremiah Moss, author of the website and book Vanishing New York. “Over the decades, small businesses weathered the New York of the 70s with it near-bankruptcy and high crime. Businesses could survive the internet, but they need a reasonable rent to do that.”

   

  “They are running small businesses out of the city and replacing them with chain stores and temporary luxury businesses,” says Moss.

   

  In Vanishing New York, Moss writes of the toll the evisceration of distinct neighborhoods through real estate over-pricing has on the city. “It’s homogenizing and changing the character of the city,” he says. Even where landlords are offering competitive leases, they are often for two or five years, not the customary 10.

   

  “We’re seeing more stores front emptying, and we’re seeing a lot of turnover where you see spaces fill temporarily and then empty. And it’s continuing to get worse,” he says.

  New York retail property agent Robin Zendell also says it’s just too simple to blame Amazon. “When you see [that] every corner has a bank or a pharmacy, and there is a gym on the second floor, there’s a simple reason for that: people can’t afford the rent. Why did restaurants go to Brooklyn? Because it’s cool? No, because it was cheap, and [because] restaurateurs were sick of giving investors’ money away so they could pay thir rent.”

  Of course, while ‘greedy’ NY landlords are always a convenient scapegoat, we’re going to go out on a limb and suggest that a tripling of online sales as a percent of overall retail over the past 10 years may have something to do with Manhattan’s increasingly vacant store fronts…

  

  

  

• Assange's Twitter Account Mysteriously Deleted, Reappears Hours Later Under Strange Circumstances

  Update 2: in another odd twist, on Monday morning, the US Navy’s official Twitter account posted just these words in quotes “Julian Assange” which it then quickly deleted. Wikileaks captured a screenshot of the tweet as shown below:

  Here a screenshot of the deleted @USNavy Christmas tweet about @JulianAssange. Note the use of quotation marks.https://t.co/Asfw6cH6C7 pic.twitter.com/7Gg6mVOoCx

  — WikiLeaks (@wikileaks) December 25, 2017

  Shortly after, when the tweet was publicized, the account then tweeted shortly after, around noon that “an inadvertent keystroke by an authorized user of the U.S. Navy Office of Information’s Digitial Media Engagement Team caused the trending term “Julian Assange” to be tweeted from the Navy’s official Twitter account” and in a follow up tweet added that “the inadvertent tweet was briefly posted for a few second before it was quickly deleted by the same authorized user. The inadvertent tweet was sent during routine monitoring of trending topics.“

  This morning, an inadvertent keystroke by an authorized user of the U.S. Navy Office of Information’s Digitial Media Engagement Team caused the trending term “Julian Assange” to be tweeted from the Navy’s official Twitter account (@USNavy). (1/2)

  — U.S. Navy (@USNavy) December 25, 2017

  The inadvertent tweet was briefly posted for a few second before it was quickly deleted by the same authorized user. The inadvertent tweet was sent during routine monitoring of trending topics. (2/2)

  — U.S. Navy (@USNavy) December 25, 2017

  Adding to the mystery, in an official statement, WikiLeaks pointed out some “oddities” from Twitter and the US Navy, but noted that apart from increased surveillance at the Ecuadorian embassy, the 46-year-old Australian was fine. “Despite some oddities from the US Navy and Twitter today and increased physical surveillance @JulianAssange’s physical situation at the embassy remains unaltered–confined without charge in violation of two UN rulings requiring the UK to set him free,” the statement read.

  Despite some oddities from the US Navy and Twitter today and increased physical surveillance @JulianAssange‘s physical situation at the embassy remains unaltered–confined without charge in violation of two UN rulings requiring the UK to set him free.https://t.co/ne7cQ2Uryw

  — WikiLeaks (@wikileaks) December 25, 2017

  Without clarification from either Twitter or Assange, it’s still unclear what exactly happened to Assange’s Twitter account, and it’s absence prompted some to speculate that he was being silenced by the social media platform. Others have said it was as a promo stunt. Another account purporting to be Assange’s alternate handle claimed his page was deleted by Twitter ahead of publishing a huge new story, but there was no evidence Assange authored that message himself and the account was subsequently deleted.

  * * *

  Update: as of 9:30am ET, the @JulianAssange accounts has returned, although it appears to be a truncated or restored one, which shortly after its reappearance shows just over 1,000 followers.

  

  A “returned” Assange tweeted the following cartoon.

  pic.twitter.com/NpZOWzpwhQ

  — Julian Assange ???? (@JulianAssange) December 25, 2017

  Although as Lee Camp pointed out, “the first pic is the account that we were prevented from seeing for over 10 hours. The second is what’s “back.” The bio has changed and the new account is following 24 people …”

  The first pic is the account that we were prevented from seeing for over 10 hours. The second is what’s “back.” The bio has changed and the new account is following 24 people … pic.twitter.com/aDI34zP1X7

  — Lee Camp [Redacted] (@LeeCamp) December 25, 2017

   

  * * *

  Julian Assange’s Twitter account was mysteriously deleted on Christmas Eve, leaving perhaps the most important witness in the Trump-Russia investigation cut off from the rest of the world while he sits in the Ecuadorian Embassy in London. 

  

  Attempting to access Assange’s Twitter account results in the following message:

  

  This page only appears when an account has been deleted, not suspended – by either Twitter or the account owner. 

  It wasn’t clear whether the account was suspended or deleted by Twitter or Assange himself — or why or for how long. Twitter wasn’t commenting

  This tweet by the WikiLeaks Task Force – an official WikiLeaks handle, suggested that people shouldn’t jump to conclusions, as “haters and conspiracy theorists rush to post the usual attention seeking rubbish,” before wishing everyone a Merry Christmas.  

  Julian’s account disappears, so haters and conspiracy theorists rush to post the usual attention seeking rubbish. Ah, Twitter.

  Merry Christmas, people.https://t.co/oCBOW2Tc5L pic.twitter.com/GmdXG36Xt3

  — WikiLeaks Task Force (@WLTaskForce) December 25, 2017

  The official Wikileaks Twitter account was still live but wasn’t mentioning the Assange account.

  According to CBS, an account purporting to be an alternative Assange account was claiming Twitter had deleted his official one ahead of a blockbuster story he’s preparing to break. There was no confirmation that Assange was authoring that alternative account — and that account has now been suspended by Twitter.

  Meanwhile, Journalist Charles Johnson – who traveled with Rep. Dana Rohrabacher (R-CA) to London to meet with Assange in August, posted the following on Facebook after Assange’s Twitter account went down: 

  Moreover, on December 1, WikiLeaks’ official account tweeted “Merry Christmas from @WikiLeaks” with an embedded video referencing perpetual war, and the hashtags #Yemen #Libya #Iraq #Syria #Pakistan #Afghanistan #Somalia #Ukraine

  Merry Christmas from @WikiLeaks https://t.co/lmsmphuH2Nhttps://t.co/cGRnpjx6O8https://t.co/PkYqIcOZJW #Yemen #Libya #Iraq #Syria #Pakistan #Afghanistan #Somalia #Ukraine

  — WikiLeaks (@wikileaks) December 1, 2017

  Some have suggested that the events are part of some Christmas-linked plan, although so far there has been no confirmation. 

  The account deletion comes on the heels of a break-in last Monday at the Madrid office of WikiLeaks lawyer Baltasar Garzon’s, in what police described as a “very professional” operation. Garzon told El Periodico and Ser magazine “They had not taken what they have been looking for,” and client security “has not been affected,” however police are analyzing his computer equipment to determine whether any files were taken or copied. 

  Hours after the break-in, Julian Assange published a tweet calling a Jimmy Dore video “Brilliant” – prominently featuring Assange’s interview with a Dutch television host in which the WikiLeaks founder strongly implies that slain DNC IT staffer Seth Rich was the source of emails published by WikiLeaks during the 2016 election.  (Assange clip at 21:30)

  

  During the clip, Assange can be seen nodding his head in response to a question about Rich:

  

  In August, Congressman Dana Rohrabacher travelled to London with journalist Charles Johnson for a meeting with Assange, where Rohrabacher said the WikiLeaks founder offered “firsthand” information proving that the Trump campaign did not collude with Russia, and which would refute the Russian hacking theory.

  Rohrabacher brought that message back to Trump’s Chief of Staff, John Kelly, to propose a deal. In exchange for a presidential pardon, Assange would share evidence that would refute the Russian hacking theory by proving they weren’t the source of the emails, according to the WSJ. 

  “The possible “deal”—a term used by Mr. Rohrabacher during the Wednesday phone call—would involve a pardon of Mr. Assange or “something like that,” Mr. Rohrabacher said. In exchange, Mr. Assange would probably present a computer drive or other data-storage device that Mr. Rohrabacher said would exonerate Russia in the long-running controversy about who was the source of hacked and stolen material aimed at embarrassing the Democratic Party during the 2016 election.”

   

  ‘He would get nothing, obviously, if what he gave us was not proof,’ Mr. Rohrabacher said.

  When Trump was asked in late September about the Assange proposal, he responded that he’d “never heard” of it, causing Rohrabacher to unleash on John Kelly, who he blamed for blocking the proposal from reaching the President, Rohrabacher told the Daily Caller: 

  “I think the president’s answer indicates that there is a wall around him that is being created by people who do not want to expose this fraud that there was collusion between our intelligence community and the leaders of the Democratic Party,” Rohrabacher told The Daily Caller Tuesday in a phone interview.

   

  “This would have to be a cooperative effort between his own staff and the leadership in the intelligence communities to try to prevent the president from making the decision as to whether or not he wants to take the steps necessary to expose this horrendous lie that was shoved down the American people’s throats so incredibly earlier this year,” Rohrabacher said.

  Contributing to the notion of deep-state interference, CIA director Mike Pompeo referred to WikiLeaks as a “hostile intelligence service” in April, calling Julian Assange “a fraud, a coward hiding behind a screen” for exposing information about democratic governments rather than authoritarian regimes. This quite the ironic statement, considering Pompeo used leaked emails from WikiLeaks as proof “the fix was in” against President Trump. 

  Mike Pompeo was sharing Wikileaks documents on his Congressional Twitter account less than a year ago pic.twitter.com/cl5P6vnXSE

  — Jessica Schulberg (@jessicaschulb) April 13, 2017

   Let’s also not forget Donald Trump proclaiming “I Love Wikileaks!” less than a month before the 2016 election.

  So Julian Assange – ostensibly the most important witness in the Russia hacking investigation, offered to prove that Russia was not the source of the leaked emails in exchange for a pardon. This proposition was conveyed through Rep. Dana Rohrabacher to White House Chief of Staff John Kelly, who Rohrabacher says never allowed the deal to reach Trump for consideration.  Months later, WikiLeaks attorney Baltasar Garzon’s office was raided in a “very professional” operation which is being labeled an attempted robbery. Hours after the break-in, Julian Assange tweets a Jimmy Dore video containing his own strong implication that Seth Rich was the source of the leaked emails, and six days later his Twitter account is gone. 

  That said, tweets directly from the WikiLeaks urge not to jump to conclusions.

  Assange’s account deletion also comes on the heels of several new Twitter rules rolled out on December 18, which many feared was the beginning of a “purge” of conservative accounts over user behavior both on and off the platform. The rules are aimed at people who associate with hate groups that “use or promote violence against civilians to further their causes” – however nothing Assange has done comes close to fitting that description.

  So did Julian Assange delete his Twitter account – and if so, why? Was this yet another rogue Twitter employee lashing out on their last day, as was the case with President Trump’s temporary account deletion in early November? Or did Twitter delete the account of one of the most important figures in the 2016 election. 

  

  

• Jesus Was Born In A Police State

  Authored by John Whitehead via The Rutherford Institute,

  The Christmas narrative of a baby born in a manger is a familiar one.

  

  The Roman Empire, a police state in its own right, had ordered that a census be conducted. Joseph and his pregnant wife Mary traveled to the little town of Bethlehem so that they could be counted. There being no room for the couple at any of the inns, they stayed in a stable, where Mary gave birth to a baby boy, Jesus.

  Unfortunately, Jesus was born into a police state not unlike the growing menace of the American police state. And when he grew up, Jesus did not shy away from speaking truth to power. Indeed, his teachings undermined the political and religious establishment of his day. He was eventually crucified as a warning to others not to challenge the powers-that-be.

  Yet what if, instead of being born into the Roman police state, Jesus had been born and raised in the American police state?

  Rather than traveling to Bethlehem for a census, Jesus’ parents would have been mailed a 28-page American Community Survey, a mandatory government questionnaire documenting their habits, household inhabitants, work schedule, etc.

  Instead of being born in a manger, Jesus might have been born at home. Rather than wise men and shepherds bringing gifts, however, the baby’s parents might have been forced to ward off visits from state social workers intent on prosecuting them for the home birth. One couple in Washington had all three of their children removed after social services objected to the two youngest being birthed in an unassisted home delivery.

  Had Jesus’ parents been undocumented immigrants, they and the newborn baby might have been shuffled to a profit-driven, private prison for illegals where they would have been turned into cheap, forced laborers for corporations such as Starbucks, Microsoft, Walmart, and Victoria’s Secret.

  From the time he was old enough to attend school, Jesus would have been drilled in lessons of compliance and obedience to government authorities, while learning little about his own rights. Had he dared to step out of line while in school, he might have found himself tasered or beaten by a school resource officer, or at the very least suspended under a school zero tolerance policy that punishes minor infractions as harshly as more serious offenses.

  Had Jesus disappeared for a few hours let alone days as a 12-year-old, his parents would have been handcuffed, arrested and jailed for parental negligence.

  From the moment Jesus made contact with an “extremist” such as John the Baptist, he would have been flagged for surveillance because of his association with a prominent activist, peaceful or otherwise. Since 9/11, the FBI has actively carried out surveillance and intelligence-gathering operations on a broad range of activist groups.

  Jesus’ anti-government views would certainly have resulted in him being labeled a domestic extremist. Law enforcement agencies are being trained to recognize signs of anti-government extremism during interactions with potential extremists who share a “belief in the approaching collapse of government and the economy.”

  While traveling from community to community, Jesus might have been reported to government officials as “suspicious” under the Department of Homeland Security’s “See Something, Say Something” programs.

  Rather than being permitted to live as an itinerant preacher, Jesus might have found himself threatened with arrest for daring to live off the grid or sleeping outside. In fact, the number of cities that have resorted to criminalizing homelessness by enacting bans on camping, sleeping in vehicles, loitering and begging in public has doubled.

  Viewed by the government as a dissident and potential threat to its power, Jesus might have had government spies planted among his followers to monitor his activities, report on his movements, and entrap him into breaking the law. Such Judases today—called informants—often receive hefty paychecks from the government for their treachery.

  Had Jesus used the internet to spread his radical message of peace and love, he might have found his blog posts infiltrated by government spies attempting to undermine his integrity, discredit him or plant incriminating information online about him. At the very least, he would have had his website hacked and his email monitored.

  Had Jesus attempted to feed large crowds of people, he would have been threatened with arrest for violating various ordinances prohibiting the distribution of food without a permit. Florida officials arrested a 90-year-old man for feeding the homeless on a public beach.

  Had Jesus spoken publicly about his 40 days in the desert and his conversations with the devil, he might have been labeled mentally ill and detained in a psych ward with no access to family or friends.

  Without a doubt, had Jesus attempted to overturn tables in a Jewish temple and rage against the materialism of religious institutions, he would have been charged with a hate crime. Currently, 45 states and the federal government have hate crime laws on the books.

  Rather than having armed guards capture Jesus in a public place, government officials would have ordered that a SWAT team carry out a raid on Jesus and his followers, complete with flash-bang grenades and military equipment. There are upwards of 80,000 such SWAT team raids carried out every year.

  Had anyone reported Jesus to the police as being potentially dangerous, he might have found himself confronted—and killed—by police officers for whom any perceived act of non-compliance (a twitch, a question, a frown) can result in them shooting first and asking questions later.

  Charged with treason and labeled a domestic terrorist, Jesus might have been sentenced to a life-term in a private prison where he would have been forced to provide slave labor for corporations or put to death by way of the electric chair or a lethal mixture of drugs.

  Either way, as I show in my book Battlefield America: The War on the American People, whether Jesus had been born in our modern age or his own, he still would have died at the hands of a police state.

  Remember, what happened on that starry night in Bethlehem is only part of the story. That baby in the manger grew up to be a man who did not turn away from evil but instead spoke out against it, and we must do no less.

  

  

• NSA Whistleblower Snowden Launches Mobile App For Paranoid People

  Famed NSA Whistleblower Edward Snowden has just launched Haven, an app for people to transform any Android smartphone into a high-tech security system for detecting intrusions.

  

  Snowden, while currently on the run from the CIA, hiding somewhere in Moscow until 2020, has found enough time to launch his new mobile security app last Friday for the sufficiently paranoid person (e.g. activists, dissidents, journalists, & etc).

  "When the lead developer explained the project to his young children, they found another use for it: 'We’re going to catch Santa!' " https://t.co/Beangjk90g

  — Edward Snowden (@Snowden) December 23, 2017

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

  Haven is designed to be installed on any Android smartphone, particularly inexpensive and older devices. It operates like a home surveillance system, leveraging on-device sensors to provide surveillance of physical areas. Sensors within the Android phone monitor motion, sound, vibration and light, watching for unwanted guests to notify a user. Combining Haven with an array of sensors in any smartphone, coupled with the most secure communications technologies like Signal and Tor, the app is providing Snowden and other activists around the world with a mobile security system.

  The app was developed by Freedom of the Press Foundation, Guardian Project, and Snowden. According to the Guardian Project, the app’s prototype funding was provided by FoPF, and donations to support continuing work can be contributed through their site: https://freedom.press/donate-support-haven-open-source-project/.

  According to the Guardian Project, this is how the app works,

  Haven only saves images and sound when triggered by motion or volume, and stores everything locally on the device. You can position the device’s camera to capture visible motion, or set your phone somewhere discreet to just listen for noises. Get secure notifications of intrusion events instantly and access the logs remotely or anytime later.

  

  On-device sensors monitor for disturbance, and then logs the data:

  • Accelerometer: phone’s motion and vibration
  • Camera: motion in the phone’s visible surroundings from front or back camera
  • Microphone: noises in the environment
  • Light: change in light from ambient light sensor
  • Power: detect device being unplugged or power loss

  Further, the group explains why Haven is well suited for Android devices and does make the claim, a version for the iPhone is on the horizon.

  While we hope to support a version of Haven that runs directly on iOS devices in the future, iPhone users can still benefit from Haven today. You can purchase an inexpensive Android phone for less than $100, and use that as your “Haven Device”, that you leave behind, while you keep your iPhone with you. If you run Signal on your iPhone, you can configure Haven on Android to send encrypted notifications, with photos and audio, directly to you. If you enable the “Tor Onion Service” feature in Haven (requires installing “Orbot” app as well), you can remotely access all Haven log data from your iPhone, using the Onion Browser app. So, no, iPhone users we didn’t forget about you, and hope you’ll pick up an Android burner today for a few bucks!

  If one of the sensors was triggered, a notification would be sent to one of the following platforms:

  • SMS: a message is sent to the number specified when monitoring started
  • Signal: if configured, can send end-to-end encryption notifications via Signal

  

   

  My partner has been testing Haven for a few months with a spare phone. Every time you open the closet, it sends a picture by Signal. In addition to impressive intrusion detection capabilities, you can also use it to send helpful reminders! ? https://t.co/FHi1bjFsLP pic.twitter.com/IS58HzDVha

  — lex.txt (@lex_is) December 22, 2017

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

  As for Snowden, he remains in an asylum somewhere in Moscow until 2020 when his residence permit expires.

  With the launch of Haven, it seems as Snowden is attempting to change the calculus of risk for when US authorities come hunting for him once more.

  If all else fails, Snowden might have just invented a baby monitor for the broke millennial. 

  

  

• Man Arrested For Punching Wells Fargo ATM: "It Gave Him Too Much Money"

  Call it the holiday’s token bizarro incident: according to Florida Today, a 23-year-old man who told police he punched a Wells Fargo ATM because it gave him too much cash, was arrested after bank officials said the attack caused at least $5,000 in damages, which elevated the inexplicable and idiotic temper tantrum into a felony crime.

  

  Michael Oleksik, 23, 5’11”, 155lbs, of Rockledge, FL; charges: Criminal mischief >$1000.

  Cocoa police charged Michael Joseph Oleksik, of Merritt Island, on Friday with criminal mischief nearly a month into the investigation of a disturbance at the Wells Fargo bank branch at 834 N. Cocoa Boulevard, in Cocoa. According to authorities, Oleksik could be seen on surveillance video standing at the ATM, pummeling the electronic teller’s touch screen on Nov. 29.

  A short time later, an apologetic Oleksik called the bank and told a manager that he punched the ATM because he was “angry the ATM was giving him too much money and he did not know what to do,” Florida Today reported. Oleksik then explained that he was in a hurry for work and apologized for the damage to the bank’s ATM.

  While Oleksik’s behavior may appear irrational at first glance, a quick look at his arrest record, which reveals not only domestic violence charges, but also disorderly drug intoxication and resisting and intimidating a police officer, and suddenly his vendetta with the ATM makes sense.

  

  Wells Fargo – clearly distraught at the treatment one of its ATM machines was subjected to – contacted the Cocoa Police Department and asked to press charges. Oleksik was arrested Friday and booked into the Brevard County Jail Complex in Sharpes.

  

  

• Is Christmas Inefficient?

  Authored by Jeffrey Tucker via The Mises Institute,

  After hundreds of years of attacks on Christmas, economists have finally gotten into the act.

  

  Yale University’s Joel Waldfogel, writing in the American Economic Review, condemns what he calls “The Deadweight Loss of Christmas.” Once you cut through the calculus and graphs, his conclusion is clear: though Christmas generates a $50 billion gift-giving industry, a tenth to a third of that is sheer loss. Why? Because the recipient doesn’t always get what he wants. Given the chance, the recipient would have purchased something else.

  All of this follows directly from his underlying theory. In neoclassical economics, the consumer is best off when he chooses, within his means, the highest-rank good or service on his “utility” scale. If he can afford a steak, and he has to settle for a hot dog because the restaurant is out of t-bone, he experiences dead-weight loss. It’s even worse if he has to pay the price of steak and gets a wiener instead.

  So it is with gifts. They generate a net loss, this theory says, unless the recipient would have otherwise purchased, with his own cash, precisely what he unwraps. Of course, this is rarely the case. To provide empirical meat to his theory, Professor Waldfogel interviewed students. The students received an average of $438 in gifts, for which these kids reported they would have paid only $313 if they had done the shopping themselves. The gap narrows when the gift is from a friend, and widens when it’s from the family.

  Imagine Mr. Waldfogel attending your next Christmas gathering. Aunt Janie gives her nephews soap-on-a-rope, and they all praise her for her generosity and thoughtfulness. The economist then prods the youngsters to ‘fess up that soap-on-a-rope isn’t so great after all, and with the $9.95, they would have bought the newest Spice Girls tape. He declares the gathering a waste and encourages the party to break up in the interest of everyone’s economic welfare.

  Professor Waldfogel proposes that we could eliminate these losses, which could be as high as $13 billion per year, by giving money instead of gifts, and letting the recipient spend it as he chooses. But then why not take matters one step further? What is the point of all this shuffling around of cash in the first place? According to neoclassical theory, it would be far better if everyone just clung to his own bank account and spent his own money as he saw fit. Indeed, we’d all be better off economically if Christmas were merely abolished—heck, maybe the Congress should do it—until such time as we all have perfect knowledge of each other’s preferences and are willing to act on them.

  Far from being one man’s opinion, this thesis is becoming a classic “extra credit” question on microeconomics tests. Waldfogel is only distinguished for having formalized the model and tested it against his own students’ experience. The conclusion allows economists to presume they are smarter than the mass of the buying public, which persists in the irrational habit of buying things for each other instead of sending money or, even better, just spending it on themselves.

  So, what’s wrong with the theory? Plenty. It equates personal utility with dollars spent, the classic conflation of value and price. In fact, a gift is a special kind of good with its own value. For example, we value the soap from the Aunt precisely because of its tie-in with familial affection. Even if the recipient would never have bought it, his personal utility is enhanced by the knowledge that his extended family is thinking about him and cares enough to give.

  The source matters. If soap were given by a classmate who complains that you are odoriferously challenged, the “gift” is an insult in disguise. It has negative value. “Rich gifts wax poor when the givers prove unkind,” writes Shakespeare, who seemed to have a more complete view of economics than Professor Waldfogel. Neither is the person who receives a gift purchased under duress likely to be grateful. People on long-term welfare, for example, tend to think of taxpayers as suckers.

  A comment later published in the same journal picked up on this. The authors (one from Harvard, one from the University of Miami) also did an empirical test. They used a different method (asking students about prices of specific gifts, not whole bundles), a larger sample of students (209 instead of 78), and asked more detailed questions. The results were the opposite of Waldfogel’s. The authors showed that more than half valued the gift above its retail price, suggesting that Christmas giving actually represents a gain in social welfare.

  Moreover, these authors found that gifts asked for were less valued than gifts that were not. This fits with experience: we’re pleased to get what we want, but especially appreciative when we like something we had not expected. Indeed, good gift shoppers think about this ahead of time. They buy someone a tie he would never buy for himself. They buy items the receiver might be too modest or frugal to purchase himself, even if he had the resources.

  Some items are just gifts and nothing more: fancy soaps, paisley boxer shorts, blankets with school logos, coffee cups printed with witty slogans, and the like. That’s why there can be such things as “gift shops” as distinguished from regular stores. Gifts have a different value because they are altogether different goods. They embody not only themselves but also their meaning. Imagine if someone came to dinner, and instead of bringing a bottle of wine, gave you $15 and told you to spend it on anything you wanted. It’s just not the same.

  For his part, Waldfogel responds by accusing the authors of biasing their results. The very nature of their survey questions encouraged students to report “sentimental value” instead of pure “material value.” Going back to the drawing board, and correcting for this and other supposed errors, Waldfogel surveyed another group of students—455 this time—and still found a dead-weight loss, less than before, but a substantial one nonetheless. Christmas is inefficient: that’s his story and he’s sticking to it.

  Of course there is no way to decouple one kind of value from another kind of value, since all economic value is ultimately subjective. Surveys can’t reveal what people value; only action in the marketplace does that. What’s deeply odd about this wrangling is that everyone seems to agree that only the value to the recipient should matter. That leaves out the really crucial point of gift giving: that it benefits the giver as well as the receiver.

  People feel good in being generous, especially towards family and friends. Giving is an act of charity and liberality, virtues people practice because they’re good for the soul. And even if they aren’t, economists should follow the rule of “demonstrated preference”: if a person gives a gift, it is because he preferred giving the gift to keeping his own money. The action is “utility enhancing” on its own terms. Why? Because it, as opposed to something else, took place. Value is revealed in the preferences people demonstrate voluntarily. A well-chosen gift also reveals something about ourselves: we care enough to make our affections known in a personal way.

  Again, the problem of the welfare state presents itself. In its form of “charity,” people do not give voluntarily. So resistant are people to dumping billions of dollars on millions of freeloaders, that the government has to threaten them with fines and jail terms (that’s what taxation is) to get them to fork over this “gift.” No one demonstrates a preference for the welfare state (voting doesn’t count since people are not using their own resources to purchase the services for which they vote). This degree of redistribution has to be imposed. Taxation, in contrast to Christmas, is a clear example of a utility-reducing activity.

  But economists of the neoclassical school have rarely bothered with such distinctions. Their theories leave little room for reflection on property rights, individual choice, and the distinction between market exchange and forced redistribution. For them, a mathematically determined standard of efficiency is the only test that matters. Not even an absurd conclusion—for instance, that giving gifts is inefficient—causes them to rethink their core theory.

  Economists are hardly alone in this. Skeptics and opponents of the market economy have long had a beef with the idea of giving and charity, especially as it occurs at Christmas.

  Perhaps the socialists have long understood something about Christmas that others, even advocates of the market, have overlooked. In the institution of the gift, we find a strong rationale for the establishment and protection of private property and the capitalist economy. In order to give, we must first produce, acquire, own.

  G.K. Chesterton, a great defender of Christmas against English Puritans who regarded it as corrupt and pagan, observed that collective ownership would mean the end of voluntary giving. Moreover, he clarified, “giving is not the same as sharing: giving is the opposite of sharing. Sharing is based on the idea that there is no property, or at least no personal property. But giving a thing to another man is as much based on personal property as keeping it to yourself.”

  And contrary to the complaints of materialism at Christmas, meaningful gifts can be as elaborate as gold, frankincense, and myrrh, or as humble as two fish and five loaves.

  It’s no wonder, then, that history’s dreariest socialists have denounced Christmas. The economic core of its gift giving centers on private property, while its ethical core belies the claim that private property institutionalizes greed.

  “There is the greatest pleasure in doing a kindness or service to friends or guests or companions,” wrote Aristotle in The Politics, “which can only be rendered when a man has private property. These advantages are lost by excessive unification of the state…. No one, when men have all things in common, will any longer set an example of liberality or do any liberal action; for liberality consists in the use which is made of property.”

  As for intellectuals—economists no less—who have failed to understand this simple truth, it’s staggering to think of the dead-weight loss their ideas have imposed on society.

  

  

• What's The Greatest Christmas Movie Of All Time?

  The news cycle this year was so hectic – particularly around the holidays – that Americans were apparently too overwhelmed to engage in that perennial holiday pastime: Arguing over which Christmas movie is the best Christmas movie.

  Luckily, Axios teamed up with SurveyMonkey to create this (unscientific) poll of people’s Christmas movie preferences, broken down by gender. A Christmas Story nabbed the top spot for both genders.

  

  A few bona fide Christmas classics were notably absent from the results: Love Actually, Scrooged, National Lampoon’s Christmas and the Nightmare Before Christmas, to name a few.

   

  

  

• Christmas In Venezuela: What It's Like After Socialism Destroys Your Country

  Authored by Daisy Luther via The Organic Prepper blog,

  The situation in Venezuela is grim and not getting any better.

  

  A socialist government has destroyed what used to be one of the healthiest economies in the world and turned it into something for which few were prepared. As we get ready for the holidays here in America, with our usual spending frenzies and feasts, Christmas in Venezuela is looking a lot different than it did a mere decade ago. Maybe some of the young people who think socialism is the answer to all our societal woes will read this and realize that this form of government doesn’t work – it destroys all hope.

  Last week, I got an email from a prepper named J.G. Martinez D, or Jose. He offered to send me some on-the-ground articles for as long as the internet is up and running. I thought, given the season, that it would be interesting to follow up the interview with Selco regarding his SHTF Christmas with an interview about Christmas in Venezuela. Jose is one of the few people in Venezuela who was a prepper before this collapse happened so his perspective is quite valuable.

  Can you tell us a bit about yourself?

  I am an upper middle class, professional former worker of the oil state company, in my 40s. A Bachelor’s degree from one of the best national Universities. I have a small 4 members family, plus two cats and a dog. An old but in good shape SUV, a good 150 square meters house in a nice neighborhood, in a small but (formerly) prosperous city with two middle size malls. Everything in the period 2004-2012 was just fine. After that period, the economy started a declining trend that has been increasing faster each week.

  Being a prepper, and having experienced two major similar crisis in my lifetime (civil turmoil 1989, and Caracas coup d’état in 1992), inspired me to find a second (and even a third) income source and some months’ worth of food at home. I started to write for a Forex blog, and earning some extra cash for preppings: a genset, (now used twice weekly because of the power cuts) additional freezers, a CNC machine for a home-based small business, and some professional audio equipment for voice over and podcast broadcasting, another economical activity that I enjoy, after my career in the oil company stopped. A water tank with a concrete base (the power cuts stop the water supply pumping system), and reinforced bars for the windows, enclosing the patio for security, and some other improvements.

  This has allowed my family to deal with most of the terrible situation in Venezuela. I am now outside the country, planning for the exile of my family. I know things are going to get a lot worse before they start to get better, and don´t want them there once the shooting begins.

  Tell me a little bit about the traditions in Venezuela. What was Christmas like before the economic collapse?

  Christmas in Venezuela was one of the most popular times of the year, after school holidays. A lot of people, mostly in the big cities, went to the beach to enjoy those free days. Venezuelans are very family-oriented people. For us, Christmas is a season for being with family even in the entire year we have not been able to visit them. There was an exodus from one side of the country to the other one, people traveling in all directions to gather with their beloved ones, mainly from the big cities to the province states.

  Since December 1^st, shops, coffees, restaurants, houses, entire subdivisions and streets, government offices, schools, and all kind of business were decorated and the traditional “Nacimientos” or representations of baby Jesus birth in the crib, with Saint Joseph, virgin Maria, and the three wizard kings. There were contests with the most elaborated Nacimiento would be the winner. And the traditional living Nacimiento.

  The general environment was a happy one, one of hope and confidence in the future. One of our Christmas carols, called “gaita” totally unrelated to the western anglophone ones, are played with drums and all kind of instruments, and for the untrained ears, it could sound something like merengue. It has been a totally pleasant surprise for the foreigners to come to a church for the services and find people dancing and singing traditional songs. Lights and all kind of ornaments hanged from doors, walls, windows and every imaginable place.

  Malls were full with people buying all kind of presents, and temporary employment was a permanent need for the merchants since the first day of December.  All kind of toys and kid’s articles were sold even in the streets, for the baby Jesus birth night.

  Many people piled up their mattresses, pots, and pans in the family car, heading for wonderful vacation destinations like Isla Margarita, with lots of beautiful beaches, or the mountains in Merida, in Los Andes. Another tradition is buying new clothing and or shoes (“estrenos”) for the 24, 25, and 31 December evening, to dress up in dinner while the children played with their new toys, and receiving the new year with the best new clothing to ask for prosperity.

  How have the traditions you described above changed now that there is very little money?

  Without money, and cash scarcity, traveling is very hard. Many people have restricted their family gatherings. Prices of bus tickets are very high for the common person, and airplane tickets are a joke. 75% of the national flights fleet is on hold because of lack of maintenance.

  I have not known of anyone with kids in the last 4 years that could buy a new attire for themselves to use on the 24 and 31 December nights. Most of the available money is for 24/31 December dinner, or kid’s toys, if any.

  Many kids these years have received a very simple toy, instead of those most expensive and fancy ones. And many others have not been able to receive any toy at all. They have seen people looking inside the garbage bags for food, and despite their age they seem to understand what is happening and don’t ask for expensive toys to baby Jesus, leaving the parents to relieve some pressure and get them whatever they can.

  However, the hard part is that many kids were used to going to visit their grandparents, and nowadays this kind of family trips are just not possible. There is no cash, collapsed transportation, no parts for the family cars. You get the picture.

  What was your traditional Christmas dinner before?

  Our family Christmas dinner includes roasted pork leg, with olives and capers; a special loaf of bread (“pan de jamon”) with lots of olives, ham, bacon, and capers inside, and hen salad, with potatoes, carrots, mayonnaise, petit pois, the very unique and traditional “Hallaca”. This is sort of an envelope with banana leaves, filled up with a tasty mixture: beef and pork stew, olives, boiled eggs (recipe varies with the region, East, Center, West, and/or the origin of the family), surrounded by a mass elaborated with the corn flour, the same we use for the arepas. It was common to cook about 150 or 200 hallacas for a 4-person family.

  For bigger families, everyone collaborated with money and the hallacas-making was a team labor, with over 10 people or more, and the result was 1200 or 1500 hallacas. A family of four, like us, with 100 hallacas, a roasted leg, and a huge bowl of hen salad in our extra freezer, we would eat hallacas and Christmas food until middle January!

  Normally, since my childhood, in our table on Christmas Eve, there were grapes, apples, dried fruits, raisins, nuts, and even hazelnuts. Most of these were imported (we only grow grapes in some places), but there were plenty of all this in the middle class tables the Christmas and New Year eve. For dessert, a sweet called “dulce de lechoza”, made with slices of green papaya, boiled with lots of sugar and clove, served with a slice of Christmas cake, a cake with raisins, chocolate, dried fruits and some rum, called “Torta negra” or Black Cake. There is a very traditional punch, mainly for ladies, called “Ponche Crema”, with a secret recipe invented 140 years ago by Eliodoro Gonzalez, a chemist from Caracas.

  Of course, most of the people could afford a whisky bottle. Most of the time we had some cider for the New Years Eve toast to receive the incoming year; people who could afford it bought champagne.

  Before, it was common for someone who was shopping or just passing by, to go to wish a merry Christmas to a friend and receive a plastic bag with 6 or 8 hallacas “so you can taste them”, and some “Dulce de lechoza” or Torta Negra.

  What are families eating for Christmas dinner now?

  Nowadays, families are mostly eating beans and lentils, whenever they can be found, and white rice, sometimes hard to find. Middle class made an extra effort for at least one hallaca for each member of the family at the Christmas dinner eve, and mostly bought to people who makes a temporary business by preparing, cooking and selling hallacas. Those who can afford to make hallacas at home are not too many, and people does not give away hallacas to friends and family so often. The most easy meal for Christmas dinner seems to be just the hen salad. There are no wheat flour at fair prices for ham bread or cake, nor olives or other ingredients at affordable prices. Instead of a complete pork leg, some people just buy (if they can find it)some pork meat and roast it in the oven, just for Christmas Eve.

  Fortunately last year we had bought a lot of staples for hallacas and other things for the dinner in August, like a small frozen pork leg and flour, and we were able to deal not just the high prices, but the scarcity as well. Our Christmas dinner was a very normal one, a little bit sad, as you may suppose. A lot of neighbors have left the country, and their houses were empty and silent. The subdivision main street once filled with kids in bicycles, dogs and people with babies, now looks like a ghost town.

  What kind of gifts are people giving this year? How are they acquiring them?

  Pricing of the toys, after 18 years of currency control exchange, makes them extremely hard to afford. Families with many children just don’t buy toys, or new clothing. All the money goes for feeding needs, if some staples can be found somewhere.

  Old toys, in good shape, are sold in garage sales, mainly from struggling middle class people, but that was the last two years…because the middle class is running away from the country. People who can’t afford to buy new toys just trade work hours, or buy used cheaper toys. With a pair of shoes costing several minimum wages, many people is not buying anything else but basic staples. Other people who really wants to give something are using as gifts previously used items. There is not enough money in people’s hands.

  Prepping allowed us to get the toys for our child early, in September, so we are not with the last minute rush.

  How are children dealing with the changes during the holiday season? Is it easier or more difficult for them than the adults?

  Many children are pretty aware of the situation. Middle class kids have noticed the people roaming in the streets and ripping the garbage bags looking for something to eat, and asking for bread, money or something outside bakeries, malls and supermarkets.

  They have come to understand, the hard way, that everyone is having a rough time, and they are lucky to have a good house, that their relatives (mostly) still have a car they can use (many of middle class families cars are awaiting for non-affordable spare parts like tires, batteries or others).

  This said, children know that anything Baby Jesus or Santa could bring along is a plus. It is touching to read that in their letters, they have asked for toys as well for the poor children. They see their parent’s faces arriving at home with a couple of grocery bags, and hear the adults conversations about the crisis. It is has been very hard for many of them. I have known by mouth of a psychologist friend of us that his little patients (he works mainly with children) are having nightmares and night terrors associated to what they see on the streets. Everyone is having a hard time.

  What are some of the creative solutions that people are coming up with to make the holidays special?

  People are trying to deal with the situation by means of making clear to the kids that what is important is being healthy, and that the family is all together, for instance. But the most needy are having a harsh time.

  Some people has risen chickens for Christmas dinner, in whatever space they had available, but with the danger to be robbed. Other people puts together whatever cash they can find, scarce as well, and buy in bakeries all the ham bread and other stuff, to resell in the streets.

  They generate scarcity in the bakeries, and inflate the prices to awesome levels. I have known that in coastal towns like those all around Margarita Island, they are using fish in the Hallacas, instead of beef and pork, for example. And instead of hen salad, sardines salad. My wife is using some sugar substitutes, as a traditional cane juice.

  Are politics/government affecting the holidays in any way? Are they providing any type of relief or treats for families? Are they offering any suggestions to make this time of year more special?

  Sure, they are trying to wash their nasty face with handouts. The relief, or treats was a Christmas bonus for those holding that carnet imposed by the Government to their supposed followers, and it was not even for all of the carnet holders neither.

  They openly offered pork legs, toys and other goodies at low prices for those who vote for the Socialist Party. Of course this was all lies. The goodies are for the NGs, for the riot police, and the military who suffocated the recent demonstrations with over 130 persons killed.

  Do you have any stories you could share of post-collapse Christmas in Venezuela?

  The worst of the collapse has not been seen yet. But it is quite remarkable to notice that in other countries, the rush for electronic appliances sales generate turmoil in the stores, meanwhile in Venezuela it is the access to basic staples.

  My wife was casually in a small supermarket a few days ago, when unexpectedly a couple of employees started nervously to stack powdered milk in the shelves. This is one of the most precious staples in Venezuela, much more than the liquid milk, for reasons known only to Venezuelans, and that I myself can´t explain despite being a Venezuelan. Maybe the low price, and that it can be stashed for a long time.

  So there were some soldiers custodying the supermarket, and ask the people to make a line. Suddenly, a large amount of people invaded the supermarket, and pushed aside the two employees, who fell to the ground under the avalanche of people. My wife took the kid to her side, just on time so the horde would not push him and knock him to the ground and step on him. My wife, terrified with that scene, once she was able to move around to get if she could get a package, stood next to a soldier. My kid look at the soldier and, innocently asked with his little voice if he could get him some milk for his cereal. The soldier look down on the kid, and just patted his little head, with a knot in his throat, looking at my wife with a sense of impotence.

  Would you be prepared?

  The stories of Christmas in Venezuela should be eye-opening to anyone who is trying to get prepared for a long-term event.

  The way that life has changed there is stark, dramatic, and something that could happen in any country in which the government turns to socialism. Would you be prepared for life in a collapse situation? Would you be able to provide special things for those you love to make the holidays a little bit happier?

  

  

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