Today’s News 13th February 2018

  • It's Officially Now Illegal To Accuse Poland Of Complicity In Nazi War Crimes

    Authored by Geneviève Zubrzycki via TheConversation.com,

    On Jan. 26, the eve of International Holocaust Remembrance Day, the Polish parliament voted in favor of a bill making it illegal to accuse Poland of complicity in Nazi crimes.

    ‘Anti-Semitism is treatable’ – a banner at a Warsaw demonstration.

    This caused immediate outrage around the world and nowhere more so than in a country that has been, until now, a close ally of Poland: Israel. Prime Minister Benjamin Netanyahu described the bill as “distortion of the truth, the rewriting of history and the denial of the Holocaust.

    And yet, 10 days later, Poland’s president, Andrzej Duda, signed the bill into law retorting that “the historic truth is that there was no systematic institutionalized participation among Poles [in the Holocaust].”

    What is happening? Why, over 70 years since the end of the Second World War, is this argument taking place?

    I am a sociologist who has studied controversies around the memory of the Holocaust in Poland. For me, this dispute is more than a crisis in Polish-Jewish relations. It is, above all, a crisis in Poland’s national identity.

    The memory of World War II in Poland

    This is not the first time the Poles have legislated against what they see as defamation of Poland’s record in World War II, but it is certainly the most wide-reaching. Under this new law, the punishment for people claiming that “the Polish Nation or the Republic of Poland is responsible or co-responsible for Nazi crimes committed by the Third Reich” carries a possible prison sentence of up to three years.

    The timing of the vote was no accident. The government used the occasion of International Holocaust Remembrance Day as a platform to denounce the misnomer “Polish death camps” that some – including former President Barack Obama – have used to refer to Nazi concentration camps in occupied Poland.

    The Polish government, along with other Polish organizations, has been fighting the use of that expression in foreign media for several years, and with considerable success. Most American newspapers and other major media outlets have updated their stylebooks to stop those words being used.

    Nevertheless, given the growing controversy, the German minister of foreign affairs took it upon himself to declare that the Germans bore the entire responsibility for the extermination camps. But then he added that “the actions of individual collaborators do not alter that fact.”

    And therein lies the rub.

    Many Poles find it difficult to accept they could have played a role in the Holocaust. That is because, unlike many other nations, the Polish state did not collaborate with the Nazis. Considered an inferior race by the Nazis, Poles were targeted for cultural extermination to facilitate German expansion to the East. Polish elites were systematically murdered. Tens of thousands of Poles were imprisoned in concentration camps or were forced into slave labor.

    The Old Town burns during the Warsaw Uprising, August 1944. Museum of Warsaw

    Poland’s losses in World War II were enormous: Approximately 6 million Polish citizens were killed in the war, over half of whom were Jewish. Warsaw was left in ruins, and its 1944 uprising alone cost the lives of about 150,000 citizens.

    The dominant Polish narrative of World War II is, therefore, about victimhood, which fits squarely into its broader national mythology of martyrdom.

    Adam Mickiewicz (1798-1855) Unknown

    Repeatedly invaded by its powerful neighbors, the Polish state disappeared from the European map for over a century – from 1795 to 1918. Poland’s national bard, the 19th century poet Adam Mickiewicz, described his country as a “Christ among nations.” In this telling Poles are a chosen people, innocent sufferers at the hands of evil oppressors.

    “Revelations” of crimes committed against Jews by Poles tarnish this narrative and shake Polish national identity to its core.

    Narrative shock

    The fact is, however, as historians have shown, crimes committed against Jews by Poles were much more prevalent and widespread than most people realized.

    Perhaps the most controversial and impactful research is that of the Polish-born Princeton University professor, Jan T. Gross.

    In his 2000 book “Neighbors,” Gross recounts in painful detail the violent murders of Jews by their ethnically Polish neighbors in the small town of Jedwabne on July 10, 1941.

    The book marked a watershed in the public debate about Polish-Jewish relations.

    On July 10, 2001, roughly a year after the publication of Gross’ book, the Polish government acknowledged the murders and erected a monument at the site where several hundred Jews were forcibly brought to a barn and burned alive. Although the monument’s inscription fails to explicitly indicate that it was ethnic Poles and not Germans who committed the crime, the official apology by then-President Aleksander Kwaśniewski was unequivocal. “Here in Jedwabne,” he said, “citizens of the Republic of Poland died at the hands of other citizens of the Republic of Poland.”

    The Jedwabne memorial. Genevieve Zubrzycki, Author provided

    Such was the shock the story of Jedwabne caused that it is possible to distinguish between Poland “before and after” the appearance of Gross’ book. As leading Catholic journalist Agnieszka Magdziak Miszewska put it: “Facing up to the painful truth of Jedwabne is … the most serious test that we Poles have had to confront in the last decade.”

    Law and Justice’s politics of history

    It is that test, arguably, that the ruling Law and Justice party is failing.

    In the battle over Polish collective memory, the party has been promoting the stories of the Poles who rescued Jews – and who are honored by Israel as the “Righteous Among Nations” – by creating museums and monuments in their name.

    Through the new “Holocaust Law,” the government is, in effect, trying to repress knowledge of crimes committed against Jews by Poles. The defense of the law, however, goes one step further. In a remarkable case of what I would describe as manipulating the message, Prime Minister Mateusz Morawiecki issued a video statement claiming that it is the Poles who are the guardians of historical truth and fighters against hatred.

    And yet, the same politicians remain silent when their supporters express anti-Semitic and anti-refugee views. On Feb. 5, for example, demonstrators impatient for President Duda to sign the Holocaust law gathered in front of the Presidential Palace chanting anti-Semitic slogans and demanding that he “remove [his] yarmulke and sign the law!”

    The president did sign the law, but he also sent it to the country’s constitutional court for examination.

    Those Poles opposed to the law – and there are many, judging by the number of organizations and public figures denouncing it and the number of petitions circulating – hope that it will be deemed unconstitutional because it represses freedom of speech and could significantly curtail academic research.

    Regardless of the ultimate outcome, however, the government’s politics of history will continue to be waged on many other fronts. What is at stake, in my view, is nothing less than the definition of Polish national identity. This is why, for all the international outrage, the controversy about the Holocaust law is hottest inside Poland, among Poles who are now debating what it means to be Polish and where Poland is going.

  • Dutch Finance Minister Admits He Lied About Putin's Plans For A "Greater Russia"

    In a shocking admission, Dutch Foreign Minister Halbe Zijlstra said he lied when he claimed to have heard President Vladimir Putin describing an ambition to unify Russia, Ukraine, Belarus, the Baltic states and Kazakhstan into a single super-state to rival the influence of the former Soviet Union.

    Zijlstra claimed at a party conference in 2016 that he had overheard Putin outlining the grand plan for a “Greater Russia” in 2006 during a gathering of businessmen. At the time, Zijlstra was working at Shell, RT reports.

    Dutch

    In the original retelling of the story, Zijlstra said he had been in a back room of a dacha (country house) when he heard Putin define “Great Russia” as “Russia, Belarus, Ukraine and the Baltic states,” adding that “Kazakhstan was nice to have.”

    The story was questioned by the newspaper Volkskrant, however, which quickly discovered that Zijlstra had not even attended the 2006 business meeting in Russia, despite being part of the Shell delegation. When confronted about this, the minister acknowledged that he had lied, and said he was simply trying to protect a source.

    “I made the decision that this is an important geopolitical story with serious implications,” he said.

    I put myself in the story to make sure that the revelations weren’t about the person who was actually there. Because that could have had implications for him or his company.”

    Zijlstra insisted he was told as much from a source whom he refused to name. The newspaper itself says the source was Jeroen van der Veer, who was the CEO of Shell at the time.

    The revelation comes at an awkward time for the foreign minister. Zijlstra, who took office in October 2017, is set to visit Moscow this week to meet with his Russian counterpart, Sergey Lavrov. Geert Wilders’ opposition right-wing Party for Freedom has called for a parliamentary debate about Zijlstra’s integrity before he leaves. Zijlstra told Volkskrant that he informed Prime Minister Mark Rutte about his conduct several weeks ago.

    “Greater Russia” is an amorphous term usually used to describe the historic core of the Russian state, roughly corresponding to the territory of medieval Russia in the 16th century – the beginning of the reign of Ivan the Terrible, who was the first of Russia’s great expansionist rulers. The word “greater” is meant as a description of spiritual significance rather than physical size. The same term was applied to the core territories of some other countries, like Greater Armenia, Greater Walachia or Greater Poland.

  • Free Speech And Social Engineering In The "Land Of The Free"

    Authored by Mac Slavo via SHTFplan.com,

    A disturbing trend has been going on for quite some time now, and that’s the destruction of free speech.  Many college campuses even have safe spaces now, where certain speech is banned so college students can snuggle blankets.

    Free speech is now the topic of several debates and they all revolve around social engineering/social tyranny. Take this article from The Week, for example.

    On many college campuses, groups of left-leaning students insist that free speech should be conditional on speakers adhering to explicit standards of diversity and avoiding the infliction of emotional harm on the members of marginalized groups through the spreading of “hate.”

    From the opposite ideological direction, President Trump believes that the government should “take a strong look” at libel laws to keep news organizations from subjecting his own administration to negative coverage.

    Finally, from the center-left come calls to use anti-discrimination law to punish organizations that oppose the legitimacy of same-sex marriage and accommodations for transgender people. If that happens — either by passing new laws that explicitly add to existing anti-discrimination statutes or by courts treating the members of these groups as protected classes covered by existing law — the result will almost certainly be a significant constriction of speech, as those holding more conservative views will face sanction for expressing them in public. –The Week

    The article asks the question: Is America Having Second Thoughts About Free Speech?  But Joe Joseph with The Daily Sheeple answers the question perfectly.

    “NO! America’s NOT having second thoughts about free speech. But the social engineers are cramming it down our throat like this is what we want.  But really, nobody wants it! It’s unfreakin’ believeable!”

    Joseph’s take reflects all those who are individual minded.  Even offensive speech is only offensive to the emotionally weak. “I can’t believe that we’re even having this conversation in the land of the FREE!!!! What the heck is going on…. are we in the “Twilight Zone”? When did we go from a nation of bad ass mo fo’s to a nation of pansies?” says the caption on Joseph’s latest news shot video.

    “How about we do this…how about these media organizations actually follow through with what their code of ethics say. How about they actually do what they say they’re gonna do! How about you practice the rules you’re taught day one in journalism school!” says Joseph about the media.

    He goes on to say laws dictating what speech is acceptable, and what type of speech is not acceptable, are not designed to fix the problem.  They are designed to divide the people and amplify the problems.

    There should never be a question of whether or not humans have free speech. It’s a natural right to think and say whatever you want.  Words don’t do physical damage, and until someone is hurt or their property is damaged, no crime has been committed.

  • Pentagon Sending Heavily Armed Marine Units To East Asia To "Counter China Threat"

    According to a recent report by the Wall Street Journal, the Pentagon is considering plans to transfer heavily armed, versatile Marine Corps Expeditionary Units (MEU) to East-Asia, citing the rapidly expanding Chinese influence in the region.

    After 16-years of military embarrassments in the Middle East, the Pentagon appears to have realized that its misfortunes in the area have transformed into nothing more than Vietnam 2.0; alternatively it is merely provoking Asian superpowers into a new race for military dominance in the region.

    Washington’s drive for regional militarization (and constant wars feeding the MIC) appears is shifting away from the Middle East and onto China and Russia’s playground. President Trump’s newly issued National Defense Strategy report highlights “our [Pentagon] competitive military advantage has been eroding” throughout the world, as it has now become a national security threat. Further, the report labels, the South China Sea and the Korean Peninsula, as areas of an “increasingly complex security environments,” which the Pentagon will start transferring military assets to the region, to combat the threat because it is jeopardizing the American empire.

    “Today, we are emerging from a period of strategic atrophy, aware that our competitive military advantage has been eroding. We are facing increased global disorder, characterized by decline in the long-standing rules-based international order—creating a security environment more complex and volatile than any we have experienced in recent memory. Inter-state strategic competition, not terrorism, is now the primary concern in U.S. national security.”

    “China is a strategic competitor using predatory economics to intimidate its neighbors while militarizing features in the South China Sea. Russia has violated the borders of nearby nations and pursues veto power over the economic, diplomatic, and security decisions of its neighbors. As well, North Korea’s outlaw actions and reckless rhetoric continue despite United Nation’s censure and sanctions.”

    The Wall Street Journal says the Pentagon intends to boost its military appearance in the East Pacific with the deployment of Marine Expeditionary Units. A Marine expeditionary unit (MEU, pronounced “Mew”), is a group of 2,200 marines who are part of the quick reaction force and are usually deployed to a region for an upcoming or immediate crisis. A unit deploys about 2,200 marines who operate amphibious assault ships, aircraft, helicopters, tanks, heavy weapons, and other military assets. Each MEU is equipped with:

    Officials said these shifts are “major muscle movements,” as the Pentagon transfers military equipment and personnel redeployments, and are aimed at “a global resetting of forces” rather than a “buildup for war.”

    “We have enduring interests here, and we have an enduring commitment and we have an enduring presence here,” Gen. Joe Dunford, chairman of the Pentagon’s Joint Chiefs of Staff, who spoke about America’s reshuffling of armed forces during an eight-day visit through Asia last week.

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    MEUs deploy in seven-month rotations on Tarawa-class amphibious assault ships operated by the United States Navy; they may stay offshore for the entire time of deployment or come ashore for small periods of time to conduct training exercises. General Robert Neller said MEUs sent to Asia would jump right into military patrols and joint activities with allies.

    “We have to be present and engaged to compete,” Gen. Neller said. The new defense strategy “will shape our future naval presence, especially in the Indo-Pacific region.”

    WSJ says MEUs have recently been deployed to various theaters in the Middle East but will be soon departing from their native ports on the West Coast of the United States to Asia.

    MEUs based on the West Coast have traveled from the U.S. to the Middle East for wars in Iraq, Afghanistan and most recently, Syria, all in the area of responsibility of U.S. Central Command. MEUs, designed to be a quick reaction force, were among the first units to arrive near northern Iraq in 2016 to set up for a campaign to free the city of Mosul from Islamic State.

    Pentagon officials said they hope their new strategy on East Asia will persuade Pacific nations to stand with the U.S. “I believe the [National Defense Strategy] and other guidance requires us to adopt a more global posture and this will shape our future naval presence, especially in the Indo-Pacific region,” said Gen. Neller.

    Kelly Magsamen, a former Pentagon and State Department policy official, said the new military strategy, when more fully implemented, will require careful diplomacy and a robust economic approach: “Follow through on strategy is essential, but so is close communication and coordination with our allies and friends,” said Ms. Magsamen, now vice president national security and international policy at the Center for American Progress.

    In keeping with the Pentagon’s party line, the WSJ warns that depleting military resources in the Middle East could enable Russia and China to “bolster their presence” in the region.

    Some officials argue that withdrawing resources from the Middle East could allow Russia and China to bolster their presence there. Russia backs Syria’s ruler and both countries are seeking to expand their influence elsewhere in the region.

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    Take Guam, an American territory in Micronesia in the Western Pacific, which has about 3,831 American soldiers on the island stationed at Anderson air force base. Last month, we reported, the B-1B Lancer bombers, the B-2 Spirit stealth bombers, and the B-52H Stratofortress bombers are now ‘temporarily’ stationed at Andersen Air Force Base. Nevertheless, the show of force wound down this month, when the B-1Bs return to Ellsworth Air Force Base in South Dakota.

    Curiously, the Pentagon’s military build-up in Asia comes as Pyongyang and Seoul are making some progress towards engaging in dialogue over North Korea’s reckless nuclear and rocket programs. Further, the United States is becoming increasingly worried about Beijing’s drive to militarize the heavily disputed artificially-created islands it controls in the South China Sea.

    America’s legacy of failed wars in the Middle East is quietly being swept under the carpet. The Pentagon is now vocally repositioning itself for the next boogeyman being Russia, China, and North Korea, as highlighted in the 2018 National Defense Strategy. It is likely that the Trump administration with the Pentagon will condition the American people through psychological operations, about how America’s competitive military advantage is eroding, and the need to transfer military assets to the Asia Pacific is critical for America’s survival. This alarming trend will continue for at least President Trump’s first term, and if he gets elected again, it will definitely persist until the next World War starts.

    Meanwhile, Beijing is preparing for the next global conflict with a new era of modernization of the country’s armed forces, the largest in the world, including AI-Enabled Nuclear Submarines, fifth-generation fighters, and hypersonic weapons.

  • A President Held Hostage?

    Authored by Justin Raimondo via Antiwar.com,

    They’ve got him surrounded…

    As Vice President Mike Pence made a fool both of himself, and the country he is supposed to be representing, at the Olympic Games by refusing to stand for the athletes of any nation other than the US, back at home the Washington Post was reporting on a President Trump who appears to have nothing in common either with Pence or with the White House staff. The piece, entitled “Trump’s favorite general: Can Mattis check an impulsive president and still retain his trust?” tells a story that pits a President inclined to challenge the War Party against a Praetorian Guard determined to nullify his electoral mandate to keep out of foreign wars and put “America first”:

    “Although Trump has given the military broad latitude on the battlefield, he also has raised pointed questions about the wisdom of the wars being fought by the United States. Last year, after a delegation of Iraqi leaders visited him in the Oval Office, Trump jokingly referred to them as ‘the most accomplished group of thieves he’d ever met,’ according to one former U.S. official.”

    Truer words were never spoken, but of course this leak is designed to embarrass Trump and put him at odds with those very thieves. Mattis was presumably horrified by this truism, since the General is an even bigger thief, having successfully manipulated Congress into appropriating 15.5 percent more money for the military than Trump asked. The Post piece goes on to detail the President’s many heresies:

    He has repeatedly pressed Mattis and McMaster in stark terms to explain why US troops are in Somalia. ‘Can’t we just pull out?’ he has asked, according to US officials.

    “Last summer, Trump was weighing plans to send more soldiers to Afghanistan and was contemplating the military’s request for more-aggressive measures to target Islamic State affiliates in North Africa. In a meeting with his top national security aides, the president grew frustrated. ‘You guys want me to send troops everywhere,’ Trump said, according to officials in the Situation Room meeting. ‘What’s the justification?’”

    Oh, the shocked silence in that room must have lasted for what seemed like forever. Then Mattis came up with the same old bullshit:

    “‘Sir, we’re doing it to prevent a bomb from going off in Times Square,’ Mattis replied.”

    Trump didn’t fall for it: “The response angered Trump, who insisted that Mattis could make the same argument about almost any country on the planet.” And the President wasn’t alone in his skepticism: “Attorney General Jeff Sessions echoed Trump’s concerns, asking whether winning was even possible in a place such as Afghanistan or Somalia.”

    Here’s the scary part, which concludes the piece:

    “It was Mattis who made the argument that would, for the moment at least, sway Trump to embrace the status quo – which has held for the past two presidents.

    “‘Unfortunately, sir, you have no choice,’ Mattis told Trump, according to officials. ‘You will be a wartime president.’”

    Really? Why is that? And which war is Mattis specifically referring to? Afghanistan? We’re largely out of Iraq. Syria – the latest addition to our interventionist folly? We aren’t told, but in my view it’s not any foreign war Mattis is referring to, but – perhaps unconsciously – he’s referencing the war at home, i.e. the one being conducted by his own government against the President of the United States.

    We read about it every day in the media: the Russia-gate hoax is still being flogged, despite growing evidence of its utter falsity. Robert Mueller is still on the prowl, looking for a pretext to take Trump down. The media, a longtime adjunct of the national security bureaucracy, is openly working in tandem with the intelligence services to take out Trump – and if you want to know why, just re-read the reporting on Trump’s reluctance to go along with the War Party’s murderous agenda.

    So once they take him down, who will be Trump’s replacement? It’ll be Mike Pence, of course, the same person doing everything in his power to destroy the possibility of peace on the Korean peninsula – quite against Trump’s expressed hope that “we can make a deal” with North Korea.

    The War Party cannot tolerate a President who questions the most basic premises of the American Empire: “You guys want me to send troops everywhere!” Of course they do. However, Trump was elected to carry out a very different mandate: to start putting America first. He railed against regime change. And now the regime-changers want to carry out a change of regime against him.

    Just look at the reporting by James Risen in The Intercept: the FBI/CIA/NSA cabal paid a Russian operative $100,000 as a down payment on a total of a million to get compromising material on Trump. Isn’t this kind of thing only supposed to happen in places like Tadjikistan? Oh, it was all done under the pretext of getting back our stolen cyber-war tools, but really – how valuable are they if the Russians already have them? Sure, we could find out what was stolen – we still don’t know – but the long involved process described by Risen is really about getting rid of Trump. That’s all they really care about right now, and they’ll stop at nothing – including, I believe, assassination – to pull it off.

    There’s too much money riding on the continued existence and expansion of our worldwide empire to let Trump ruin their scam. Too many careers are based on it, too much prestige is at stake, too many “allies” are dependent on the largesse it affords them. They’re boxing him in, despite his noninterventionist instincts, and they’re compiling “dossiers,” and they’re mobilizing all their forces for the final assault on the Oval Office. In an important sense, Trump is being held hostage: they have limited his policy options in every important sphere of the national security/foreign policy realm, The “swamp” Trump talks about is an international miasma, and swamp creatures of diverse nationalities are crawling out of the muck, their claws aimed straight for the presidential throat.

    The War Party plays for keeps. The question is: does Donald Trump? We shall see.

  • Prison Chaplain Fired By Muslim Boss, Says Inmates Converting To Islam For Protection

    A London prison chaplain claims he was fired from his job of 20 years by his Muslim boss, Mohammed Yusuf Ahmed, after he was accused of “extreme” Christian views that were deemed “too radical.”

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    Paul Song (left), Mohammed Yusuf Ahmed

    Paul Song, 48, now says that the “Christian faith is not equal” in South London’s Brixton prison, and that “some people have been forced to convert with violence,” adding “How do I know? Because three or four people came up to me to tell me. This is a very sensitive issue.” 

    One inmate who served time in Brixton in 2015 has come even come forward and offered a signed a statement declaring that prisoners were forced to convert to Islam.

    “There seems to be a very troubling lack of transparency and due process around the decision to expel this chaplaincy volunteer,” says Ian Acheson, who led an independent review of Islamist extremism within prisons which found significant concerns over “the operation of some prison chaplaincies in the London area and the risks of radicalization.”

    “That sort of arbitrary action is only defensible in the case of very serious allegations. So it is baffling why he has been told that he is free to operate in any other prison, just not Brixton.”

    Acheson added: “I made a number of recommendations after repeated concerns were raised about bullying and favoritism from imams in the field. In the light of these revelations, I would urge the new ministerial team to assure itself that the dismissal of this chaplain was fair and proportionate.”

     

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    Song, a former police officer in his native South Korea, says that his firing last August came on the heels of a false accusation from a Muslim inmate, who claims the chaplain referred to him as a “terrorist.” 

    Mr Song said his position at HMP Brixton came under scrutiny after Mohammed Yusuf Ahmed became managing chaplain in 2015. 

    He told the Sunday Express: ‘I never said those things. I would never make those comments. I have worked in the prisons for many years with many faiths and there were no complaints.  –Daily Mail

    Song claims his boss, Mr. Ahmed, said that he was set on changing the “Christian domination” within HMP Brixton, according to the Sunday Times. The Ministry of Justice said there was “no evidence or intelligence to support this.”

     

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    HMP Brixton

    We find this strange, as a 2016 report by the UK’s Ministry of Justice shows that while Muslims make up just one in 20 Britons, the religion accounts for one in seven inmates. One of those, the Daily Mail reports, is the case of Levi Bellfield, a convicted child rapist and murderer who converted to Islam for protection while in prison:

    At least that’s what Rahim — a man who will be familiar to most by his real name, Levi Bellfield — hoped would happen when he converted to the Muslim faith not long after being sentenced to life for the murder and rape of schoolgirl Milly Dowler.

    ‘He found out a paedophile had been slashed in Wakefield and thought he would be next: he was a marked man after he was convicted,’ revealed his sister Ann-Marie Bellfield. ‘He said they were good boys and would look after him … he got friendly with Islamic guys and didn’t have a problem.

    “These gangs use their faith as a cover for violence and intimidation, threatening non-Muslims and pressuring them to convert to Islam,” said Steve Gillan, general secretary of the Prison Officers Association. “I have got many prisoners who are so fearful of Muslims that they feel they need to form alliances with them for protection,’ one prison governor recently revealed.

    Former prison officer Joe Chapman who is now a prison law consultant thinks that so-called “convenience conversions” are on the rise. 

    ‘This job takes me to 40 or 50 prisons over the year, throughout the country,’ he said. ‘It has become obvious to me that it’s a growing problem.

    About half a dozen of my clients have directly reported problems with being forced to convert — those who weren’t Muslim when they came in, and those who were and have been forced to look at more radical ideas about their faith.’

    Meanwhile, Song’s treatment comes as the latest HM Chief Inspector of Prisons report on Brixton, published in March last year, stated that some Christian classes had been dropped because the prison had been “unable to recruit a full-time Anglican chaplain since 2015,” reports The Times

    The report said that there were eight Christian leaders, including a full time Catholic with the rest part time – as well as four Muslims, two of whom were full time. 

    Several prisoners wrote affidavits on Song’s behalf, describing how he helped them turn away from a life of crime. 

    To call this Christian who has served without a blemish for almost 20 years an extremist defies belief,” says Andrea Williams, CEO of the Christian Legal Center which has been advising for Song. 

    Perhaps Song can look to London’s Mayor, Sadiq Kahn for help – or maybe Song is just living in the wrong country to be a Christian prison chaplain these days. 

  • The Dollar – From Bohemia To Bust

    Authored by Egon von Greyerz via Gold Switzerland,

    Virtually no investor studies history and the few who do always think it is different today. The most important lesson is that people never learn. If they did, they wouldn’t be invested in a stock market that on any criteria is now at a bubble extreme. And they wouldn’t be invested in a global debt market which has grown exponentially in recent decades and which will become worthless in the next few years as debtors default. Nor would anyone hold paper money which is down 97-99% in the last 100 years and which is guaranteed to soon fall the final bit to take the value to zero.

    The history of money clearly illustrates that “Plus ça change, plus c’est la même chose” (the more it changes, the more it is the same thing). The most constant factor in the history of money is the cycle of boom and bust or euphoria and despair. Cycles are part of nature just like the change of seasons.

    But throughout history, mankind has always believed that they know better than previous generations and can eliminate the cycle of boom and bust. This is what the British prime minister Gordon Brown proudly declared before the economy collapsed in 2007. And the Nobel Prize winner in Economics, Paul Krugman, also believes that eternal prosperity can be generated by creating endless debt and printing unlimited money.

    But history has time and time again turned hubristic know-it-alls into humbled has-beens.

    FOR 6,000 YEARS GOLD HAS OUTLIVED ALL CURRENCIES

    Whenever mankind has deviated from sound money, the consequences have without fail been catastrophic. The only money which has survived since it first came into use around 6,000 years ago is gold. All other money has been destroyed by greed and economic mismanagement. I believe I have quoted Voltaire for over 20 years and will continue to do so: “Paper Money Eventually Returns to its Intrinsic Value – ZERO”. Whether we go back 100 years, 300 years or 2,000 years, those superb 9 words is the most exact and scientific definition of economic history. This is the most important lesson that any student of Economics should learn. Armed with that knowledge, anyone can forecast the likely outcome of an economic cycle and especially the current one.

    TULIP BULBS AND BITCOINS WILL NEVER PRESERVE WEALTH

    So why are investors not taking heed and protecting themselves against risks that on a global scale have never been greater. The first reason is greed. Whether it is stocks, tulip bulbs or bitcoins, people never learn. Greed takes over and numbs any rational thinking. And that is why most investors will ride the bubble markets until they are virtually worthless.

    Experience and a long professional life is a great advantage when it comes to understanding risk. Nothing beats personally experiencing major market crashes of 50% or more like in 1973, 1987, 2000 and 2007. This certainly makes you more aware of risk and therefore also the necessity to preserve wealth.

    STOCKS ALWAYS GO UP!

    Looking back at say the Dow since 1971, it is up 29x or 2,800 percent. So why worry because “stocks always go up”. Yes, it is absolutely true that in the last 47 odd years since Nixon took away the gold backing of the dollar, asset markets have boomed. But most of these gains have been illusory and due to credit expansion, money printing and currency debasement.

    So investors are still certain that stocks will continue to grow over time. But they don’t realise what will happen to their investments when the punchbowl is taken away and interest rates increase substantially. Because that is what we will see in the next few years. Stocks have been going up only because of credit expansion and artificially low interest rates. These two factors are unlikely to be in play in coming years. Yes, central banks will panic and print unlimited amounts of money but the market will soon realise that this money is worthless and therefore will have no effect.

    What investors don’t realise is that it can take a very long time for stocks to climb back up that high wall of worry after a big fall. In 1929 the Dow peaked at 481 and then fell 90% over less than three years to bottom at 40 in 1932. But what few investors realise is that it took 26 years before the Dow was back to the 1929 high.

    THE DOW TOOK 26 YEARS TO GET BACK TO 1929 PEAK

    The almost 1,000 points drop in the Dow last Monday was a foretaste of things to come. We might not see the end of the multi decade bull market quite yet but risk is today colossal. Once the bear market starts, the Dow will experience days of several thousand points decline.

    The 1929 crash was 90% but since the current bubble is so much greater by any measure, the coming fall of US stock markets is likely to be at least 95%.

    NIKKEI STILL 40% BELOW 1989 PEAK

    A more recent example of a stock market not recovering is the Nikkei which topped at 39,000 in 1989. Today, 29 years later the Nikkei is still 40% below that level after having been down as much as 80% from the high. In spite of massive money printing with debt well over Yen 1 quadrillion and zero or negative interest rates for most of the last 29 years, the Japanese stock market is still in the doldrums. The most likely outcome for Japan is that the economy will collapse with stocks going down 95% or more with the value of debt going to zero followed by the Yen which will also go to zero.

    THE DOLLAR HAS BEEN FALLING FOR HALF A CENTURY

    Looking at the dollar since 1971, it has lost 78% against the Swiss franc and 56% against the DMark/Euro.

    If we measure against real money – gold – the dollar has lost 98% in the last 100 years. Most of that fall took place after Nixon’s fatal decision in 1971.

    PAPER MONEY – FROM 100 TO ZERO IN ONE CENTURY

    It is clear that the dollar will lose the additional 3% against gold to make it reach ZERO intrinsic value. But we must remember that this means the dollar will fall 100% from current level. And that fall is virtually guaranteed. It is only a question of how long it will take. The biggest part of the dollar decline could happen very rapidly, within 3 to 7 years. At the same time US debt will go to zero and interest rates will reach infinity.

    THE DOLLAR – FROM BOHEMIA TO OBSCURITY

    Interestingly, the word dollar came from the Czech Kingdom of Bohemia where silver coins were minted in the early 1500s.

    The area was called Joachimsthal (Joachim’s valley) and the money Joachimsthaler shortened to Thaler or Daler (Dollar). This word for money was used in many countries in the world. It came to America as the Spanish American Peso which became the Spanish dollar. In 1785 it was adopted in the US as the official currency – the American dollar. When the US dollar collapses in coming years, it will be interesting to see how long it will take for the dollar to totally disappear just as the Denarius did when the Roman Empire collapsed.

    THE DENARIUS – FROM SILVER TO DUST

    The silver coin Denarius was first minted in 211 BC.

    As the finances of the Roman Empire deteriorated, the Denarius was gradually debased. During the 100 year period, 180 to 280 AD the silver content of the Denarius went from 87% to 0%. This is exactly what is happening to the currency system today with all major currencies down 97-99% measured in nature’s money – Gold. But we still have the final 1-3% to come which will be extremely painful for the world.

    WORLD ECONOMY – FROM EUPHORIA TO DYSPHORIA

    We are now in the final phase of manic euphoria. Within the next 6 to 18 months the euphoria will turn into dysphoria as 100 years of economic mismanagement and manipulation come to an end. It will not only severely affect financial markets and the world economy but also the fabric of society in most countries. I have talked about this many times and it certainly is a depressing scenario. The world is likely to experience very high unemployment, no or little money for most people, disease, famine, no social security, no pension, little medical care, social unrest, wars etc.

    No one, absolutely no one, can prepare fully for this or avoid it. We will all suffer. As I have stressed many times, the circle of family and friends is the best protection and more important than anything else. For the few who are privileged to have savings, it is still not too late to acquire some physical gold and silver. As the financial system crashes, precious metals will resume their role as money. Not only will gold and silver become extremely valuable and desired, but more importantly, it will maintain purchasing power as it has for 6,000 years.

    Investors must not be influenced by short term fluctuations in the gold and silver price. Without warning gold will one day start moving up 100s of dollars and silver 10s of dollars over a very short period. Gold and silver must be acquired today at current low prices. When the real move starts, it will be impossible to get hold of physical gold and silver at any price.

  • Comey: FBI Agents (Including Peter Strzok) Didn't Think Flynn Lied

    FBI investigators who interviewed Michael Flynn last January – one of which was anti-Trumper Peter Strzokthought Flynn was telling the truth about his conversations with Russian ambassador Sergey Kislyak, and that any inaccuracies in his answers were unintentional – according to accounts of a closed-door March 2017 briefing given to lawmakers by former FBI Director James Comey.

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    According to two sources familiar with the meetings, Comey told lawmakers that the FBI agents who interviewed Flynn did not believe that Flynn had lied to them, or that any inaccuracies in his answers were intentional. As a result, some of those in attendance came away with the impression that Flynn would not be charged with a crime pertaining to the January 24 interview. –Washington Examiner

    This new revelation from the closed-door briefing held nearly a year ago (apparently leaks which benefit conservatives take much longer), complicates an already murky case considering that Flynn pleaded guilty nine months later to one count of making a false statement to the FBI.

    To briefly review; Flynn and Russian Ambassador Sergey Kislyak had a phone conversation in late December, 2016. On its face, there was absolutely nothing wrong with an incoming National Security Advisor having a conversation with a Russian government official. Following the conversation, which was surveilled by the Obama administration and then leaked to the press

    The first thing to remember is that it appears Flynn did nothing wrong in having those talks. As the incoming national security adviser, it was entirely reasonable that he discuss policy with representatives of other governments and Flynn was getting calls from all around the world. –Washington Examiner

    What happened next is strange; on January 12, WaPo columnist and deep-state news conduit David Ignatius reported that Flynn and Kislyak had talked – implying some type of malfeasance. Days later, on January 15, Vice President-elect Mike Pence denied that Flynn had discussed sanctions with the Russian ambassador. The on January 24, Obama holdover and acting Attorney General Sally Yates sent two FBI agents to interview Flynn without a lawyer present.  

    Two days later, on January 26, Yates and a colleague visited the White House to tell White House counsel Don McGahn that Flynn may have violated the obscure logan act, and in fact discussed sanctions with Kislyak – possibly subjecting Flynn to blackmail.

    Yates then explained to McGahn her theory that Flynn might be vulnerable to blackmail. The idea was that Flynn had discussed sanctions with Kislyak, which of course the Russians knew. And then if Flynn lied to Pence, and Pence made a public statement based on what Flynn had told him, then the Russians might be able to blackmail Flynn because they, the Russians, knew Flynn had not told the vice president the truth. –Washington Examiner

    Meanwhile, on January 23, the Washington Post reported that they had “not found any evidence of wrongdoing or illicit ties to the Russian government,” after having reviewed the leaked conversation

    Even stranger is the fact that Flynn’s sentencing has been delayed at the request of Special Counsel Robert Mueller, with an agreement to revisit the matter no later than May 1, 2018. 

    Due to the status of the Special Counsel s investigation, the parties do not believe that this matter is ready to be scheduled for a sentencing hearing at this time, the document, signed by Mueller and Flynn attorneys Robert Kelner and Stephen Anthony, said. 

    Some have speculated that Mueller’s request indicates Flynn is cooperating with his investigation. Others, such as former federal prosecutor Joe diGenova, think that “It may very well be that the guilty plea cannot stand” after D.C. Judge Rudolph Contreras – who also sits on the FISA court – recused himself days after he was assigned Flynn’s case.

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    Judge Rudolph Contreras

    Others yet have speculated that the FBI conducted an illegal interview of Flynn by not announcing that he was actually under investigation, and did not have an attorney present (which Byron York notes Flynn should have known to do). 

    On January 27, 2017, Flynn resigned. 

    So – if FBI agent Peter Strzok didn’t think Flynn had lied, and the Washington Post – which reviewed a conversation (leaked by the Obama administration) concluded that Flynn did nothing wrong, then why did Flynn apparently lie to Mike Pence? 

    Is it possible that Flynn told Pence the truth and Pence lied due to the optics of the ongoing Trump-Russia “witch hunt” that was kicking into high gear? 

    Whatever the case, the Flynn story is now murkier than ever…

  • Ron Paul Warns 'E-Verify' Threatens Us All

    Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

    In addition to funding for a border wall and other border security measures, immigration hardliners are sure to push to include mandatory E-Verify in any immigration legislation considered by Congress.

    E-Verify is a (currently) voluntary program where businesses check job applicants’ Social Security numbers and other Information — potentially including “biometric” identifiers like fingerprints — against information stored in a federal database to determine if the job applicants are legally in the United States.

    Imagine how much time would be diverted from serving consumers and growing the economy if every US business had to comply with E-Verify. Also, collecting the relevant information and operating the mandatory E-Verify system will prove costly to taxpayers.

    Millions of Americans could be denied jobs because E-Verify mistakenly identifies them as illegal immigrants. These Americans would be forced to go through a costly and time-consuming process to force the government to correct its mistake. It is doubtful employers could afford to keep jobs open while potential hires went through this process.

    A federal database with Social Security numbers and other identifying information is an identify thief’s dream. Given the federal government’s poor track record for protecting personal information, is there any doubt mandatory E-Verify would put millions of Americans at risk for identity theft?

    Some supporters of E-Verify deny the program poses any threat to civil liberties, as it will only be used to verify citizenship or legal residency. They even claim a system forcing individuals to have their identities certified by the government is not a national ID system. These individuals are ignoring the history of government programs sold as only affecting a particular group or being used for a limited purpose being expanded beyond initial targets. For example, Americans were promised that only the wealthiest Americans would ever pay income taxes. And some of the PATRIOT Act’s worst provisions that we were told would only be used against terrorists are routinely used to investigate drug crimes.

    E-Verify almost certainly will be used for purposes unrelated to immigration. One potential use of E-Verify is to limit the job prospects of anyone whose lifestyle displeases the government. This could include those accused of failing to pay their fair share in taxes, those who homeschool or do not vaccinate their children, or those who own firearms.

    Unscrupulous government officials could use E-Verify against those who practice antiwar, anti-tax, anti-surveillance, and anti-Federal Reserve activism. Those who consider this unlikely should remember the long history of the IRS targeting the political enemies of those in power and the use of anti-terrorism laws to harass antiwar activists. They should also consider the current moves to outlaw certain types of “politically incorrect” speech, such as disputing the alleged “consensus” regarding climate change.

    Claiming that mandatory E-Verify is necessary to stop illegal immigration does not make it constitutional. Furthermore, having to ask the federal government for permission before obtaining a job is a characteristic of authoritarian societies, not free ones. History shows that mandatory E-Verify’s use will expand beyond immigration enforcement and could be used as a tool of political repression. All those who value liberty should oppose mandatory E-Verify.

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Today’s News 12th February 2018

  • Intel's New "Smart Glasses" Shoot Laser Beam Directly Into Your Retina

    For anyone who wanted a pair of Google glasses but didn’t want to look like a lazy Borg cosplay, Intel may have just what you need. Just one catch; you have to be OK with a laser firing photons directly into your retina. 

    Consummate techie and Executive Editor at The VergeDeiter Bohn, took Intel’s Vaunt smart glasses for a test drive – which he says are “virtually indistinguishable from regular glasses,” and are the “first pair of smart eyeglasses I’ve tried that doesn’t look ridiculous.”

    The smart glasses – which weigh less than 50 grams – work by projecting a very low-powered laser (a VCSEL), which shines a “red, monochrome image somewhere in the neighborhood of 400 x 150 pixels” on to a holographic reflector on the right lens of the glasses – which is then reflected directly into your eyeball and onto your retina.

    Intel swears it’s safe. 

     “It is a class one laser. It’s such low power that we don’t [need it certified],” he says, “and in the case of [Vaunt], it is so low-power that it’s at the very bottom end of a class one laser.” –Mark Eastwood, Director of Industrial Design, Intel NDG group

    We use a holographic grading embedded into the lens to reflect the correct wavelengths back to your eye. The image is called retinal projection, so the image is actually ‘painted’ into the back of your retina,” says Jerry Bautista, the team lead for wearable devices at Intel’s NDG. Due to the fact that the glasses project images directly onto the retina, the projected image is in focus on both prescription and non-prescription lenses. 

    In addition to the micro-electro-mechanical (MEMS, or “Pico”) projector, the glasses also pack hardware and software for Bluetooth communication with your phone, as well as an accelerometer and a compass. Future models may even include a microphone for use with virtual assistants such as Alexa and Siri.

    And of this, along with batteries, are contained within a remarkably compact chassis. 

    Requiring a custom fitting to each user, the glasses project a stream of information on what Bohn says looks like a screen, delivering a wide variety of information:

    At its core, Vaunt is simply a system for displaying a small heads-up style display in your peripheral vision. It can show you simple messages like directions or notifications. It works over Bluetooth with either an Android phone or an iPhone much in the same way your smartwatch does, taking commands from an app that runs in the background to control it.

    When looking down, the Vaunt glasses project a “rectangle of red text and icons down in the lower right of your visual field,” however, when the wearer is not glancing down in that direction, the display shuts off – as it was designed to be “nonintrusive,” according to Bohn. 

    ”We didn’t want the notification to appear directly in your line of sight,” says Eastwood. “We have it about 15 degrees below your relaxed line of sight. … An LED display that’s always in your peripheral vision is too invasive. … this little flickering light. The beauty of this system is that if you choose not to look at it, it disappears. It is truly gone.” –The Verge

     

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    Bohn says he adapted to the glasses very quickly – writing that it became “natural within less than an hour to glance over at it to make it appear, or ignore it and focus on the person I was speaking with.” 

    Or, as it turns out, not focus on the person you’re speaking with:

    So I’m talking to you right now and you feel like you mean so much,” says Ronen Soffer, general manager for software products at NDG, “but I’m actually playing a trivia game right now.” (He wasn’t actually doing that, to be clear.) But after a day of playing around with the Vaunt prototypes, I completely believe that sort of thing is not just possible soon, but probably inevitable. Intel is thinking about those implications, too. Soffer wryly jokes: “You can ignore people more efficiently that way.”

    While it was unclear how users might interact with the Vaunt glasses, some have suggested that voice recognition, head gestures or both could activate it – or one could “trust the AI to show you what you need to know in the moment,” perhaps things such as nearby gas stations if you’ve failed to notice that your fuel light has been on for the last 12 miles. 

    Imagine walking down the street, looking at a shop or a restaurant, and instantly checking out Yelp reviews. Or perhaps the system could be used to project player stats in real time while at a sporting event. Whatever the case, Intel’s Brian Soffer says the company’s AI might just know exactly what you need to see. 

    “Listen, sometimes a better way to succeed is to make the problem smaller,” says Soffer. Intel’s AI for figuring out what to show you is “focused on certain types of moments, and we’ve been developing this technology for five or six years now to focus on those wearable, out-and-about moments.”

    Developing the platform

    Intel will be launching an “early access program” later this year so that developers can begin to tinker with the Vaunt system – developing apps for both phones and the glasses themselves. 

    The Verge‘s Bohn speculates that apps may directly stream content to the Vaunt glasses from the cloud, presumably to minimize on-board processing requirements – similar to how a Google Cast-enabled TV works as an endpoint for streaming video. When asked if this was the plan, Intel said “we’ll talk about that at a later date,” adding that “it really is built as an open platform … built from the ground up to be a mobile platform that accesses the internet. And a wearable device gets really powerful when it changes the way you access the internet.”

    While it’s unclear if Intel will bring the Vaunt glasses to market or find a partner to bring them to retail, The Verge notes that Intel is reportedly looking to sell a majority stake in its augmented reality business, according to Bloomberg

    Intel has a reputation for showing off ideas that never turn into real products. It comes up with a cool concept, proves out the technology, then hopes to convince others to take that idea and turn it into a real product. CEO Brian Krzanich comes on a CES stage, talks about a charging bowl (or hey, smart eyeglasses!), and then we wait to see if they’ll come to market. Often (maybe even usually), they don’t.

    I think the intention with Vaunt is a little different from Intel’s usual playbook. For one thing, Bloomberg’s report confirms that Intel is looking for partners with “strong sales channels … rather than financial backers.” For another, Bautista and I spoke a bit about how the sales channels for eyeglasses work now back in December.

    ”There’s something on the order of 2.5 billion people that require corrective lenses,” he says. “They get their glasses from somewhere. Sixty percent of them come from eye care providers. … We would say these glasses belong in those kinds of channels. People are going to buy them like they buy their glasses today.” The Verge

    While the Vaunt glasses are lighter, better looking, and possibly have a longer battery life than other smart glasses such as Magic Leap or HoloLens, they also project less information to the user. That said, as Bohn notes, the Vaunt is the “first pair of smart eyeglasses I’ve tried that doesn’t look ridiculous.” 

    Now let’s see what developers can do to make them rock and roll. Someday we’ll be telling our grandchildren about the days before laser beams were projected into our retinas. Hopefully we won’t be blind in one eye. 

  • 'Russiagate' Delusion Dies – Who Is 'Bill' Priestap?

    Via TheConservativeTreehouse.com,

    The game is over. The jig is up. Victory is certain… the trench was ignited… the enemy funneled themselves into the valley… all bait was taken… everything from here on out is simply mopping up the details.  All suspicions confirmed.

    Why has Devin Nunes been so confident?  Why did all GOP HPSCI members happily allow the Democrats to create a 10-page narrative?  All questions are answered.

    Fughettaboudit.

    House Permanent Select Committee on Intelligence member Chris Stewart appeared on Fox News with Judge Jeanine Pirro, and didn’t want to “make news” or spill the beans, but the unstated, between-the-lines, discussion was as subtle as a brick through a window.  Judge Jeannie has been on the cusp of this for a few weeks.

    Listen carefully around 2:30, Judge Jeanine hits the bulls-eye; and listen to how Chris Stewart talks about not wanting to make news and is unsure what he can say on this…

    …Bill Priestap is cooperating.

    When you understand how central E.W. “Bill” Priestap was to the entire 2016/2017 ‘Russian Conspiracy Operation‘, the absence of his name, amid all others, created a curiosity.  I wrote a twitter thread about him last year and wrote about him extensively, because it seemed unfathomable his name has not been a part of any of the recent story-lines.

    E.W. “Bill” Priestap is the head of the FBI Counterintelligence operation.  He was FBI Agent Peter Strozk’s direct boss.  If anyone in congress really wanted to know if the FBI paid for the Christopher Steele Dossier, Bill Priestap is the guy who would know everything about everything.

    FBI Asst. Director in charge of Counterintelligence Bill Priestap was the immediate supervisor of FBI Counterintelligence Deputy Peter Strzok.

    Bill Priestap is #1. Before getting demoted Peter Strzok was #2.

    The investigation into candidate Donald Trump was a counterintelligence operation. That operation began in July 2016. Bill Priestap would have been in charge of that, along with all other, FBI counterintelligence operations.

    FBI Deputy Peter Strzok was specifically in charge of the Trump counterintel op. However, Strzok would be reporting to Bill Priestap on every detail and couldn’t (according to structure anyway) make a move without Priestap approval.

    On March 20th 2017 congressional testimony, James Comey was asked why the FBI Director did not inform congressional oversight about the counterintelligence operation that began in July 2016.

    FBI Director Comey said he did not tell congressional oversight he was investigating presidential candidate Donald Trump because the Director of Counterintelligence suggested he not do so. *Very important detail.*

    I cannot emphasize this enough. *VERY* important detail. Again, notice how Comey doesn’t use Priestap’s actual name, but refers to his position and title. Again, watch [Prompted]

    FBI Director James Comey was caught entirely off guard by that first three minutes of that questioning. He simply didn’t anticipate it.

    Oversight protocol requires the FBI Director to tell the congressional intelligence “Gang of Eight” of any counterintelligence operations. The Go8 has oversight into these ops at the highest level of classification.  In July 2016 the time the operation began, oversight was the responsibility of this group, the Gang of Eight:

    Obviously, based on what we have learned since March 2017, and what has surfaced recently, we can all see why the FBI would want to keep it hidden that they were running a counterintelligence operation against a presidential candidate.   After all, as FBI Agent Peter Strzok said it in his text messages, it was an “insurance policy”.

    REMINDER – FBI Agent Strzok to FBI Attorney Page:

    “I want to believe the path you threw out for consideration in Andy’s office that there’s no way he gets elected – but I’m afraid we can’t take that risk. It’s like an insurance policy in the unlikely event you die before you’re 40.”

    So there we have FBI Director James Comey telling congress on March 20th, 2017, that the reason he didn’t inform the statutory oversight “Gang of Eight” was because Bill Priestap (Director of Counterintelligence) recommended he didn’t do it.

    Apparently, according to Comey, Bill Priestap carries a great deal of influence if he could get his boss to NOT perform a statutory obligation simply by recommending he doesn’t do it.

    Then again, Comey’s blame-casting there is really called creating a “fall guy”.  FBI Director James Comey was ducking responsibility in March 2017 by blaming FBI Director of Counterintelligence Bill Priestap for not informing congress of the operation that began in July 2016. (9 months prior).

    At that moment, that very specific moment during that March 20th hearing, anyone who watches these hearings closely could see FBI Director James Comey was attempting to create his own exit from being ensnared in the consequences from the wiretapping and surveillance operation of candidate Trump, President-elect Trump, and eventually President Donald Trump.

    In essence, Bill Priestap was James Comey’s fall guy.  We knew it at the time that Bill Priestap would likely see this the same way.  The guy would have too much to lose by allowing James Comey to set him up.

    Immediately there was motive for Bill Priestap to flip and become the primary source to reveal the hidden machinations.  Why should he take the fall for the operation when there were multiple people around the upper-levels of leadership who carried out the operation.

    Our suspicions were continually confirmed because there was NO MENTION of Bill Priestap in any future revelations of the scheme team, despite his centrality to all of it.

    Bill Priestap would have needed to authorize Peter Strzok to engage with Christopher Steele over the “Russian Dosssier”; Bill Priestap would have needed to approve of the underlying investigative process used for both FISA applications (June 2016, and Oct 21st 2016). Bill Priestap would be the person to approve of arranging, paying, or reimbursing, Christopher Steele for the Russian Dossier used in their counterintelligence operation and subsequent FISA application.

    Without Bill Priestap involved, approvals, etc. the entire Russian/Trump Counterintelligence operation just doesn’t happen. Heck, James Comey’s own March 20th testimony in that regard is concrete evidence of Priestap’s importance.

    Everyone around Bill Priestap, above and below, were caught inside the investigative net.

    Above him: James Comey, Andrew McCabe and James Baker. 

    Below him: Peter Strzok, Lisa Page, Jim Rybicki, Trisha Beth Anderson and Mike Kortan. 

    Parallel to Priestap in main justice his peer John P Carlin resigned, Sally Yates fired, Mary McCord quit, Bruce Ohr was busted twice, and most recently Dave Laufman resigned.  All of them caught in the investigative net…. Only Bill Priestap remained, quietly invisible – still in position.

    The reason was obvious.

    Likely Bill Priestap made the decision after James Comey’s testimony on March 20th, 2017, when he realized what was coming.  Priestap is well-off financially; he has too much to lose.  He and his wife, Sabina Menschel, live a comfortable life in a $3.8 million DC home; she comes from a family of money.

    While ideologically Bill and Sabina are aligned with Clinton support, and their circle of family and friends likely lean toward more liberal friends; no-one in his position would willingly allow themselves to be the scape-goat for the unlawful action that was happening around them.

    Bill Priestap had too much to lose… and for what?

    With all of that in mind, there is essentially no-way the participating members inside the small group can escape their accountability with Mr. Bill Priestap cooperating with the investigative authorities.

    Now it all makes sense.  Devin Nunes interviewed Bill Priestap and Jim Rybicki prior to putting the memo process into place.  Rybicki quit, Priestap went back to work.

    (page 5 pdf)

    Bill Priestap remains the Asst. FBI Director in charge of counterintelligence operations.

    It’s over.

    I don’t want to see this guy, or his family, compromised.  This is probably the last I am ever going to write about him unless it’s in the media bloodstream. I can’t fathom the gauntlet of hatred and threats he is likely to face from the media and his former political social network if they recognize what’s going on.  BP is Deep-Throat x infinity… nuf said.

    The rest of this entire enterprise is just joyfully dragging out the timing of the investigative releases in order to inflict maximum political pain upon the party of those who will attempt to excuse the inexcusable.

    Then comes the OIG Horowitz report.

    Then the grand jury empaneled (if not already); and while Democrats attempt to win seats in the 2018 election, arrests and indictments will hit daily headlines.

    Oh, lordy…

  • L.L. Bean Eliminates Lifetime Return Policy After Abuses

    Freeport, Maine bootmaker L.L. Bean is getting rid of its no-questions-asked lifetime return policy, thanks to growing abuse of the generous program, says the company.

    All returns must now be made within one-year of purchase, executives announced on Friday, adding that the policy, which has been in effect for over a century, was never meant to be used as an unlimited replacement scheme. 

    “Increasingly, a small, but growing number of customers has been interpreting our guarantee well beyond its original intent,” said L.L. Bean chairman Shawn Gorman in Friday a letter. “Some view it as a lifetime product replacement program, expecting refunds for heavily worn products used over many years. Others seek refunds for products that have been purchased through third parties, such as at yard sales.”

    Gorman says the policy should only affect a small percentage of returns, and that if a customer finds a product to be defective after one year, the company will make efforts to reach a “fair solution,” he said.

    “We stand behind all our products and are confident that they will perform as designed,” states the new return policy on the L.L. bean website. “After one year, we will consider any items for return that are defective due to materials or craftsmanship.”

    That said, customers who are known for “past habitual abuse” of the return policy can take their broken boots and pound sand, as they will not be allowed to return or exchange products even within one year of purchase, according to the site. 

    To protect all our customers and make sure that we handle every return or exchange with reasonable fairness, we cannot accept a return or exchange (even within one year of purchase) in certain situations, including:

    • Products damaged by misuse, abuse, improper care or negligence, or accidents (including pet damage)

    • Products showing excessive wear and tear

    • Products lost or damaged due to fire, flood, or natural disaster

    • Products with a missing label or label that has been defaced

    • Products returned for personal reasons unrelated to product performance or satisfaction

    • Products that have been soiled or contaminated, until they have been properly cleaned

    • Returns on ammunition, either in our stores or through the mail

    On rare occasions, past habitual abuse of our Returns Agreement

    Slate author Justin Peters is exactly the type of person responsible for the crackdown. In a Friday article, Peters brags about having ripped off L.L. Bean for the past six years – often bringing his mother along for what she called his “scam.” 

    “I needed new shoes, and so I went to L.L. Bean to buy a new pair of the same ones that had served me well for a year. Imagine my surprise and delight when the sales associate told me of the store’s generous return policy and invited me to exchange my old shoes for new ones, free of charge. What’s more, I also got a $10 gift card because of an in-store promotion of some sort. Not only did I get free shoes, I also got free money. Six years later, I still count this as one of the greatest days of my life.

    I haven’t spent a dollar on closed-toe shoes since then. Every year, around Christmas, I would drive to the L.L. Bean store in the Old Orchard Mall in Skokie, Illinois, near where I grew up, to exchange my old shoes for new ones.  Over the years, it became a cherished family outing. My mother, who is amused by my sense of thrift, insists on accompanying me on what she refers to as my “scam.” “You’d better not tell anyone about your scam,” she routinely warned me. “If too many people catch on, they’ll stop doing it.”

    I feel no guilt about taking L.L. Bean up on its offer. If they didn’t want people to take the swap, they shouldn’t have offered it!”  –Justin Peters

    Thanks Justin, good to know you’ll abuse an honor-based policy at the drop of a hat instead of paying for yourself like a responsible adult. 

    You too Meagan:

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  • "Make Sports, Not War"

    Authored by Eric Margolis via LewRockwell.com,

    Considering that a nuclear conflict over North Korea appeared imminent in recent weeks, the winter Olympics at Pyeongchang, South Korea, is a most welcome distraction – and might even deter a major war on the peninsula.

    The highlight of the games was the arrival of Kim Yo-jong, the younger sister of North Korea’s ruler, Kim Jong-un. This was the first time a member of North Korea’s ruling Kim dynasty had come to South Korea. Her handshake with South Korea’s president, Moon Jae-in was a historic and welcome moment.

    So too the planned joint marches by North and South Korean athletes under a new reunification flag.  For all Koreans, this was a deeply emotional and inspiring ceremony.

    But not for US Vice President Mike Pence, who was sent by Trump to give the Olympics the evil eye.  He even refused to stand for the joint marchers in a surly act that spoke volumes about his role.  Whether he meets President Moon or Kim Yo-jong remains to be seen. Even a cup of tea between Pence and Kim could end all the crazy talk about nuclear war. Does anyone in Washington know that North Korea lies between China and Russia?

    All this drama is happening as the Trump White House is advocating giving North Korea a `bloody nose.’  Meaning a massive bombing campaign that could very likely include nuclear weapons.  Trump, who received a reported five exemptions from military service because of a little bone spur in his foot, revels in military affairs and thinks a ‘bloody nose’ will warn Kim Jong-un to be good. Trump is planning a big military parade at which he will take the salute.

    This writer went through US Army basic and advanced infantry training with a broken bone in my foot, and has no sympathy with the president’s militaristic pretensions.

    South Korea’s able president Moon is moving heaven and earth to prevent a war in which his nation would be the main victim. 

    Some 2-3 million Korean civilians died in the 1950-53 Korean War.  All North Korea and much of South Korea were bombed flat by US air power.  Now, as tensions surge, US heavy bombers and nuclear weapons ring North Korea, ready to flatten the north and make the rubble bounce.

    North Korea’s thousands of heavy guns dug into mountains just north of the DMZ (I’ve seen them) could flatten all of South Korea’s capitol, Seoul, north of the Han River, killing millions, not counting nukes and poison gas.  South Korea, the world’s eleventh industrial power, would again pay the terrible price for a new war on the peninsula.

    One of VP Pence’s main missions is to whip up support among rightwing South Koreans who bitterly oppose any peace deal between the two Koreas and support attacking the north.  Many on South Korea’s hard right are evangelical Christians.  It’s no coincidence that Mike Pence, an ardent fundamentalist Protestant, was sent to show the flag and rally opposition to any détente with North Korea.  Whatever happened to ‘turn the other cheek?’

    Washington does not want a lessening of tensions between the two Koreas.  And much less, talk of potential reunification.  If the two Koreas came to peace, what justification would the US have for keeping powerful air, land and naval forces in strategic South Korea, often called ‘America’s unsinkable aircraft carrier.’  Japan is no more favorable to a united Korea.

    South Korean President Moon has been calling for a new, positive era in north-south relations. He has been adamant in opposing any chance of war on the peninsula.  But Washington has simply ignored Moon or brushed aside his objections to threats of war against North Korea.  The North Koreans routinely accused the south of being ‘American puppets.’  Pyongyang is the only ‘legitimate, truly independent Korean government,’ charges the north.

    Interestingly, in the event of war, South Korea’s 655,000-man active armed forces and 4 million-man reserves come under the command of a four-star US general.  US nuclear weapons can be moved through South Korean bases.  The so-called joint US-South Korea joint command is mere window dressing.

    It’s hard to say how close the US was to attacking North Korea.  Trump certainly backed himself into a corner by all his foolish threats to unleash ‘fire and fury’ on North Korea. 

    The Olympics delayed the rush to war against North Korea. But once they are over, the war drums will resume beating.

    President Trump is probably thinking about a dandy parade after a short, devastating attack on North Korea – provided, of course, that the troublesome northerners don’t manage to retaliate by landing a few nuclear warheads on Japan and Washington.

  • Treasury Yields Jump After Trump Budget Director Admits Interest Rates May "Spike" On Soaring Deficit

    In a bizarre warning coming from president Trump’s own budget director, one that could accelerate the sharp market selloff which so infurated Trump last week he tweeted about it on several occasions, lashing out against those who sell stocks on “good news” claiming it is a “big mistake“, Mick Mulvaney warned that the U.S. will post a larger budget deficit this year and could see a “spike” in interest rates as a result.


    White House budget director Mick Mulvaney.

    Of course, traders have already experienced the spike, or at least a part of it: it’s one of the key catalysts that moved the 10Y from 2.60% to 2.90% since payrolls Friday (coupled with the inflationary impulse from the jump in hourly wages).

    Earlier in the day, Mulvaney spoke on “Fox News Sunday,” a day before the White House is expected to release 2019 spending proposals – and after weeks in which financial markets have been spooked by prospects for rising inflation tied to higher deficits and lower taxes.

    “This is not a fiscal stimulus; it’s not a sugar high,” Mulvaney said on of the president’s economic program, including the $1.5 trillion tax cut passed in late 2017. “If we can keep the economy humming and generate more money for you and me and for everybody else, then government takes in more money and that’s how we hope to be able to keep the debt under control,” Mulvaney said.

    In a separate interview on CBS News’s “Face the Nation,” Mulvaney said rising budget deficits are “a very dangerous idea, but it’s the world we live in.”

    As Bloomberg notes, his comment echoed Trump’s Feb. 9 tweet that Republicans “were forced to increase spending on things we do not like or want” to secure Democratic votes for the sharp buildup in military spending wanted by the White House and the Pentagon.

    “What they said was they would not give us a single additional dollar for defense unless we gave them dollars for social programs,” he said. “They held the Defense Department hostage, and we had to pay that ransom.”

    Shockingly, Mulvaney also acknowledged he would “probably not” have voted for the deal when he served in the House of Representatives and was known as a fiscal hawk. “Keep in mind I’m not Congressman Mick Mulvaney anymore,” he said. “My job as the director of the Office of Management Budget is to try to get the President’s agenda passed.”   

    * * *

    The next set of numbers – and potential catalyst for further rate upside – will be unveiled on Monday, when Mulvaney’s OMB will updating the 2018 budget released last year and its 2019 request, due Monday, in response to the two-year budget deal the president signed into law on Friday morning. That agreement, which ended an hours-long partial government shutdown, will boost government spending by another $300 billion, which will have to be directly funded with more debt. Mulvaney said that in his previous job as a fiscally-conservative congressman representing South Carolina, he would “probably not” have voted for the bill.

    The additional spending could increase the deficit to about $1.2 trillion in 2019, and there’s a risk that interest rates “will spike” as a result, Mulvaney said.

    And while Mulvaney said that lower deficits are possible over time based on sustained economic growth, in an even more bizarre development, the WaPo reported that Trump’s Budget to be unveiled tomorrow won’t project a balance in 10 years, and instead Trump’s request will abandon the long-held Republican goal of eliminating deficit in budget projections, even over a decade.

    In other words, those concerned that yields may spike further tomorrow – and slam stocks – have good reason: the OMB may unveil the first republican non-balancing budget. Actually, one look at the 30Y Treasury shows that the selling has already begun.

  • JPMorgan Publishes The "Bitcoin Bible"

    Five months after Jamie Dimon’s infamous outburst, in which the JPM CEO called Bitcoin a fraud, and threatened any JPMorgan trader caught trading cryptocurrencies with immediate termination “for being stupid”, which was followed by JPM’s head quant alleging bitcoin was a pyramid scheme, the largest US bank has released what can only be called the “Bitcoin Bible“: 71 pages of excruciating detail on everything from the technology of cryptocurrencies, to their applications and challenges. 

    While there is too much in the report – which was published on the same day that the NY Fed admitted that in “A Dystopian World, Bitcoin Would Dominate Payment Methods” which of course is the whole point behind cryptos which as a contingency plan to the collapse of fiat currencies – to be summarized in one post, and instead we will focus on the key points over the next few days, below we republish the Executive Summary from the report, highlighting the key sections.

    Executive Summary

    Introduction

    • J.P. Morgan researchers from across a wide range of expertise analyze various aspects of Cryptocurrency (CC) to gain insight on this market and its potential evolution in this report. CCs’ extremely rapid growth, and then fall, both in terms of number of CCs and prices and their challenge to the current financial infrastructure, are forcing all market participants to closely monitor and understand this new market.
    • Cryptocurrencies are virtual currencies that are created, stored and governed electronically by an open,  decentralized, cryptography system. CCs can be used to exchange money, to buy certain goods/services or as an investment. There are over 1,500 cryptocurrencies with a market cap of some $400bn as of February 8, 2018, with Bitcoin being the largest representing a third of the market according to CoinMarketCap.
    • Launched in early 2009, Bitcoin (BTC) is the dominant cryptocurrency with a market cap of $140 billion (representing one-third of the CC market) and nearly 17 million BTC units in circulation (capped at 21 million). Bitcoin was the first major cryptocurrency and has spawned many competing CCs and technologies, many of which still fall back to Bitcoin as a support currency. Bitcoin itself has split into two cryptocurrencies, Bitcoin and Bitcoin Cash, to improve liquidity.

    Technology

    • Cryptocurrencies are the face of the innovative maelstrom around the Blockchain technology that is bringing both massive price volatility and a constant trial-and-error of new product try-outs and failures.
    • CCs are unlikely to disappear completely and could easily survive in varying forms and shapes among players who desire greater decentralization, peer-to-peer networks and anonymity, even as the latter is under threat. The underlying technology for CCs could have the greatest application in areas where current payments systems are slow, such as across borders, as payment, reward tokens or funding systems for other Blockchain innovations and the Internet of Things, as well as parts of the underground economy.

    Applications

    • There are over 1,500 CCs with a market cap of $400bn. Transactions in the three largest CCs average $550bn per month and come mostly from individuals. Ownership is highly concentrated. The opportunity set around direct CC trading appears relatively limited for banks, while the two Bitcoin futures recently launched are seeing only $140mn in daily trading.
    • Blockchain saw its first expression through Bitcoin – the first CC – but is more likely to ultimately see its greatest application outside of CCs across other financial and non-financial transactions, even as Blockchain itself looks set to evolve fast as the market learns about what works best.
    • There is the potential for increased usage of Blockchain in cross-border payments, settlement/clearing/collateral management as well as the broader world of TMT, Transportation and Healthcare but only where any cost efficiencies offset regulatory, technical and security hurdles.
    • Hedge funds have been moving into this market making up most of the 175 CC funds but AUM remains only a few billion dollars. Asset managers are experiencing limited success in bringing products to market and have not been able to launch CC funds or ETFs without support from the SEC or major distributors.
    • While about half of the early CC transactions happened in the underground economy, the share of this is declining,  with investing and speculation now taking a much larger share.

    Challenges

    • It will be extremely hard for CCs to displace and compete with government-issued currencies, as dollars to euros and yuan are virtual natural monopolies in their regions and will not easily give up their seigniorage profits.
    • CCs are experiencing heightened volatility and will face challenges from both technology (such as rising mining costs and hacking) and regulators who are concerned about anti-money laundering and investor protection, as CC payments are irreversible and there is no recourse.
    • Security concerns have mounted in Bitcoin exchanges as hackers have infiltrated a number of CC exchanges generating large losses, while regulators are challenging anonymity.

    Below are some of the JPM team’s observations on what the future could bring for cryptos, with highlights, however the most notable admission is JPM stating that cryptocurrencies “could potentially have a role in diversifying one’s global bond and equity portfolio“, a far cry from Jamie Dimon’s emotional appeal that all cryptos are a giant fraud.

    In the early stages of innovation, usually set off by new technology — in this case Blockchain — the market experiments with many different approaches to see what shape and form will stick and end up offering the most economic value-added. We would note that it is not pre-ordained that cryptocurrencies will succeed as there are valid concerns about what economic value they really contribute. But in a time of rapid innovation, many new products will are often-and-errored. We believe the potential disruption from Blockchain cannot be ignored.

    The excitement of innovation typically also leads to price booms and then crashes among the early movers, before more realistic prices emerge among the eventual survivors. Much of this is what we see today with exponential price gains and losses, growth and diversity among cryptocurrencies. Given the amount of speculation in these markets, technical signals can be very useful in gauging market direction and they have been sending the right signals in recent months. Fundamentals are a lot less informative here, although it can be useful to look at the cost of mining CCs, even as one must also account for the elasticity of supply.

    Cryptocurrencies are both a new technology — Blockchain — and a new currency (many new ones). The new shape and form of the CC market in the future will likely ultimately depend on what economic value they are perceived to add. We would expect the marketplace and regulators to ultimately weed out what are perceived the negative, less useful characteristics of CCs and retain the positive elements that add economic value.

    As discussed more in detail below, the Blockchain technology driving CCs offers transparency to transactions and allows them to be virtual and peer-to-peer. Distributed ledger technology has the potential to offer regulators greater degrees of transparency, higher levels of resiliency and shorter settlement times, reducing counterparty and market risk.

    Allen similarly discusses various efforts under way with, for example, a number of payment processing firms increasingly partnering with technology firms/Blockchain providers to offer an alternative settlement engine to various payment participants. We expect various Blockchain-based ecosystems to coexist and compete with each other (similar to Payments networks in the current environment), with success predicating on technology capabilities (such as API features), number of participants on the network and ease of adoption. Given the hurdles, CCs are more likely to be used as ancillary payment methods rather than gaining traction as a primary source of exchange.

    While seeing a potential for the deployment of the underlying Blockchain technology in payments, we do not see cryptocurrencies competing with central bank-issued money for lawful transactions. We note that CCs have not attained the relative stability of value to make them useful as money for everyday transactions. The current set of government-issued fiat currencies — such as the dollar and the euro — provide efficient media of exchange, stores of value and units of account. Some of the early buyers of CC were clearly dismayed by ballooning balance sheets of the major central banks in the aftermath of the global financial crisis (GFC), but the lack of any meaningful inflation since, in both developed markets (DM) and emerging markets (EM), has surely reduced concerns about fiat (legal tender issued by a central bank) money.

    In addition, we find that local legal tender money tends to be a natural monopoly with only extreme hyperinflation leading people to seek out a monetary alternative. To add, we do not find that CCs are currently meeting the standards of what constitutes money as the huge volatility of CC has made use of it as a unit of account impractical. Finally, given the huge returns from running a central bank (seigniorage), governments will be quite possessive of their legal tender role and will likely put up a fight if CCs were to gain broader traction domestically.

    Some EMs, such as Venezuela and Russia, appear to be considering issuing CCs as a way to improve international funding and evade US sanctions. Aziz is quite dubious about whether any of this will work as CCs face regulatory headwinds and are neither better than fiat money in establishing policy credibility nor in providing liquidity during crises.

    Several central banks, as discussed in Feroli, are investigating whether they should issue CCs in their own currency, but are very far from actually doing so, as any increased efficiency in payments technology does not appear to be that obvious. In addition, the issuance of crypto dollars, for example, would give non-banks access to the Fed balance sheet, and thus could endanger the economically and socially important financial intermediation function of commercial banks.

    In market economies, commercial banks manage the largest part of what we call money through their deposit
    base that they in turn lend out to the economy, after holding back a fraction as reserves at the central bank. If cryptocurrencies were seen as superior to bank deposits, prompting a wholesale shift into cryptocurrencies, then a much larger share of savings would go to the central bank’s assets (government debt) and less to commercial banks loans, thus potentially dramatically increasing private credit risk premia and reducing the flow of credit to the private sector. Fractional reserve banking was a tremendous innovation that surely contributed greatly to global growth over the last two centuries, and we would expect that central banks would think twice before disturbing this source of capital to the private sector.

    We examine the potential role of CCs in terms of offering diversification in a global portfolio, given both their high returns over the past several years and their low correlation with the major asset classes, offsetting some of the cost of high volatility. If past returns, volatilities and correlations persist, CCs could potentially have a role in diversifying one’s global bond and equity portfolio. But in our view, that is a big if given the astronomic returns and volatilities of the past few years. If CCs survive the next few years and remain part of the global market, then they will likely have exited their current speculative phase and would then have more normal returns, volatilities (both much lower) and correlations (more like that of other zero-return assets such as gold and JPY). Based on its historical performance, CCs can be 10 times more volatile than core assets like stocks, or than portfolio hedges, like commodities. Liquidity is also well below most other potential hedges. Extraordinary returns can be generated in the price discovery phase, only to be followed by several years of mean-reversion toward the eventual, long-term average level. In the current market conditions, we do not believe that an allocation to Cryptocurrencies as insurance should be a portfolio’s main or only hedge. Note that even though CCs have improved risk-adjusted returns over the past several years, they have not prevented portfolio drawdown during periods of acute market stress, like the equity flash crashes of August 2015 and February 2018.

    Below we highlight some of the key charts from the JPM “cryptobible”:

    What a typical bitcoin transaction flow looks like:

    Cryptocorrelation with other asset classes: virtually nil, i.e., a perfect diversifier.

    Cryptocurrency liquidity in the context of all other major asset classes.

    Current state of cryptocurrency regulation around the globe.

    Market liquidity: average bid/ask spread to buy 10 BTC:

    Cryptocurrency concentration of hodlers:

    Monthly trading volumes by market cap:

    Speed and cost per transaction:

    Bitcoin ETFs pending approval:

    Bitcoin mining cost-curves, i.e, where should you mine for bitcoin:

  • Rand Paul Accuses GOP Critics Of "Hypocrisy" For Agreeing To Bipartisan Budget Deal

    After Rand Paul’s “principled stand’ against a budget bill that would add nearly $300 billion to the deficit over two years forced his colleagues in the House and Senate to stay up all night Thursday, just to pass an essentially unchanged bill that could’ve easily passed 12 hours earlier if it weren’t for the Kentucky Senator’s dedication to libertarian principles compulsive need for media attention, it seemed like his colleagues were rushing to be the first to issue an insulting quote about Paul to any reporter who’d listen.

    One of Paul’s colleagues said he sympathized with a neighbor of Paul’s who famously tackled the senator while he was mowing his lawn, cracking a few of his ribs. Another dryly noted that “there aren’t a lot of books written about the great political points of history” – a jab at Paul, who voted for the White House’s $4.5 trillion budget resolution and then supported Trump’s deficit-expanding tax package.

    Already one of the most ubiquitous guests on the so-called Sunday Shows, Paul took to Face the Nation this weekend to explain and defend his decision to hold up the vote and trigger another government shutdown – even if it only lasted a few hours.

    During his interview with Major Garrett, Paul said Republicans need to reconcile their commitment to limit government spending and cut down on the deficit with their tendency to overspend on the military. Paul added that the US has accomplished about all it possible can in Afghanistan, and that now is the time to bring our troops home. The US is actively at war in about seven countries, Paul said. Yet none of those interventions were authorized by Congress.

    MAJOR GARRETT: And now we have deficits projected to be a trillion dollars again and yet they’re growing non-recessionary economy or are you troubled by that?

    SENATOR RAND PAUL: Yeah, I’m very worried and I think one of the questions the Republicans I think are not willing to ask themselves is can you be fiscally conservative and be for unlimited military spending. There’s sort of this question, “Is the military budget too small or maybe is our mission too large around the world?” And because Republicans are unwilling to confront that they want more, more, more for military spending. And so to get that they have to give the Democrats what they want which is more and more and more for domestic spending and the compromise while some are happy with bipartisanship. Well if the bipartisanship is exploding the deficit I’m not so sure that’s the kind of bipartisanship we need.

    MAJOR GARRETT: From your point of view, Senator, on the defense side of the equation is the spending and the mission, are they reckless?

    SENATOR RAND PAUL: I think the mission is- is beyond what we need to be we’re actively in war in about seven countries. And yet the Congress hasn’t voted on declaring or authorizing the use of military force in over 15 years now. So I’ve been one that’s been bugging the Senate and Congress to say how can we be at war without ever voting on it don’t the American people through their representatives get a chance to say when we go to war. I think the Afghan war is long past its mission. I think we killed and captured and disrupted the people who attacked us on 9/11 long ago. And I think now it’s a nation building exercise. We’re spending 50 billion dollars a year. And if the president really is serious about infrastructure, a lot of that money could be spent at home. Instead of building bridges and schools and roads in Afghanistan or in Pakistan. I think we could do that at home and the interesting thing is I think the president’s instincts lean that way but –

    But when confronted about inconsistencies in his own voting record – such as his decision to support both the budget agreement and the Trump tax plan – Paul insisted he could “only control how I vote”.

    MAJOR GARRETT: And that’s sort of the way, Senator, because you know where the votes are. You know the votes are there for tax cuts. You know they’re not there for spending cuts. So, isn’t there any part of your voting pattern that is irresponsible?

    SENATOR RAND PAUL: I don’t think so because you know I can only control how I vote. So I voted for the tax cuts and I voted for spending cuts. The people who voted for tax cuts and spending increases. I think there is some hypocrisy there and it shows they’re not serious about the debt. But all throughout my career I’ve always voted for spending cuts and I’m happy to offset cuts in taxes with cuts in spending. So no I think that I’ve had a consistent position in being very concerned about the debt and I want to shrink the size of government. So, the reason I’m for tax cuts is I to return more of the money to the people who own that who- who actually deserve to have their money returned to them. But it also shrinks the size of government by cutting taxes or should if you cut spending at the same time.

    This, of course, begs the question: Was Paul in some sort of fugue state when he voted for the Trump tax bill last year?

    If so, he might want to get that checked out.

  • Just One Number Matters In This Coming Week

    Stock may have suffered through one of their most volatile weeks in years triggered by the unexpectedly large (if miscalculated) spike in January wages, the highest since 2009, resulting in the biggest volquake in history, and come this Wednesday it may be time for round 2, because at 8:30am on Valentine’s Day, the U.S. inflation report – far more closely watched than the payrolls release – will hold the key to the next phase.

    Indeed, as Deutsche Bank notes:

    “it’s hard to remember a data point as eagerly anticipated as next Wednesday’s January CPI report in the US. With rates, equities and vol selling off aggressively and markets on edge, the strong January average hourly earnings print this time last week has caused havoc in the market over the last few days.”

    Why is the fate of the market suddenly in the hands of the otherwise trivial CPI number? Because, as we showed every day last week, every single time the 10-year Treasury approached or surpassed the four-year high of 2.85% last week, equities investors panicked and yanked bids amid fears the specter of higher inflation would accelerate the pace of Fed rate hikes, crushing the nearly 10 year artificial bull market in stocks bought with nearly $20 trillion in central bank liquidity. This is shown in the BBG chart below.

    And with average hourly earnings reportedly breaking out, there is suddenly a threat that core CPI may surprise to the upside, and not just modestly, but materially enough for the Fed – which is already expecting to hike rates 3 times in 2018 – to precipitate its tightening intentions, and if nothing else, certainly not intervene during the current market correction.

    “What’s happening now is just price discovery between bonds and equities — how far can the bond market push yields up before the equity market cracks?” T. Rowe Price’s Stephen Bartolini told Bloomberg . “The big fear in risk markets is that we get a big CPI print and it validates the narrative that inflation is coming back and the Fed is going to have to move faster.

    While the re-emergence of wage growth – long considered the missing link in an economic recovery that’s driven the jobless rate to near record lows – took the market by surprise, what is more curious is that at least on paper, the Fed’s intentions had been widely priced in: just before the stocks meltdown, traders were allegedly in sync with FOMC projections of three rate increases in 2018. However, the recent spike in longer-yields was the result of the bipartisan Senate plan, which would boost spending by an addition $300 billion, an increasing Treasury issuance even further, and beyond the $1 trillion projected this year.

    Stocks have not taken that well.

    That said, bond bulls remain: “The Treasury market is pricing in the most bearish scenarios that were on the docket for 2018, and still 10-year yields remain stubbornly below 3 percent,” BMO Capital Markets strategists Ian Lyngen and Aaron Kohli wrote in a Feb. 9 note. To the BMO due there’s a greater risk of yields declining over the next several months than rising.

    However, skeptics will be silenced promptly on Wednesday should the CPI/Core print higher than the expected, in which case a 3% on the 10Y becomes virtually certain, and unless stocks find some pressure outlet to relieve concerns of rising inflation – ideally a statement by some central banker – the next sharp move lower in stocks will immediately follow. As Bloomberg notes, at least some speculators expect such an outcome: Block trades in puts on 10-year Treasury futures Friday pointed toward demand for protection against yields rising to that level by March 23.

    So with that in mind, and with everyone’s eyes on Wednesday’s CPI report, here is what else to look for in the coming week:

    • Feb. 12: Monthly budget statement
    • Feb. 13: NFIB small business optimism; revisions to producer price index
    • Feb. 14: CPI; MBA mortgage applications; retail sales; real average weekly and hourly earnings; business inventories
    • Feb. 15: Empire manufacturing; initial jobless claims and continuing claims; PPI; Philadelphia Fed business outlook; industrial production; capacity utilization; Bloomberg consumer comfort; NAHB housing market index; Treasury International Capital flows
    • Feb. 16: Import and export price indexes; housing starts; building permits; University of Michigan survey data

    And summarized courtesy of Barclays:

    * * *

    Below is Deutsche Bank’s take:

    It’s hard to remember a data point as eagerly anticipated as next Wednesday’s January CPI report in the US. With rates, equities and vol selling off aggressively and markets on edge, the strong January average hourly earnings print this time last week has caused havoc in the market over the last few days.

    Current market expectations are for a +0.4% mom headline reading and +0.2% mom core reading, which translate into +2.0% and +1.7% yoy readings (both a decline of one-tenth from December). Meanwhile the other potentially big event next week is in Washington with President Trump expected to release a $1.5tn infrastructure plan (which will kick off the process for producing legislation) and also his 2019 budget blueprint.

    There is other important data out in the US next week too with the January PPI report on Thursday another significant inflation reading, while Wednesday will also see January retail sales released. January industrial production (Thursday), January housing starts and building permits (Friday) and the preliminary February University of Michigan consumer sentiment survey (Friday) will also be released. In Europe we’ll get final January CPI revisions in the UK (Monday) and Germany (Tuesday) while second readings of Q4 GDP will be out in Germany and the Euro area on Wednesday. Late on Tuesday we’ll also get Japan’s Q4 GDP print.

    It’s also looking like a busy week for ECB speakers with Weidmann (Wednesday), Mersch (Wednesday and Thursday), Praet (Thursday) and Coeure (Friday) all scheduled to speak. The Fed’s Mester will speak on Tuesday.

    Finally it’s worth noting that Chinese New Year kicks off on Thursday, with mainland markets subsequently shut until February 21st.

    What to look out for next week?

    • Monday: With data fairly thin on Monday all eyes will instead be on the White House with President Trump expected to release a $1.5tn infrastructure plan, along with his 2019 budget blueprint. Away from that the only data of note is  the January monthly budget statement in the US. Heineken will report earnings.
    • Tuesday: A busier day for data with the January CPI/PPI/RPI report in the UK the main focus. In the US the January NFIB small business optimism print will be released while in Japan the preliminary Q4 GDP print will be out in the late evening. Away from data the Fed’s Mester is due to speak in the afternoon on monetary policy and the economic outlook. Pepsico will release earnings.
    • Wednesday: Front and centre on Wednesday is the January CPI report in the US, while January retail sales will also be released alongside. December business inventories is the other data release due in the US while in Europe we’ll get Q4 GDP in Germany (second estimate) and the final January CPI revisions, along with Q4 GDP for the Euro area (second estimate). Away from data the Bundesbank’s Weidmann is due to speak in the morning, followed by the ECB’s Mersch. German Chancellor Merkel is also due to speak at a CDU event. CISCO, and Credit Agricole will report earnings.
    • Thursday: Another busy day for data with January PPI, January industrial production, February empire manufacturing, February Philly Fed PMI, February NAHB housing market index and the latest weekly initial jobless claims readings all due in the US. In Europe Q4 employment data in France and the December trade balance for the Euro area are due. The ECB’s Mersch and Praet are also slated to speak at an event in Paris. It’s with noting that New Year celebrations in China will also begin on Thursday, with mainland markets subsequently shut until the 21st. Nestle will report earnings.
    • Friday: The end of the week will see January retail sales data released in the UK, along with the January import price index, January housing starts and building permits and the preliminary February University of Michigan consumer sentiment reading in the US. The ECB’s Coeure will also speak in the morning. Coca-Cola, and Kraft Heinz will all report earnings.

    * * *

    Finally, here is Goldman with its breakdown of key US events together with consensus forecasts:

    The key economic releases next week are CPI and retail sales on Wednesday and Industrial production on Thursday. There is one speaking engagement from a Fed official this week, on Tuesday.

    Monday, February 12

    • 02:00 PM Monthly budget statement, January (consensus -$51.0bn, last -$23.2bn).

    Tuesday, February 13

    • 08:00 AM Cleveland Fed President Mester (FOMC voter) speaks: Cleveland Fed President Loretta Mester will speak at a breakfast event hosted by the Dayton Area Chamber of Commerce. Audience and media Q&A are expected.

    Wednesday, February 14

    • 8:30 AM CPI (mom), January (GS +0.38%, consensus +0.3%, last +0.20%): Core CPI (mom), January (GS +0.22%, consensus +0.2%, last +0.24%); CPI (yoy), January (GS +1.98%, consensus +1.9%, last +2.1%); Core CPI (yoy), January (GS +1.71%, consensus +1.7%, last +1.8%): We estimate a 0.22% increase in January core CPI (mom sa), which would lower the year-over-year rate to +1.7%. Our forecast reflects a boost from January seasonality, and likely continued strength in shelter inflation. On the negative side, we expect a small drag from telephone hardware methodological changes. We estimate a 0.38% increase in headline CPI, reflecting firm consumer energy and food prices in January.
    • 08:30 AM Retail sales, January (GS +0.2%, consensus +0.2%, last +0.4%); Retail sales ex-auto, January (GS +0.4%, consensus +0.5%, last +0.4%); Retail sales ex-auto & gas, January (GS +0.3%, consensus +0.4%, last +0.4%); Core retail sales, January (GS +0.3%, consensus +0.4%, last +0.3%): We estimate core retail sales (ex-autos, gasoline, and building materials) rose at a 0.3% pace in January. While the growth pace likely remains solid—reflecting a boost from strong service sector data and the January stock market rally— we anticipate some correction in the nonstore retailers category after a strong holiday shopping season. Given the further rise in (sa) gasoline prices and the decline in auto SAAR, we estimate 0.4% and 0.2% respective increases in the ex-auto and headline measures.
    • 10:00 AM Business inventories (consensus +0.3%, last +0.4%)

    Thursday, February 15

    • 08:30 AM PPI final demand, January (GS +0.2%, consensus +0.4%, last -0.1%); PPI ex-food and energy, January (GS +0.1%, consensus +0.2%, last -0.1%); PPI ex-food, energy, and trade, January (GS +0.1%, consensus +0.2%, last +0.1%): We estimate a 0.2% increase in headline PPI in January, reflecting a slight uptick in gasoline prices. We expect a smaller 0.1% increase in in the PPI ex-food, energy, and trade services category. In the December report, the producer price index was weaker than expected, reflecting softness in both core measures as well as in food and energy prices.
    • 08:30 AM Philadelphia Fed manufacturing index, February (GS +21.3, consensus +20.6, last +22.2): We estimate the Philadelphia Fed manufacturing index edged down in February. It is possible the decline in January partially reflected the Bomb Cyclone storms. Commentary from industrials remains encouraging, and we expect the index to remain at expansionary levels.
    • 08:30 AM Empire manufacturing survey, February (consensus +17.9, last +17.7)
    • 08:30 AM Initial jobless claims, week ended February 10 (GS 230k, consensus 228k, last 221k); Continuing jobless claims, week ended February 3 (consensus 1,928k, last 1,923k): We estimate initial jobless claims ticked up by 9k to 230k in the week ended February 10. Continuing claims – the number of persons receiving benefits through standard programs – declined in the previous week and may continue their general downward trend since early January.
    • 09:15 AM Industrial production, January (GS +0.5%, consensus +0.2%, last +0.9%); Manufacturing production, January (GS +0.4%, consensus +0.3%, last +0.1%); Capacity utilization, January (consensus 78.0%, last 77.9%): We estimate industrial production rose +0.5% in January, as the utilities category likely rose further and manufacturing rebounded from last month’s soft report. We expect manufacturing production rose +0.4%, reflecting strength in non-auto manufacturing.
    • 01:00 PM NAHB homebuilder sentiment, February (consensus 72, last 72)

    Friday, February 16

    • 08:30 AM Housing starts, January (GS +4.0%, consensus +3.3%, last -8.2%); We estimate housing starts rebounded 4.0% in January, reflecting a catch-up with the recently more resilient single-family permits, partially offset by unseasonably cold weather.
    • 08:30 AM Import price index, January (consensus +0.6%, last +0.1%)
    • 10:00 AM University of Michigan consumer sentiment, February preliminary (GS 94.8, consensus 95.5, last 95.7): We estimate the University of Michigan consumer sentiment index edged down 0.9pt to 94.8 in the preliminary estimate for February. We note the possibility of the recent stock market selloff over the last week to weigh on surveys conducted last week. The report’s measure of 5- to 10-year inflation expectations was 2.5% in January, near the middle of its 12-month range.

    Source: Barclays, DB, Goldman

  • Stock & Bond Investors Are Now Paying The Price For The Fed's Dangerous Experiment

    Authored by Vitaliy Katsenelson via ContrarianEdge.com,

    The Federal Reserve’s changing of the guard — the end of the Janet Yellen’s tenure and the beginning of the Jerome Powell era — has me remembering what it was like to grow up in the former Soviet Union.

    Back then, our local grocery store had two types of sugar: The cheap one was priced at 96 kopecks (Russian cents) a kilo and the expensive one at 104 kopecks. I vividly remember these prices because they didn’t change for a decade. The prices were not set by sugar supply and demand but were determined by a well-meaning bureaucrat (who may even have been an economist) a thousand miles away.

    If all Russian housewives (and house-husbands) had decided to go on an apple pie diet and started baking pies for breakfast, lunch, and dinner, sugar demand would have increased but the prices still would have been 96 and 104 kopecks. As a result, we would have had a shortage of sugar — a common occurrence in the Soviet era.

    In a capitalist economy, the invisible hand serves a very important but underappreciated role: It is a signaling mechanism that helps balance supply and demand. High demand leads to higher prices, telegraphing suppliers that they’ll make more money if they produce extra goods. Additional supply lowers prices, bringing them to a new equilibrium. This is how prices are set for millions of goods globally on a daily basis in free-market economies.

    In the command-and-control economy of the Soviet Union, the prices of goods often had little to do with supply and demand but were instead typically used as a political tool. This in part is why the Soviet economy failed — to make good decisions you need good data, and if price carries no data, it is hard to make good business decisions.

    When I left Soviet Russia in 1991, I thought I would never see a command-and-control economy again. I was wrong.

    Over the past decade the global economy has started to resemble one, as well-meaning economists running central banks have been setting the price for the most important commodity in the world: money.

    Interest rates are the price of money, and the daily decisions of billions of people and their corporations and governments should determine them. Like the price of sugar in Soviet Russia, interest rates today have little to do with supply and demand (and thus have zero signaling value).

    For instance, if the Federal Reserve hadn’t bought more than $2 trillion of U.S. debt by late 2014, when U.S. government debt crossed the $17 trillion mark, interest rates might have started to go up and our budget deficit would have increased and forced politicians to cut government spending. But the opposite has happened: As our debt pile has grown, the government’s cost of borrowing has declined.

    The consequences of well-meaning (but not all-knowing) economists setting the cost of money are widespread, from the inflation of asset prices to encouraging companies to spend on projects they shouldn’t.

    But we really don’t know the second-, third-, and fourth derivatives of the consequences that command-control interest rates will bring. We know that most likely every market participant was forced to take on more risk in recent years, but we don’t know how much more because we don’t know the price of money.

    Quantitative easing: These two seemingly harmless words have mutated the DNA of the global economy. Interest rates heavily influence currency exchange rates. Anticipation of QE by the European Union caused the price of the Swiss franc to jump 15% in one day in January 2015, and the Swiss economy has been crippled ever since.

    Americans have a healthy distrust of their politicians. We expect our politicians to be corrupt. We don’t worship our leaders (only the dead ones). The U.S. Constitution is full of checks and balances to make sure that when (often not if) the opium of power goes to a politician’s head, the damage he or she can do to society is limited.

    Unfortunately, we don’t share the same distrust for economists and central bankers. It’s hard to say exactly why. Maybe we are in awe of their Ph.D.s. Or maybe it’s because they sound really smart and at the same time make us feel dumber than a toaster when they use big terms like “aggregate demand.” For whatever reason, we think they possess foresight and the powers of Marvel superheroes.

    Warren Buffett — the Oracle of Omaha himself — admitted that he doesn’t know how the QE experiment will end. And if you think well-meaning economists running central banks know, you may have another thing coming.

    Alan Greenspan — the ex-pope of the Federal Reserve — in a 2013 interview with the Wall Street Journal said that he “always considered [himself] more of a mathematician than a psychologist.” But after the 2008-09 financial crisis and the criticism he received for contributing to the housing bubble, Greenspan went back and studied herd behavior, with some surprising results. “I was actually flabbergasted,” he admitted. “It upended my view of how the world works.”

    Just as the well-meaning economists of the Soviet Union didn’t know the correct price of sugar, nor do the good-intentioned economists of our global central banks know where interest rates should be. Even more important, they can’t predict the consequences of their actions.

    *  *  *
    Vitaliy Katsenelson is the CIO at Investment Management Associates, which is anything but your average investment firm. (Seriously, take a look.) He wrote two books on investing, which were published by John Wiley & Sons and have been translated into eight languages. 

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Today’s News 11th February 2018

  • Pentagon's Nuclear Doctrine – Retrograde and Reckless

    Via The Strategic Culture Foundation,

    In its latest Nuclear Posture Review (NPR), the American Pentagon declares at one point in the document that the Cold War is long over. Apart from that fleeting mention, however, one would think from reading the entire review that the Cold War, for Washington, has never been so palpable.

    It is a fear-laden document, relentlessly portraying the world as fraught with existential danger to US national security.

    Russia and China, as with two other recent strategic policy papers out of Washington, are again painted as adversaries who must be confronted with ever-greater US military power.

    The latest NPR asserts that since the last such review in 2010, “America confronts an international security situation that is more complex and demanding than any since the end of the Cold War.”

    It is clear from reading the 74-page document that Russia and China are the main source of security concern for the Pentagon – albeit the reasons for the concern are far from convincing. Indeed one might say downright alarmist.

    Washington accuses Russia and China of pursuing nuclear weapons development which is threatening. It accuses Russia in particular of violating arms controls treaties and threatening American allies with its nuclear arsenal. There are several other such unsubstantiated claims made by the Pentagon in the document.

    Russia and China responded by condemning the aggressive nature of the Pentagon’s latest doctrine, as they have done with regard to two other recent strategic papers published by the Trump administration.

    It is deplorable that Washington seems to go out of its way to portray the world in such bellicose terms. The corollary of this attitude is the repudiation of diplomacy and multilateralism.

    Washington, it seems, is a hostage to its own imperative need to generate a world of hostile relations in order to justify its rampant militarism, which is, in turn, fundamental to its capitalist economy.

    The lamentable, even criminal, danger of this strategy is that it foments unnecessary tensions and animosity in world relations. Russia and China have repeatedly called for normal, multilateral relations. Yet, remorselessly, Washington demonizes the two military powers in ways that are retrograde and reckless.

    The Pentagon’s latest nuclear doctrine goes even further in its provocations. Based on dubious accusations of Russia’s threatening behavior (“annexation of Crimea”, “aggression in Ukraine”), the Pentagon has declared it will rely more on nuclear force for “deterrence”.

    That can be taken as a warning that Washington is, in effect, lowering its threshold for deploying nuclear weapons. It overtly states that it will consider use of nuclear weapons to defend American interests and allies from “nuclear and conventional threats”. The language is chilling. It talks about inflicting “incalculable” and “intolerable” costs on “adversaries”. This is nothing short of Washington terrorizing the rest of the world into conforming to its geopolitical demands.

    Another sinister development is that Washington has now declared that it will be acquiring “low-yield” nuclear weapons. These so-called “mini-nukes” will again lower the threshold for possible deployment of nuclear warheads in the misplaced belief that such deployment will not escalate to strategic weapons.

    What’s disturbing is that the US is evidently moving toward a policy of greater reliance on nuclear force to underpin its international power objectives. It is also broadening, in a provocative and reckless way, what it considers “aggression” by other adversaries, principally Russia. Taken together, Washington is increasingly setting itself on a more hostile course.

    Some 57 years ago, in 1961, then US President Dwight Eisenhower gave a farewell address to the nation in which he issued a grave forewarning about the growing control of the “military-industrial complex” over American life. Back then, the American military-industrial complex could disguise its insatiable appetite with the pretext of the Cold War and the “Soviet enemy”.

    Today, the American federal government spends about $700 billion a year on military – over half its discretionary budget. The US spends more on military than at any time during the Cold War – in constant dollar terms.

    The US military-industrial complex has become a voracious monster way beyond anything that Eisenhower may have feared. It is no longer a threat merely to American life. It is a threat to the life of the entire planet.

    Objectively, the US has no foreign enemy endangering its existence; neither Russia nor China. Not even North Korea, despite its anti-American rhetoric, poses a direct threat to the US.

    The Pentagon – on behalf of the military-industrial complex – is stretching credulity when it depicts the world as a more threatening place. Fingering Russia and China is absurd.

    In order to try to shore up its scare-mongering with a semblance of credibility, the Pentagon is escalating the rhetoric about nuclear weapons and the need to deploy them. There is no objective justification for this nuclear posturing by the US, only as a way to dramatize alleged national security fears, in order to keep the military-industrial racket going.

    The despicable danger from this retrograde Cold War strategy is that the US is recklessly pushing the world toward war and possibly nuclear catastrophe.

    Fortunately, Russia and China have highly developed military defenses to keep American insanity in check. Nevertheless, American belligerence is pushing the world to combustible tensions.

    The problem is that American rulers have become a rogue state. The American people need to somehow sack their rogue rulers and their military madness, and return the nation to a democratic function.

    Until then, Russia and the rest of the world must be on guard.

  • AK-47 Rifles, Claymore Mines, & Grenade Launchers Discovered On Mexico Border

    According to Breitbart Texas, the federal government of Mexico recently deployed thousands of Mexican soldiers, Marines, and police officers to the Gulf region of the Mexico-United States border, as drug cartel violence spirals out of control.

    Rival factions of the Gulf Cartel are in an all-out war against each other for the control of drug trafficking and human smuggling routes into Texas. Breitbart Texas describes how drug cartels are using military weapons in daily skirmishes in the border region.

    During a series of recent military operations by the Mexican Army, soldiers honed in on various rural areas near the Rio Grande. According to exclusive information provided to Breitbart Texas via the Mexican Army, soldiers found a “series of weapons caches that had been buried”– leading to the arrest of three suspects.

    What the soldiers found next is mind-numbing. According to Breitbart Texas, “soldiers unearthed two Claymores, a grenade launcher, two Barrett .50 caliber rifles, 17 AK-47 rifles, ballistic plates, ammunition, and magazines.”

    It has been reported that the Gulf Cartel and other Mexican organized crime units have used Russian-made assault rifles and rocket-propelled grenades in past battles, this appears to be the first case of a U.S. military-grade directional anti-personnel mine found near the border.

    Special Operations.com explains the deadly power behind the M18A1 Claymore mine:

    Unlike traditional land mines, which direct their explosive upward, the Claymore is what is called a “directional mine.” This means that the user points the mine by using a crude sight on top, and steadies it with twin scissor-like anchors which can be pressed into the ground, or stand free on their own. A wire is then unfurled a safe distance back to the user’s position were a detonator in the form of a clacker is squeezed to initiate the explosion. Since the Claymore has a curved rectangular shape, once fired, plastic explosive hurls 700 steel balls out in a 60° radius. Anything exposed within a 50 yard distance is bound to become a casualty. This only increases by magnitude the closer to the detonation. The function is rather like dozens of shotguns going off at once. There is nothing like it on the battlefield.

    Watch the destructive force of the M18A1 Claymore mine destroying a truck body…

    Last month, we reported that the U.S. State Department warned all U.S. citizens and U.S. government employees to exercise increased caution while traveling in Mexico, and even restricted some regions from access because of “violent crime, such as homicide, kidnapping, carjacking, and robbery.”

    Exercise increased caution in Mexico due to crime. Some areas have increased risk. Read the entire Travel Advisory. Violent crime, such as homicide, kidnapping, carjacking, and robbery, is widespread. The U.S. government has limited ability to provide emergency services to U.S. citizens in many areas of Mexico as U.S. government employees are prohibited from travel to these areas. U.S. government employees are prohibited from intercity travel after dark in many areas of Mexico. U.S. government employees are also not permitted to drive from the U.S.-Mexico border to or from the interior parts of Mexico with the exception of daytime travel on Highway 15 between Nogales and Hermosillo.

    U.S. State Department discouraged all travel to 31 Mexican states and even issued five states to Level 4, otherwise known as a war-zone like some countries in the Middle East.

    The U.S. State Department defines Level 4 as :

    Do Not Travel: This is the highest advisory level due to greater likelihood of life-threatening risks. During an emergency, the U.S. government may have very limited ability to provide assistance. The Department of State advises that U.S. citizens not travel to the country or leave as soon as it is safe to do so. The Department of State provides additional advice for travelers in these areas in the Travel Advisory. Conditions in any country may change at any time. 

    For example in Colima, the U.S. State Department warns:

    U.S. government employees are prohibited from travel to Tecoman or within 12 miles of the Colima-Michoacán border and on Route 110 between La Tecomaca and the Jalisco border.

    Do not travel due to crime. Armed groups operate independently of the government in many areas of Guerrero. Members of these groups frequently maintain roadblocks and may use violence towards travelers.

    Do not travel due to crime. Violent crime, such as murder, armed robbery, carjacking, kidnapping, extortion, and sexual assault, is common. Gang activity, including gun battles, is widespread. Armed criminal groups target public and private passenger buses traveling through Tamaulipas, often taking passengers hostage and demanding ransom payments. Local law enforcement has limited capability to respond to violence in many parts of the state.

    Perhaps, President Trump’s border wall is a good idea as drug cartels on the Mexico-United States border are stockpiling military grade weapons.

  • Iran's Revolutionary Guard Vows "Hell To The Zionists" As Putin Warns Netanyahu

    Iran has called reports that they sent a UAV into Israeli airspace “ridiculous,” while an Iranian commander warns that they could unleash “hell” on the “Zionist regime” by destroying all US bases in the area. 

    “The claim about the flight of an Iranian drone and Iran’s involvement in the downing of a Zionist fighter jet is so ridiculous that it does not merit a comment,” said Iranian Foreign Ministry spokesman Bahram Qassemi, while claiming that Iranian officials are only advising the Syrians “at the request of the… legitimate and lawful government.”

    Moreover, any “aggressive actions” by Israel would trigger a serious response by Iran, creating “hell for the Zionists” according to Brigadier General Hossein Salami, deputy head of Iran’s elite Revolutionary Guards. His statement below:

    The Zionist regime in the Muslim world was shaped by the will of the United States and Britain, and they built a cemetery from the Islamic world. You have heard the story of the domination of the world of arrogance after World War II, the tragic story of Muslim slaughter in the wars that Britain has launched and know the role of the United States and Britain in the formation of the Zionist regime, or aware of the defeats of the Arab armies of the Zionist regime by American support.

    The United States was banning us and wanted to be paralyzed, but we advanced, and today, from this point on, today we can destroy all American bases in the region and create hell for Zionists.

    Today, the Islamic Republic of Iran is more powerful than ever. We trust in God; this was a confession two years ago when we seized the American Marines and the American inability to confront us. –Gen. Hossein Salami via Tasnim News (translated)

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    Gen Hossein Salami

    Meanwhile, Russian President Vladimir Putin warned Israeli Prime Minister Benajamin Netanyahu in a Saturday phone call to avoid an escalation of the situation in Syria, reports Reuterswhile Netanyahu asserted Israel’s right to “defend against aggression.”

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    They discussed the situation around the actions of the Israeli air force, which carried our missile strikes on targets in Syria,” Interfax quoted the Kremlin as saying.

    The phone conversation took place less than two weeks after a face-to-face meeting between the Israeli and Russian leaders in Moscow, the duo’s seventh face to face meeting in two years, in which the two leaders who are currently reshaping the middle east in the power vacuum left by the US, were said to have discussed military cooperation on Syria and Iran’s influence in the region. It is unclear whether today’s events were part of the talking points.

    Netanyahu also spoke with US Secretary of State Rex Tillerson on Saturday where he reiterated Israel’s stance. Tillerson is about to embark this weekend on a five-nation tour of the Middle East, visiting Turkey, Egypt, Kuwait, Jordan and Lebanon.

    “Our policy is clear,” said Netanyahu. “Israel will defend itself against any aggression and any attempt to violate its sovereignty,” adding “Iran undertook such attempt today. It violated our sovereignty, and infiltrated its drone into Israeli airspace from Syria.”

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

    As we reported earlier, Anti-aircraft fire downed an Israeli F-16 returning from a bombing raid on an Iranian UAV facility early Saturday.

  • On The Syria Occupation And The New Face Of Imperialism

    Authored by Caitlin Johnstone via Medium.com,

    US forces have attacked the Syrian military, reporting over a hundred deaths. The Syrian Ministry of Foreign Affairs is calling the air strike a massacre, a war crime, and a crime against humanity.

    The US is an invading, occupying force that is in Syria without the permission of its government, yet it is claiming that the air strike was an act of “self-defense” against an “unprovoked attack” upon the US-backed SDF, a mostly Kurdish militia which had occupied an area of Syrian land. No Americans suffered any injuries or deaths in the attack. The SDF suffered a single reported injury.

    It’s a bit like saying you broke into someone’s house and strangled them from behind with a garotte in self-defense.

    Believe it or not, it appears very likely that the US military’s latest act of butchery waged upon Middle Easterners on their own land was not about self-defense at all, but about oil. The always insightful Moon of Alabamamakes a compelling case that not only is America’s version of events full of plot holes, but that the whole thing could very well have been “a trap” to sabotage a local deal that had been made for the SDF to turn over an oil and gas field to the Syrian government in the near future.

    This would fit in perfectly with comments Professor Joshua Landis made about the attack, saying that America’s plan is to keep Syria weak, poor and divided in order to disadvantage US/Israel/Saudi rivals Iran and Russia. It would also clarify US Secretary of State Rex Tillerson’s assertion a few weeks ago that thousands of American troops are being kept in Syria to prevent Assad from regaining control of areas that have been liberated from ISIS.

    This is what the new imperialism looks like.

    When the Russian Federation annexed Crimea in 2014, everyone lost their minds. Countries don’t just annex territory from other countries anymore! It’s so barbaric! It’s so… 20th century.

    That’s simply not how we do things in the modern world. We don’t expand our geopolitical power by blatant land grabs, we expand it with treaties, alliances, intelligence/surveillance deals, trade agreements, corporate contracts, secret pacts, and occupations of key strategic locations under the pretense of fighting terrorism. Like civilized people.

    In the old days, an empire would expand itself by invading a weaker territory, killing its people until they gave up, and planting its flag there. We’d change the maps so that everyone could see that the region was now under the control of Rome or the British Crown or Napoleon or whomever, and the power structures would align themselves accordingly. It was all relatively simple and transparent.

    The new imperialism doesn’t do that.

    You will never see Syria made into the 51st state.

    Since the end of the second World War it has been increasingly taboo for a government to overtly invade a country and add it to that government’s official territory, and many international laws were locked into place to reflect that. And yet world power has arguably never been more consolidated than it is right now. The US, the UK, the EU, Saudi Arabia, Israel, Canada, Australia and many other nations tend to march more or less in lockstep with one another on a vast array of subjects ranging from neoliberalism to surveillance to which “regime” is in need of more crushing sanctions on a given day. The alignment isn’t perfect, but it’s too close to perfect to deny.

    Here in Australia we joke about being America’s 51st state, but, like Syria, we never will be. We don’t need to be. We’re already answerable to the same corporatist powers which control the US, so we trot right along into every US war, every US trade deal, and operate as a US intelligence asset just the same as we would if they’d planted the stars and stripes on our capitol buildings and called us Wisconsota. Through military alliance, intelligence alliance, corporatist agreements, and a good old-fashioned coup staged by the CIA and MI6, we transitioned smoothly from subservience under the old form of imperialism to subservience under the new. A whole continent full of McDonald’s-eating sheep.

    In the new imperialism, countries keep their borders, keep their names, and on paper keep their own sovereign governments as well. Australia remains Australia, Syria remains Syria. But the power dynamics are all bent to funnel toward the favor of the same vast power conglomerate.

    You can’t see the new empire on a map, so people assume that it isn’t there, but the only reason you can’t see it on the maps we were trained to read in school is because the new empire isn’t in any way limited by geography. It is unconcerned with the little lines drawn between the countries on our plastic classroom globes, or the different colors their manufacturers painted the different nations with. The nationless band of plutocrats who use governments as tools and weapons are not limited by those things. They don’t think in those terms. They don’t care about land and governments, they care about money, power, and influence. And none of those things are geographically confined.

    So they’re content to control a few strategic locations in Syria to wage a disruption campaign against rivals of the empire. They don’t need to annex Syria in order to do that, or even oust Assad. They’re not interested in the country, they’re interested in the nonlocalized new empire. They’ll control a few oil fields, secure a few shady alliances, unleash a few terrorist armies, all to funnel more and more power into the new empire, one contract at a time. Corporations and banks are not limited by national borders, and neither are the oligarchs who own them.

    Nations and governments don’t exist anymore. Not in the sense that they used to, anyway. The notion of meaningfully separate, sovereign governments is at this time a fairy tale told to the masses to keep us from realizing that we’re all being thrown into the gears of an exploitative threshing machine that only exists to feed the avaricious agendas of a few ruling elites.

    This has all been made possible by an ongoing war on the societal concept of sovereignty. Our concept of sovereignty is now so weakened that a powerful government can get away with invading another country and claiming “self defense” when it kills the people there, so weakened that constant domestic surveillance by secretive and unaccountable intelligence agencies is now considered normal, so weakened that the public will ferociously defend a police officer that guns down a civilian who reached for his wallet a little too fast.

    If society found some way to restore sovereignty to nations, governments, and above all to human beings, the ecocidal, omnicidal new empire which depends upon blurred lines and ignored boundaries would be unable to survive. And that would be great, in my opinion.

    *  *  *

    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.

  • After The Historic Risk Parity & CTA Crash, What's Next?

    Last Sunday, following the Friday post-payrolls flush, but before the Monday volocaust, which was the consequence of the concurrent historic vol squeeze of inverse VIX ETF funds, coupled with the sharp deleveraging by CTAs, risk parity and various other quant funds, we predicted that recent events were a “recipe for disaster” and that “while everyone may have an opinion on what happens next” one thing that is very likely is that “risk-parity funds – those who benefit as long as both stocks and bond yields act in tandem – are set to suffer the biggest hit.”

    This is what else we said:

    Friday’s equity market collapse and simultaneous bond market bloodbath was the biggest combined loss since December 2015, but perhaps more ominously, the week’s combined loss in bonds and stocks was the worst since Feb 2009.

    And as we further noted, judging by the major correlation regime shift between stocks and bonds that started on Monday, this is something considerably more worrisome for investors…

    … and especially risk-parity traders, who already saw their worst weekly performance since the Taper Tantrum…

    … and will be forced to significantly delever in the coming days – to the tune of tens of billions in net exposure – if the vol surge persists.

    What the above means is that, with all due respect to JPM’s head quant Marko Kolanovic who last week explicitly stated that he is not concerned about a quant puke as “the move was not large enough to trigger broad deleveraging” and “equity price momentum is positive and trend followers are not likely to reduce equity exposure”, we disagree, if for no other reason than the macro correlation regime had flipped. Visually, the regime change is shown in the chart below:

     

    One week later, with the market nearly 10% lower, vol funds around the globe in shambles, retail vol sellers crushed, the risk-parity blow up took place as predicted, in what now looks like the worst quant-quake since the summer of 2007.

    So what happens next?

    One answer comes from JPMorgan’s Nikolaos Panigirtzoglou, whose latest Flows and Liquidity analysis traces the contours of last week’s events, and who writes that “our analysis suggests that both CTAs and Risk Parity funds have been at the core of the recent correction”, confirming what we said, and then posits what may happen next.

    First, a recap at last week’s tumultuous events:

    Figure 1 shows the performance of various types of investors so far in February vs. last month. CTAs and Risk Parity funds appear to have suffered the biggest losses over the past week, more than erasing their previous January gain. Balanced mutual funds also suffered a heavy loss, more than erasing their previous January gain. In contrast, discretionary hedge funds such as Discretionary Macro or Equity Long/Short funds managed to preserve half or more of their previous January gains. This is especially true with Discretionary Macro hedge funds which appeared to have lost only -0.4% over the past week. This confirms our previous thesis that neither Discretionary Macro nor Equity Long/Short hedge funds were very long equities ahead of the correction.

    Why have CTAs, Risk Parity Funds and Balanced mutual funds suffered by so much more? A simultaneous selloff of equities, bonds and commodities is the worst possible backdrop for multi asset investors such as risk parity and balanced mutual funds. Indeed looking at the performance of a hypothetical Balanced fund 60:40 Equity:Bond portfolio, we find that the period over the past week saw the worst drawdown since the Fed taper tantrum of May/June 2013. Since January 26th the drawdown of a 60:40 balanced portfolio has been -6.6%, surpassing the -6.2% drawdown seen during the Fed taper tantrum of May/June 2013 (Figure 2). And the increase in 3M rolling realized vol at 3.3% has also been bigger than that seen during the Fed taper tantrum.

    The pressure on Risk Parity funds, which are stricter vol targeters than Balanced Mutual funds, to delever has been exacerbated not only by the shift in bond-equity correlation into positive territory, but also by the recent rise in equity/commodity correlation as commodity prices collapsed over the past few days along with equities.

    Here is another way of visualizing the risk-parity crash:

    And while we pointed out the rising bond-stock correlation, JPM notes that a new potential threat is that the commodity/equity correlation has also starting creeping up – yet another potential risk-parity deleveraging risk factor  – rising from just above zero at the end of January to +25% currently.

    This, JPM cautions, raises fears about further de-risking by Risk Parity funds.  But here’s the good news. In fact, it was so good, it sent the market soaring when the JPM note hit at 3:30pm on Friday.

    According to Panigirtzoglou, “we believe that any further derisking by Risk Parity funds will be more limited from here as they have de-risked already quite significantly.

    Specifically, “Risk Parity funds underperformed their hypothetical benchmark by 3.7%. This underperformance is even bigger than that seen during the Fed taper tantrum and is comparable to their previous de-risking seen into the US election.”

    Meanwhile, that other group of vol-targeting funds, CTAs, got absolutely annihilated last week, hit far worse than risk parity funds. JPM explains:

    As we have been highlighting over the previous weeks, the momentum signal of several futures contracts was reaching extreme levels during January, raising the risk of mean reversion signals being triggered, i.e. profit taking from certain CTAs that employ mean reversion signals along with momentum signals. The first futures contract to get  extreme was oil in mid-January, the week after were those of the S&P500 and MSCI EM indices, and then the euro and the pound at the last week of January. So it is possible that profit taking by those CTAs that employ mean  reversion along with momentum signals might have contributed in starting the correction. But as the correction  started unfolding, pure trend following CTAs were suffering from trend reversal, hitting stop losses on their momentum positions which they were forced to unwind. In a typical CTA, stop orders are placed for all open positions, i.e. when a trade goes against the fund, positions are automatically stopped out for a precalculated, limited loss. In addition, if there is high volatility, CTAs will scale down the size of their positions to main a relative stable VaR This combination of stop losses and rising volatility most likely triggered the most intense position unwinding by CTAs in the post Lehman period.

    Actually, make that the most intense position unwinding by CTAs ever. According to the SG CTA Index, overall CTAs lost 6.9% in four days from Feb 1st to Feb 7th. And, as JPM notes, “pure trend following CTAs did even worse losing 9.2% during these four days. In fact, the negative 4-day return for CTAs is unprecedented” as shown in the chart below.

    So between the violent deleveraging among risk-parity funds, and the biggest loss by CTA funds ever, what is left?

    Well, as the following chart showing a historic unwind in futures open interest over the past two weeks…

    … the position unwinding by the CTA universe has been so severe since the end of January, “that any position unwinding from here should be limited”, JPM argues, especially if one assumes that stop losses have been triggered already.

    Which then leads directly to the following silver lining which, as we noted above, was sufficient to send markets surging in the last hour of trading:

    In all, our analysis suggests that both CTAs and Risk Parity funds have been at the core of the recent correction, and that the position unwinding that both suffered from has been so severe that any further position unwinding should be limited from here.

    In other words, out of the quants’ ashes a new calm may emerge.

    Or maybe not: after all to relieve investor fears that more selling wouldn’t emerge, on February 1, JPM’s top quant Marko Kolanovic stated that  Equity price momentum is positive and trend followers are not likely to reduce equity exposure.” Oops, because what followed was arguably the biggest equity exposure reduction in history. So yes, JPMorgan has a tendency to see things in a somewhat optimistic light now and then.

    There is another risk: echoing his warning from a week ago, which we described in “the worst case scenario“, Panigirtzoglou concludes that the last great unknown risk is what retail investors do next.

    [The position unwinding], combined with the low equity exposures of Discretionary Macro and Equity Long/Short hedge funds, leaves retail investors as the residual risk for equity markets going forward. Retail investors had poured more than $100bn into equity ETFs during January. Of that $100bn, $40bn was invested into US equity ETFs. US equity ETFs, which have been at the epicenter of the fund outflows over the past week, lost $25bn so far. So more than half of the $40bn that had entered US equity ETFs in January has been withdrawn already. So again, the picture we are getting in the US equity ETF space is one of advanced rather than early stage de-risking.

    Furthermore, in another confirmation of the “worst case scenario”, we wrote on Friday that just two weeks after record inflows, equity funds saw their biggest weekly outflow in history as retail investors panicked to get the hell out of Dodge.

    Which then reduces the question posed in the title: “what next” to a simple binary scenario: either Friday’s mini meltup will be sufficient to give retail investors confidence that the crash is over, or it won’t, in which case Bank of America may be right on the money that once the selling resumes on Monday…

    … the only thing that stops it will be central bank intervention.

  • $20 Billion Hidden In The Swamp: Feds Redact 255,000 Salaries

    Submitted by Adam Andrzejewski

    The only thing the bureaucratic resistance hates more than President Trump is the disclosure of their own salaries. It’s a classic case of the bureaucracy protecting the bureaucracy, underscoring the resistance faced by the new administration.

    Recently, Open the Books filed a Freedom of Information Act request with the U.S. Office of Personnel Management (pictured) for all federal employee names, titles, agencies, salaries, and bonus information.

    We’ve captured and posted online this data for the past 11 years. For the first time, we found missing information throughout the federal payroll disclosures. Here’s a sample of what we discovered from the FY2017 records:

    • 254,839 federal salaries were redacted in the federal civil service payroll (just 3,416 salaries were redacted in FY2016).
    • 68 federal departments redacted salaries. Even small agencies like the National Transportation Services Board and the Federal Deposit Insurance Corporation redacted millions of dollars in salaries.
    • $20 billion in estimated payroll now lacks transparency.
    • A 7,360 percent increase in opacity hides one out of every five federal salaries.

    Who’s the bureaucrat in charge? Not a Trump appointee – the president doesn’t even have a current nominee at OPM. So, the buck stops with new acting Director Kathleen McGettigan, a 25-year staffer who assumed the position because she was the next in line, not because the White House appointed her.

    Trump has the power to replace her at any time. This lack of transparency is apparently a result of the president’s failure to appoint his people to executive positions. Trump knows controlling the human resource department is key to managing the federal bureaucracy. In fact, Trump forecast this type of institutional resistance in his inaugural address.

    “The establishment protected itself but not the citizens of our country. Their victories have not been your victories.… And while they celebrated in our nation’s capital, there was little to celebrate for struggling families all across our land. That all changes starting right here and right now.”

    The decision to redact 255,000 federal salaries for $20 billion in payroll harms oversight. The American people deserve to know who makes how much, in what position, employed by which agency.

    For example, more than 6,600 salaries were redacted at the Department of Veterans Affairs. At an agency where hiring priorities have been repeatedly questioned, transparency is crucial. In recent years, just one in 10 new hires at the VA was a doctor. In FY2017, the VA hired 8,727 new employees and just 561, or 6 percent, were doctors.

    In December 2017, our “OpenTheBooks Oversight Report – Mapping the Swamp, a Study of the Administrative State” found $114 billion in compensation paid to 1.35 million federal civil service employees (excluding the U.S. Post Office) in fiscal year 2016. We found 165 percent growth in bureaucrats making $200,000 or more; 30,000 bureaucrats out-earning all 50 governors at $190,000; and the average salary at 78 large federal agencies exceeding $100,000.

    At OpenTheBooks.com, citizens have the tools to investigate their local piece of the federal bureaucracy. We have literally mapped the swamp, pinning all federal disclosed bureaucrats plus post office employees by employer location ZIP Code on our interactive map.

    But not this year. Our organization can’t properly quantify the FY2017 payroll because of the massive salary redactions. After all, we can’t map what we can’t see.

    Make no mistake – even under the Obama administration, too much information was redacted.

    Last year, we complained about the 314,890 redacted employee names, including all 77,000 employees at the Internal Revenue Service and the $1.1 billion in “performance bonuses” shielded by federal union agreements (FY2016). We worked with Congressman Ron DeSantis on The Taxpayer-Funded Pension Disclosure Act, which would open the books on $125 billion in federal pension data.

    This year’s massive increase in redactions wasn’t a result of new policy, but a reinterpretation of existing policy. The OPM didn’t even mention the change in its FOIA response letter, making no legal argument for the 255,000 new redactions. It wasn’t until we asked the agency about the missing information that a representative issued the following response:   

    “On an ongoing basis, OPM reviews its methods for creating data files to ensure consistency with its Data Release Policy governing the release of records related to federal employees in positions or agencies that require location information to be redacted. Because the Adjusted Basic Salary field contains locality pay, OPM recently began redacting this information for certain classes of employees, hence the drop that your IT department noticed.”

    This didn’t make much sense, so we asked again. You can read the agency’s third attempt at a response via its spokesperson here.

    Facing resistance like this, the president has to work hard to deliver on his promises. The administrative state was designed to resist reform. Without a constant effort, the bureaucracy always wins.

  • Meet The US Army's Latest Killer-Robotic Humvees

    In the coming months, the United States Army is sending its first robotic Humvee to a field training exercise to see if the autonomous combat vehicle can accurately destroy targets, as part of a new experimental program to weaponize robots.

    The killer Humvee, which is called the ‘Wingman,’ is part of the Joint Capability Technology Demonstration, or JCTD program, where engineers have developed autonomously piloted weaponized vehicles in hopes it will provide direct and indirect fire support for ground troops trapped in dangerous situations on the battlefield.

    According to the Army Tank Automotive Research Development and Engineering Center, or TARDEC program, the goal behind the “Wingman” is to train soldiers and weaponized robotic vehicles to work together on the battlefield to confront America’s enemies. Army engineers say it will be Soldiers, not computers, which decide when the robotic Humvee fires a round.

    “You’re not going to have these systems go out there like in ‘The Terminator’ [film],” said Thomas B. Udvare, deputy chief of the program. “For the foreseeable future, you will always have a Soldier in the loop.”

    The Army Armaments Research Development and Engineering Center, or ARDEC, and the Naval Surface Warfare Center Dahlgren Division are also partners in the program, which was launched last year and funded with roughly $20 million after years of positive testing.

    Popular Mechanics explains how the Wingman system works,

    Right now, two Humvees make up the Wingman experiment: a manned M151 Humvee and the unmanned M1097 Wingman vehicle. Inside the crewed vehicle, three soldiers are assigned to take over key Wingman tasks. One of them handles Wingman’s target detection and laser range-finding, the second drives the vehicle if necessary, and the third pulls the trigger on the Wingman’s gun.  

    The Army highlights a significant issue with the current Wingman’s armament system. Engineers indicate the program will be upgrading legacy gas-powered M2 .50-caliber machine gun and M240 7.62-millimeter machine gun to an electrically-driven weapon that does not jam like the gas-driven machine gun.

    “One of the more significant upgrades will be to the weapon system with the addition of ARDEC’s Advanced Remote Armament System to solve an issue with its previous weapon, the M240B machine gun. While the ARAS system remains the same caliber, it is an electrically-driven gun that does not jam like the gas-driven machine gun.”

    “Obviously if you’re a kilometer away from your vehicle, jams are not good,” Udvare said. “What’s nice about their electrically-driven system is that the incidents of jamming are greatly reduced.”

    The Army’s solution: the Advanced Remote/Robotic Armament System (ARAS). Popular Mechanics dissects the ARAS system and how it is a fitting upgrade to legacy gas weapons:

    ARAS is a complete 7.62-millimeter machine gun that weighs 410 lbs. including the mount and 1,500 rounds of ammunition. ARAS has a heavy, fluted barrel that can survive burning through its entire ammo supply in less than five minutes. The gun is capable of 360-degree fire, 90-degree elevation and -30-degree depression. The system can load a fresh ammo pack in just six seconds. ARAS is paired with the Autonomous Remote Engagement System, which uses vision-based automatic target detection and user-specified target selection.  

    In May, the killer robotic Humvees are expected join engineers at “Grayling, Michigan, or Fort Benning, Georgia, to become certified in daytime operations on a Scout Gunnery Table VI course,” confirmed the Army.

    In May, engineers are slated to take the two-vehicle set, which also includes a command and control Humvee manned by five personnel, to Grayling, Michigan, or Fort Benning, Georgia, to become certified in daytime operations on a Scout Gunnery Table VI course. The course is the same one used to train and qualify ground combat vehicle crews before they advance to larger warfighting exercises.

    Military personnel could get their first opportunity to work side by side with the killer robotic Humvee come October, when “engineers hope to conduct an operational user assessment at Fort Benning using Soldiers and Marines,” added the Army.

    “We saw the Table VI as an opportunity,” Udvare said. “The course may not test all of our capabilities and may not show all of our flaws, but at least it’s a beginning point to start to assess these platforms and drive technology.”

    “By 2035, advances in technology may allow a Soldier to manage multiple assets such as combat vehicles, unmanned aerial vehicles and reconnaissance vehicles at the same time in combat, Udvare said.

    “Autonomous systems aren’t going to be smart enough to be on their own for decades,” Udvare added.

    “How we make split decisions on what we process in our environment … is very complex”

    “To add autonomous platforms to the manned formations and have both the man and the machine work side-by-side to accomplish a mission is pretty powerful,” Udvare said.

  • Is The Steele Dossier Full Of "Russian Dirt" – Or British?

    Authored by James George Jatras via The Strategic Culture Foundation,

    With text messages between US Justice Department (DOJ) conspirators Peter Strzok and his adulterous main squeeze Lisa Page now revealing that then-President Barack Obama “wants to know everything we’re doing,” it now appears that the 2016 plot to subvert the rule of law and corrupt the US organs of state security for political purposes reached the very pinnacle of power.

    To call the United States today a “banana republic” increasingly may be seen as a gratuitous insult to the friendly spider-infested nations to our south.

    Still, don’t expect to see Barry Hussein Saetoro doing the perp walk anytime soon or even being deported back to Kenya. Don’t expect to see orange prison suits on Strzok, Page, former FBI Director James Comey, former Associate Deputy Attorney General Bruce Ohr, former Deputy FBI Director Andrew McCabe, and others implicated in putting a political thumb on the scales to, first, get Hillary Clinton elected, and then, when that failed, to neuter Donald Trump’s presidency with a phony Russiagate probe. Officials’ getting “former-ed” is one thing, their getting prosecuted quite another. (Just imagine if a GOP administration had similarly skewed the supposedly non-political law enforcement and intelligence services for partisan reasons. We’d have Watergate on steroids. The New York Times, Washington Post and CNN would be calling for hanging, drawing, and quartering.)

    Indeed, it’s not even clear the Russiagate investigation itself will be impacted. After all, the narrative may have flipped on one variable – from Trump campaign collusion to Democratic and FBI collusion – but the constant remains the same: Russia. Trump’s defenders are as insistent as his detractors that the real culprit is Russia! Russia! Russia!

    Sean Hannity of Fox News has been particularly hyperventilative that the entire Steele Dossier lying at the black heart of the mess consists of “phony, fake-news Russian propaganda” and “Russian intelligence lies” from British MI6 (supposedly “former”) spymaster Christopher Steele’s “Russian sources.” Even level-headed observers like Paul Sperry and Patrick Buchanan characterize the file as a “Kremlin-aided smear job” and “Russian dirt [that] Steele was spoon-fed by old comrades in the Kremlin’s security apparatus.”

    Christopher Steele is not Russian

    But what do we really know about Steele’s claimed sources? Not much.

    Sure, maybe Vladimir Putin personally whispered every word of the dossier into Steele’s ear. Or maybe Steele invented his supposed sources from whole cloth: your clients are paying for sleaze, you give them sleaze. Or anything in between: maybe Steele consulted some imaginative Russian cranks with only a marginal, and most likely adversarial, relationship to the Russian authorities, whose “inside knowledge” Steele padded to justify his fee. (Steele claims he didn’t pay his “sources” – assuming they exist at all – but that’s no more worthy of credit than anything else he says.)

    As analyzed by Russia expert Stephen F. Cohen:

    ‘Where, then, … did Steele get his information? According to Steele and his many stenographers – which include his American employers, Democratic Party Russiagaters, the mainstream media, and even progressive publications – it came from his “deep connections in Russia,” specifically from retired and current Russian intelligence officials in or near the Kremlin. From the moment the dossier began to be leaked to the American media, this seemed highly implausible (as reporters who took his bait should have known) for several reasons:

    – ‘Steele has not returned to Russia after leaving his post there in the early 1990s. Since then, the main Russian intelligence agency, the FSB, has undergone many personnel and other changes, especially after 2000, and especially in or near Putin’s Kremlin. Did Steele really have such “connections” so many years later? [JGJIs it credible that the head of MI6’s Russian branch is on a first-name basis with top Kremlin insiders? Turn the identities around and ask whether the chiefs of the US section of Russian or Chinese intelligence are on intimate speaking terms with the US president’s top advisers or with the leadership of the CIA or FBI. Hardly.]

    – ‘Even if he did, would these purported Russian insiders really have collaborated with this “former” British intelligence agent under what is so widely said to be the ever-vigilant eye of the ruthless “former KGB agent” Vladimir Putin, thereby risking their positions, income, perhaps freedom, as well as the well-being of their families?

    – ‘Originally it was said that his Russian sources were highly paid by Steele. Arguably, this might have warranted the risk. But subsequently Steele’s employer and head of Fusion GPS, Glenn Simpson, wrote in The New York Times that “Steele’s sources in Russia…were not paid.” If the Putin Kremlin’s purpose was to put Trump in the White House, why then would these “Kremlin-connected” sources have contributed to Steele’s anti-Trump project without financial or political gain – only with considerable risk?

    – ‘There is the also the telling matter of factual mistakes in the dossier that Kremlin “insiders” were unlikely to have made, but this is the subject for a separate analysis.

    ‘And indeed we now know that Steele had at least three other “sources” for the dossier, ones not previously mentioned by him or his employer. There was the information from foreign intelligence agencies provided by Brennan to Steele or to the FBI, which we also now know was collaborating with Steele. There was … a “second Trump-Russia dossier” prepared by people personally close to Hillary Clinton and who shared their “findings” with Steele. And most intriguingly, there was the “research” provided by Nellie Ohr, wife of a top Department of Justice official, Bruce Ohr, who, according to the Republican memo, “was employed by Fusion GPS to assist in the cultivation of opposition research on Trump. Ohr later provided the FBI with all of his wife’s opposition research.” Most likely, it found its way into Steele’s dossier. (Mrs. Ohr was a trained Russian Studies scholar with a PhD from Stanford and a onetime assistant professor at Vassar, and thus, it must have seemed, an ideal collaborator for Steele.)’

    The reference to “people personally close to Hillary Clinton and who shared their ‘findings’ with Steele” dovetails with another intriguing suggestion from former Clinton insider Dick Morris, who knows the modus operandi of the Clinton lie generator better than anyone else. On the Fox News “Ingraham Angle” show, Morris suggested to host Laura Ingraham that the bulk of the dossier was invented by veteran political dirty tricksters and Clinton-machine hatchet men Sid Blumenthal and Cody Shearer, who then engaged “former” spook Steele, because of the Brit’s known relationship with the FBI, as their conduit to give their garbage credibility. (Never underestimate the residual “colonial” mentality of Yanks to find any sort of gibberish convincing if delivered with a British accent, as confirmed by the ubiquity of posh Brit voices in American advertising.)

    Andrew Wood is not Russian

    But Steele isn’t the only limey link to #Dossiergate. In late 2016, after Trump’s election victory, Andrew Wood, a former British ambassador to Russia, told US Senator John McCain about the existence of compromising material on Donald Trump, according to Wood’s account to BBC4. Wood then set up a meeting between Steele and David Kramer, an associate of McCain’s. It’s unclear whether McCain already knew about the dossier at that point or whether Wood alerted the Senator to its existence.

    For what it is worth – not much – Wood states that McCain had obtained the documents from the Senator’s own sources. “I told him I was aware of what was in the report but I had not read it myself, that it might be true, it might be untrue. I had no means of judging really,” and that he served only to inform McCain about the dossier contents: “My mission was essentially to be a go-between and a messenger, to tell the Senator and assistants that such a dossier existed,” Wood told Fox NewsWood elsewhere relates that McCain was “visibly shocked” at his description and expressed interest in reading the full report. That doesn’t sound as though McCain had already obtained the dossier from his “own sources” but, rather, that Wood was the instigator.

    So which is it? Did McCain already know about the dossier, and if so how did it “happen” to get raised with a British diplomat? Conversely, was the initiative from Woods to induce the Senator – known to be a strong Trump critic as well as for his hostility to Russia – to pass the dossier on in Washington? Keep in mind that the dossier had already been used to secure a Foreign Intelligence Surveillance Act (FISA) warrant to monitor Carter Page, a peripheral asteroid in the Trump orbit, and that Trump had already been elected. By this time the conspiracy’s purpose had shifted from preventing Trump’s victory to tying down his incoming administration, especially with respect to blocking any opening to Moscow as Trump said he intended to do. What better way to set the cat among the pigeons than for a supposedly totally non-political British diplomat (certainly no intelligence officer, he!) to quietly peddle the material from Steele (whom Wood called a “very competent professional operator … I do not think he would make things up.”) to the right man in Washington?

    GCHQ is not Russian

    Finally, while it’s clear the dossier served to get a FISA warrant for American services to spy on the Trump campaign and later the transition team, US agencies’ might not have been the only eyes and ears monitoring them. Amid all the hubbub over Michael Wolff’s slash-and-burn Fire and Fury, little mention (other than a heated denial on the floor of the House of Commons, from the notoriously truth-challenged former prime minister Tony Blair, and from the relevant British agency itself!) has been made of the suggestion that the UK’s Government Communications Headquarters (GCHQ) – Britain’s version of the NSA – was spying on Trump and providing their sister agencies in the US with additional data.

    Keep in mind the carefully worded deflection last year from James Clapper, former Director of National Intelligence (DNI), that “there was no wiretap against Trump Tower during the campaign conducted by any part of the national intelligence community… including the FBI,” thus begging the question of whether Trump was spied on not by a US “national” agency but by one of the Anglosphere “Five Eyes” agencies – most likely GCHQ – which then passed the information back to their American colleagues. With Steele’s and Wood’s involvement, and given the virtual control of America’s manifestly corrupted agencies of their counterparts in satellite countries like the United Kingdom, involvement by GCHQ and perhaps other “friendly” foreign agencies cannot be dismissed out of hand.

    Madame Prime Minister is not Russian

    To be sure, in 2016 the majority opinion in Russia was that Donald Trump’s election would be preferable to Hillary Clinton’s for the simple reason that the former openly advocated better relations with Moscow while the latter was a notorious warmonger. But there was also a strong minority view, especially among more pro-Western elements of the Russian establishment, that Hillary – “the devil you know” – was preferable to rolling the dice on an unpredictable and unknown quantity. Plus, Hillary was delightfully corrupt, with the Clinton Foundation an open invitation for many foreign powers to buy influence.

    There was no ambiguity in the position of the British government, however. In 2016 Prime Minister Theresa May, like her German counterpart, made little effort to hide her disdain for the “just plain wrong” Trump and her preference for Hillary Clinton, whom she expected to win (as did most other observers).

    Why should anyone be surprised that her MI6 and GCHQ minions would share the same views and perhaps acted on them to provide some helping “hands across the water” to their US counterparts whose anti-constitutional conspiracy now stands exposed?

     

  • CIA Slams "Fictional" Report Of Payment For Trump Sex Tape, NSA Cyberweapons

    The CIA has slammed “fictional” reports in The Intercept and the New York Times alleging that American spies paid a Russian operative $100,000 last September for what they were told were stolen NSA cyberweapons and a videotape of President Trump engaged with prostitutes in a Moscow hotel room. 

    After allegedly paying the operative, The Times reports US intelligence discovered that much of much of the material had already been made public, and they had effectively been swindled out of the first installment of an agreed upon $1 million payment – whittled down from the Russian’s original demand for $10 million.

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

    Shortly after Pulitzer Prize winner James Risen of The Intercept published his report on Friday alleging that the US intelligence community had “opened a secret communications channel with the Russian operatives” which involved the CIA transporting cash “to the CIA’s station in Berlin to complete the transaction,” Matthew Rosenberg of the New York Times published a similar story, adding that the cash was routed through an indirect channel, and delivered in a Berlin hotel room last September. 

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    Matthew Rosenberg (left), James Risen

    In reaction, the CIA called the report “fictional,” telling the Daily Caller News Foundation:

    The people swindled here were James Risen and Matt Rosenberg,” adding “The fictional story that CIA was bilked out of $100,000 is patently false”

    Rosenberg responded over twitter, attacking the CIA’s statement that the NYT said they were the source of the funds: 

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    James Risen of The Intercept tells CBS News “It’s a very complicated story.” 

    “First, the CIA and the NSA were trying to recover stolen NSA documents that allow people to do very sophisticated hacks, and they were worried that those documents would allow for really horrible hacks of American systems. So that was their main focus, was to try to buy back documents from the Russians on that. And in this process of conducting a secret channel with the Russians, some of the Russians began to offer documents related to Trump and to the 2016 campaign. And the Americans were very ambivalent about whether they wanted to get these documents, because they know how explosive this whole issue is.”

    So there was a lot of back and forth between the Russians and the Americans about whether the Americans would even accept the documents about Trump,” said Risen. “And so finally it appears that they accepted some, but their primary goal all along for the CIA and the NSA was to get these documents back from a group called Shadow Brokers.”

    The Times reported that the NSA cyberweapons were designed to hack into Russian and Chinese computer networks, but wound up in the hands of a hacking collective known as the “Shadow Brokers.” Hackers have reportedly used the tools to crack into networks around the world, including businesses, hospitals and factories. 

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Today’s News 10th February 2018

  • Trump Blocks Democratic Counter-Memo Over "National Security Concerns"

    President Trump declined to release the Democrat rebuttal to a GOP-authored “FISA memo,” following the advice of the Department of Justice and the Director of National Intelligence, the White House announced.

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    President Trump is “inclined to declassify” the Democratic memo, however there are several sections which would create “especially significant concerns” for “national security and law enforcement interests,” wrote White House counsel Don McGahn in a letter to House Intelligence Committee chairman Devin Nunes (D-CA).

    While the White House ignored FBI requests to redact the names in the GOP-authored memo, the Democratic response is said to reveal sources and methods which must be concealed. 

    In a separate letter to FBI Director Christopher Wray and Deputy Attorney General Rod Rosenstein, McGahn highlighted the problematic information. The White House says it will work with the House Intelligence Committee if it wants to revise the Democratic memo and resubmit it for White House review. 

    “The president encourages the Committee to undertake these efforts,” the letter states. “The Executive Branch stands ready to review any subsequent draft of the Feb. 5th memorandum for declassification at the earliest opportunity.”

    Democrats on the House Intel Committee can now make the requested changes, or submit their memo to the full house to seek a vote to override the President’s decision. 

    The House Intelligence Committee voted earlier this week to release the 10-page Democratic memo authored by ranking minority Committee member Rep. Adam Schiff (D-CA) following the declassification and public release of a four-page “FISA memo” authored by staffers for Chairman Devin Nunes.

    In response to Trump blocking the Democratic rebuttal, Nunes said on Friday that he was not surprised that the DOJ and FBI advised against its release.

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    Rep. Devin Nunes (R-CA)

    “Ranking Member Schiff pledged to seek the input of the Department of Justice and FBI regarding the memo’s public release, and it’s no surprise that these agencies recommended against publishing the memo without redactions,” said Nunes. 

    Nunes suggested that the Democrats make the “appropriate technical changes and redactions” as recommended by the justice department “so that no sources and methods are disclosed and their memo can be declassified as soon as possible.”

    Democrats Cry Foul

    After the GOP-authored memo was released, Democrats cried foul – calling it “inaccurate” and claiming its sole purpose was to derail and obstruct the ongoing investigations into Russian interference in the 2016 election. 

    Democrats were outraged at the President’s decision. In a Friday night statement, Schiff said that Democrats had provided their memo to the F.B.I. and the Justice Department for review before it was approved for release by the committee, and that the Democrat rebuttal was drawn from the same underlying documents as the Republican one.

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    Rep. Adam Schiff (D-CA)

    “We will be reviewing the recommended redactions from D.O.J. and F.B.I., which these agencies shared with the White House,” Mr. Schiff said, “and look forward to conferring with the agencies to determine how we can properly inform the American people about the misleading attack on law enforcement by the G.O.P. and address any concerns over sources and methods.”

    Rep Terri Sewell – a Democratic member of the committee, tweeted: “Republicans and Democrats on the Intelligence Committee voted UNANIMOUSLY to release this memo. @realDonaldTrump is not interested in transparency, he is interested in protecting himself and derailing the Russia investigation.”

    Despite Democrats’ anger, McGhan said – in addition to the fact that Trump was “inclined to declassify” the document – that “The executive branch stands ready to review any subsequent draft of the Feb. 5 memorandum for declassification at the earliest opportunity.” 

  • Dalio's $13 Billion Short: Bridgewater Unveils Its Biggest Ever Short Position

    Last October, Italy’s government was angry when the world’s largest hedge fund, Ray Dalio’s Bridgewater unveiled it had amassed a sizable  $713 million short against Italian financial stocks, its biggest disclosed bearish bet in Europe.

    Then last week, and just one month before Italy’s March 4 elections – which the broader market stubbornly refuses to acknowledge are a risk factor – Bridgewater tripled down on its bearish bets against Italian banks and insurers, making the position the largest thematic short carried by the world’s biggest hedge fund.

    As we reported last Thursday, Bridgewater boosted its bearish bets against Italian companies to $3 billion and 18 firms, up four-fold from just over $713 million in early October, further infuriating Italian authorities. As Bloomberg added, Bridgewater’s bearish bets against European companies as a whole totaled $3.3 billion, spread among 20 names.  In addition to his previous negative exposure, Dalio disclosed a short position in transport-infrastructure provider Atlantia and added to its largest short bet, against lender Intesa Sanpaolo SpA.

    The growing short comes just days after Dalio told a Davos audience that “holding cash is now stupid”… and literally days before the biggest market crash since Lehman.

    Fast forward to today, when Dalio’s bearish fascination is starting to get a little concerning, because according to the latest Bloomberg summary, Bridgewater now has at least $13.1 billion in European Union shorts, quadrupling the $3.2 billion short from last week, and over 18 times more than the fund’s original position last October.

    In the past week, Bridgewater put more than $1 billion to work betting against oil giant Total SA – making it the firm’s largest disclosed short holding in Europe. 

    As Bloomberg notes, Europe’s energy titan has been riding out the biggest industry downturn in a generation by selling assets and cutting spending. The hedge fund also started a bearish Airbus SE position, investing about $381 million against the aircraft maker. Among other short positions, it disclosed wagers against BNP Paribas SA, ING Groep NV and Banco Santander SA.

    Amusingly, since the Feb. 8 regulatory filings were made public, Total fell 1% as markets slumped, while Dalio’s other shorts, Airbus, BNP Paribas, ING Groep and Banco Santander sank roughly 2%.

    A list of Bridgewater’s top 10 shorts is shown below:

    At the risk of repeating ourselves – which we think under these circumstances is worth it – we will remind readers that on January 24, Dalio told a naive, fawning Davos audience that:

    “We are in this Goldilocks period right now. Inflation isn’t a problem. Growth is good, everything is pretty good with a big jolt of stimulation coming from changes in tax laws. If you’re holding cash, you’re going to feel pretty stupid.”

    And as Dalio was dissembling, he was quietly assembling Bridgewater’s biggest ever thematic short in his fund’s history.

    So yes, perhaps if you’re holding cash, you will feel pretty stupid eventually, but not after last week’s global market plunge; however, you will certainly feel much dumber if you actually believed Dalio.

  • WSJ Asks: Why Is The Media Ignoring The Real Bombshell FISA Memo?

    Authored by Guy Benson via Townhall.com,

    We’ll bring you Wall Street Journal columnist Kimberly Strassel’s tweetstorm in a moment, but I’ll take a stab at answering her question about the media right out of the gate.  

    Three possibilities:

    (1) The GOP hyped the Nunes memo, which quickly became the center of this whole firestorm — replete with counter-memos, FBI objections, etc.  The press followed the spotlight.

    (2) As we’ve been saying, there are so many complex pieces of this larger puzzle, following the plot is difficult.  It’s not just news consumers wondering, “which memo is this now?” — it’s many of the people trying to cover this drama, too.  The document in question here is a second, less redacted, version of a Senate memo that few people have even heard of. 

    (3) The Senate memo, produced by non-bomb-throwers Chuck Grassley and Lindsey Graham, is substantially more disruptive to the Democrats’ narrative than the Nunes document.  And the press generally prefers Democratic narratives to Republican ones because most journalists are liberals. 

    My guess is that some blend of all three factors helps explain why the Grassley/Graham memo has barely registered on the national radar, even after we’ve endured multiple high-octane news cycles starring Nunes and Schiff.  But on the substance, does Strassel have a point, or is this just the latest shiny object the right-wing is waving around to distract from “the real story,” now that the Nunes memo was arguably a bit of a dud?  Here’s her case:

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    Does that all of check out?  Allahpundit digs into the document (a much more redacted version had been released previously) and seems to agree that Grassley/Graham is a significantly bigger deal than Nunes.  In our analysis of the latter document last week, we wrote that a major question was how much the DOJ relied on the Steele dossier itself to gain a FISA warrant against former Trump adviser Carter Page.  According to Grassley/Graham, the answer is a lot.  I posited that if investigators had used the unverified dossier as a starting point from which to chase down leads and produce more solid evidence to present to a FISA judge, that’d be one thing.  But if they leaned heavily on Steele’s file itself as the “evidence,” that would be sketchier.  According to the two GOP Senators, the FBI did the latter.  From AP’s excellent summary (the relevant bits of the memo itself are here and here):

    …“The bulk of the application” against Page was dossier material…

    “The application appears to contain no additional information corroborating the dossier allegations against Mr. Page.”

    In other words, they seem to have treated the dossier as evidence, not as a lead. That’s big news.

    But that’s not all. Grassley/Graham allege, based on intelligence, that the man behind the anti-Trump dossier was known to be unreliable by the FBI (they eventually severed ties with him) because he was caught lying either to US law enforcement or to British courts, telling each entity different stories about a key fact. Either way, FISA judges who approved and renewed the Page warrants weren’t told about the proven unreliability of the foreign agent whose work product was (apparently) the central basis for said warrants. The FBI might counter that Steele seemed credible at first, then they dumped him when he burned them, but that doesn’t mean their hands are clean, Allahpundit writes:

    (a) that doesn’t solve the problem that the original FISA application against Page evidently relied “heavily” on information passed from a not-very-credible foreign agent and

    (b) that doesn’t explain why the Bureau allegedly failed to tell the FISA Court in later applications to renew their surveillance of Page that Steele’s info maybe hadn’t been so credible…Grassley and Graham make another good point about Steele’s chattering to the press while his investigation was still ongoing: Once bad actors were aware that he was digging for dirt on Trump, they could have sought him out and fed him any amount of BS in hopes of it trickling through to the FBI and deepening the official suspicion surrounding Team Trump. That’s how Clinton cronies — maybe even Sid Blumenthal — got involved in this clusterfark. Because Steele was supposedly willing to accept even unsolicited tips about Trump, the Clinton team may have fed him rumors to help fill a dossier for which their boss was paying.

    Two big points there:

    Even after the FBI recognized Steele was an established liar, his dishonesty was not disclosed to judges deciding whether to keep the warrants active during renewal applications, which were largely predicated on Steele’s credibility.

    And the topic about which he apparently lied was whether he blabbed to folks in the media about his work, which could have opened up the floodgates for disinformation from shady characters eager to make the anti-Trump case as juicy and brimming with salaciousness as possible.

    That’s where Blumenthal and company, whom I wrote about here, may have come in. What a mess. Also, speaking of not revealing pertinent information to the courts, it looks like Nunes was technically incorrect that the judges weren’t made aware that the Steele dossier was paid political oppo research. But he was more broadly correct that the judges didn’t have even close to the full picture of who was behind the unverified partisan document upon which they were primarily basing the surveillance of a US citizen — who happened to be a former aide to a major presidential campaign from the out-of-power party.

    “As Nunes himself later admitted, the Bureau apparently did disclose in a footnote that the material was paid political research. It just didn’t mention who, precisely, had paid for it,” AP writes.  The memo reads, “in footnote 8, the FBI stated that the dossier information was compiled pursuant to the direction of a law firm that had hired an “identified US person” — now known as Glenn Simpson of Fusion GPS…the application failed to disclose that the identities of Mr. Simpson’s ultimate clients were the Clinton campaign and the DNC.”  

    So the disclosure came in a footnote and didn’t mention that the parties who paid for the unverified dossier were the Trump campaign’s explicit opposition.  Maybe there was no misconduct in any of this, but even as someone who believes neither that suspicion of Carter Page was unreasonable, nor that this is all part of a grand anti-Trump conspiracy (remember, the Trump angle of the Russia probe started earlier, for an unrelated reason), there’s enough in the Grassley/Graham memo to make me uncomfortable with the standards by which Page was surveilled by the US government.

  • American Hysteria Over Russia Will Lead To Nuclear War, Report

    Authored by Seraphim Hanisch via TheDuran.com,

    Russian media reacts strongly to the American Nuclear Posture Review, which tries to convince its readers that Russia is trying to take over the world…

    Russian television broadcast a dire sounding piece on February 5th that probably was rather disquieting to most Russians, and also a source of significant dismay to their hopes for a rapprochement in relations following the election of Donald Trump to the Presidency of the United States.

    The news agency “Vesti” explained that the US is preparing itself for nuclear war with Russia.

    The US Department of Defense published its 2018 Nuclear Posture Review.  This consists of at least two documents that are public domain that detail the assessment the DoD made about nuclear threats from around the world.  The language about Russia is curious, for like Russia, the US repeatedly maintains that there is no desire for anything but good relations.

    However, this is unfortunately either a blind claim or a willfully blind claim for the sake of propaganda. 

    Based on the insanity of the US government’s reaction or posture about Russia overall, with the military fears, the sanctions and the most recent incidents of the release of the “Kremlin list” of government heads and successful businessmen and women, and the close flyby of a Russian fighter jet to an American surveillance aircraft, the ever-present “RussiaGate” investigations; and the lack of visible insanity on the Russians’ side, it seems likely that the American version of what is causing the ‘need’ to resolidify ‘defenses’ is lacking in factual evidence and cannot be taken as conclusive or trustworthy.

    Not that there is any precedent for this outrageous statement… and if you believe that…

    The problem begins with a false premise:

    Russia is not the Soviet Union and the Cold War is long over. However, despite our best efforts to sustain a positive relationship, Russia now perceives the United States and NATO as its principal opponent and impediment to realizing its destabilizing geopolitical goals in Eurasia. (Emphasis mine)

    This is an extremely bold assertion, though for some of the people who influence the stance of US foreign and military policy, this is how they see it.  However, it is also rather skillful sophistry that is achieved by a combination of American desire for hegemony and also, unfortunately, by a certain level of vagueness on both sides.

    The Russian component of this vagueness largely seems to rest on the matter of Ukraine.  Ukraine itself is rightly understood as the motherland of all the Rus’ (“all the Russias”) from history that runs back over a thousand years.  It was Kiev that was the great capital of the early Russian governorate, which slowly expanded to become the Russian Empire.

    However, there is also a complicated and deeply tragic history regarding the Ukraine, notably during the Soviet era, when millions of Ukrainians perished in what some in that country now regard as an intentional genocide, perpetrated deliberately against them by the Soviets in Moscow, hence, “Russia.”

    This issue itself is complex and warrants, even begs, further exposition, but it is beyond the scope of this article. Some understanding may be gained by reading this piece, which gives an interesting survey of the history of Ukraine.  (Be aware though that it still comes from a publication with Western perspective.)

    The main point is that Ukraine’s own nationalistic wish is spawned from factors including a national memory that points at Moscow as the source of their problems.  The fact that the Russian Federation is not Communist does not deter this point of view, because although the Russian nation is no longer a dictatorship, it still does not always conduct its foreign and national affairs transparently, and the desire for a real sense of self-determination is magnified by the allure of the glittering, wealthy West. The Western powers, most notably the USA, know this and have been teasing the Ukrainians with it.

    Some of them, in Kiev and the western areas of the country (not all of which were Soviet territories at one point) have long had ties more to Europe than to Russia, and the inclusion of their territories in the Soviet Union was a source of further bitterness.  For many people in Ukraine, their history is of living in a battlefield of foreign powers.

    They are understandably almost instinctively upset about any power’s designs on their territory, but it is also easy to manipulate this characteristic, and the United States has led the current struggle for Ukraine yet again.  The allure of Western European life seems to be what drew so many to the Euromaidan struggle in 2014, but the present day economy under the pro-Western government also appears to be in a shambles.

    At any rate, the historical memory of extremely authoritarian and cruel Soviet rule in the region, plus the present day “vagueness” that seems to exist with regards to Russian foreign affairs, helps the West to cast Russia as an authoritarian nation, led by a “secret Communist”, Vladimir Putin, “who used to be a KGB agent.”

    When one gives this information to many Americans, the conclusion they draw is clear.

    The Pentagon, the central hub of US military operations.

    Now to be sure, Vladimir Putin has been extremely open and candid about his nation and his own assertions of a strong Russian nation are absolutely proper for Russia, as they are for any nation. Nationalism is held extremely strongly in the United States, and again, history plays a part.  The recent history of what amounts to world dominance, militarily, scientifically, academically, and culturally, gives a sense to Americans that it is their country which is the guardian of all that is good.

    But what are they guarding?  That greatness has shown many signs of slipping into decadence, such as happened in the waning days of the Roman Empire, where people lost their vision of becoming great, and have been self-indulgent in their perceived independence, not only of other nations and cultures, but of any power, including the Highest Power.  We have seen it become legal to call homosexual unions “marriage” and depravity, drug use, and tremendous unproductive navel-gazing have become more and more prevalent in a nation that, a mere 45 years ago, really stood as a defender of Christian freedom.

    It is not possible that a nation living in delusion about itself can have a clear view of those nations outside itself.  And Russia has moved in the opposite direction as has the West.  The struggle exists, for Russia under Communism suffered great damage to the institutions of family, marriage and Church, but the move of the Federation now is to rebuild these core values.  All this while for a time, America seemed to be engaged in self-destruction by attacking these same core values.

    Now, America’s military is in an extremely dangerous place.  The amount of sheer power the military has is greater than any in the world.  Although Russia and China also have incredibly capable military forces, the Chinese are untested in battle thus far, and the Russians are just beginning to show their own incredible capabilities.  But the United States has been at war almost continuously since at least as early as 2001, and this projection of power does create experience.

    This Nuclear Posture Review shows us the face of a country who is deluded, hysterical, as the Russian media calls it, and they are right.  Despite the issues with Russia and Ukraine or Syria, Russia’s political will does not remotely resemble the notion that Russia is in an expansionist stage and that it wants to take over the former Soviet republics and then expand into the West.  Russia does want to chart her own course, and as a great power, and one with a long history and long memory of suffering, she wants to try to protect her own people from more suffering.

    The American posture points the finger at Russia for being a threat, and then implies that Russia is a threat in very well-crafted language.  And this makes the assessment even more dangerous:

    Russia has significantly increased the capabilities of its non-nuclear forces to project power into regions adjacent to Russia and, as previously discussed, has violated multiple treaty obligations and other important commitments. Most concerning are Russia’s national security policies, strategy, and doctrine that include an emphasis on the threat of limited nuclear escalation, and its continuing development and fielding of increasingly diverse and expanding nuclear capabilities. Moscow threatens and exercises limited nuclear first use, suggesting a mistaken expectation that coercive nuclear threats or limited first use could paralyze the United States and NATO and thereby end a conflict on terms favorable to Russia. Some in the United States refer to this as Russia’s “escalate to de-escalate” doctrine. “De-escalation” in this sense follows from Moscow’s mistaken assumption of Western capitulation on terms favorable to Moscow.

    Effective U.S. deterrence of Russian nuclear attack and non-nuclear strategic attack now requires ensuring that the Russian leadership does not miscalculate regarding the consequences of limited nuclear first use, either regionally or against the United States itself. Russia must instead understand that nuclear first-use, however limited, will fail to achieve its objectives, fundamentally alter the nature of a conflict, and trigger incalculable and intolerable costs for Moscow. Our strategy will ensure Russia understands that any use of nuclear weapons, however limited, is unacceptable.

    The U.S. deterrent tailored to Russia, therefore, will be capable of holding at risk, under all conditions, what Russia’s leadership most values. It will pose insurmountable difficulties to any Russian strategy of aggression against the United States, its allies, or partners and ensure the credible prospect of unacceptably dire costs to the Russian leadership if it were to choose aggression.

    This is an amazing construction and assertion, and it is extremely dangerous for a nation with simultaneously massive power and a deluded worldview to hold.  It is also very difficult to get people who have such a suspicious point of view to back away from that suspicion. There is a great deal of bondage such belief and fear exerts on those who hold it.

    That being said, this situation helps explain what many in the alternative media do – to counter media and political bias and to report on events in a light that is hopefully objective and true.  The Vesti newspiece was in its own way as alarmist as the American document it reported is.  The real way through this is obviously through increased understanding of the truth in all matters – historical, ideological, and in our case here, geopolitical.

    The American side has taken several nasty jabs at the Russians recently, in this document and last week’s “Kremlin list”, but there is also hope that the disintegrating “Russiagate” investigation will come to the true conclusions about this matter, and so free the hands of those in America who understand that Russia is anything but an enemy or adversary.

  • Visualizing The Worst Crashes In Bitcoin History

    Compared to some of the panics during the early days of bitcoin, the pioneering cryptocurrency’s 60%+ slide since the beginning of the year hardly register at all.

    In the nine-year history of the cryptocurrency, which introduced the “revolutionary” blockchain technology to the world, osses have been as minimal as 30% and as severe as 87% during these Bitcoin panics. And compared with some of its previous dips – like the Mt. Gox-induced selloff in February 2014 that effectively ended the firs speculative bubble in the cryptocurrency after it officially went mainstream.

    The latest correction took place between Dec.17 and Feb. 6, or 48 days, in which 70% of Bitcoin value was lost. However, if you look at the period between April 10, 2013 and April 12, 2013, Bitcoin lost an astounding 83% of its value over a three-day period. Talk about a panic! The point is that crashes have become relatively common throughout the cryptocurrency market, which is known for its swift volatility. It is important to turn to data and the facts in times of turmoil, rather than relying on one’s emotions.

    Using the BitStamp Bitcoin-to-U.S.-Dollar (BTC/USD) pair, HowMuch measured the specific highs and lows of the past crashes dating back to January 2012. In the chart below, the arrow delineates the magnitude of the crash – while the number of days is listed below:

    btc

    As US stocks sold off again Friday, capping off the worst two-week selloff since 2009, bitcoin has climbed, as worries about a resurgence of inflation have rattled investors, making the inherently deflationary bitcoin that much more attractive.

  • Donald Trump's Superficial Patriotism At The Twilight Of U.S. Empire

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    Already long ago, from when we sold our vote to no man, the People have abdicated our duties; for the People who once upon a time handed out military command, high civil office, legions — everything, now restrains itself and anxiously hopes for just two things: bread and circuses.

    – Juvenal

    Despite the title, I don’t want this post to be all about Donald Trump. The truth of the matter is all politicians love superficial patriotism. It’s why they all claim to care deeply about the troops, yet allow veterans to wait weeks or months to see a doctor after sending them to fight pointless imperial overseas wars based on fabrications. All these disingenuous politicians are total frauds, but they tend sell the same destructive policies in different ways. As such, it’s important to understand how they manipulate and divide us.

    First and foremost, standing for the National Anthem, saluting the flag or cheering a military parade is not “supporting the troops.” If you think such trivial and superficial acts represent anything beyond lazy surface level virtue signaling you’re a huge part of the problem. Your thoughtlessness and fake patriotism is exactly why our young kids are being sent off to die and murder other young kids halfway across the world to pad the coffers of plutocrats and the egos of empire obsessed sociopaths in D.C. Not only are such acts not patriotism, your phony gestures help grease the wheels of global death and destruction.

    Having a strong military for national defense is a necessary thing, but the purpose of such a force should always and in all circumstances be defense. A major problem arises when you have a global empire coupled with the strongest military on earth. Such a situation results in an overwhelming temptation to use this power for offensive aggression, and that’s exactly what our so-called “elites” have used the U.S. military for throughout the 21st century. The attacks of September 11, 2001 merely provided an excuse for the most twisted people in Washington D.C. to live out their most deranged power fantasies. George W. Bush got the ball rolling, Barack Obama stuck to the script, albeit with a more slick sales pitch, and Donald Trump’s set to take us to the inevitable end, which is imperial collapse.

    In many ways, Donald Trump is the ideal President to usher in the end of U.S. empire. While the more gullible slice of his support base credulously believed he’d “Make America Great Again,” his more jaded and realistic voters merely hoped he’d just burn the whole thing down, metaphorically speaking. He needed a combination of these two groups to win, so it’s very important to not think of his voters as a monolithic entity. Many of them don’t even like Trump, they just wanted to throw a grenade into this corrupt system and knew he was the best of the two candidates to do it. In many ways, they were correct.

    They weren’t correct because Trump meant anything he said on the campaign trail. He clearly didn’t. It’s obvious Trump loves Wall Street, after all, the first thing he did was surround himself with former Goldman Sachs partners. On foreign policy, he’s embraced some of the most barbaric and despotic regimes on earth, such as Saudi Arabia, with the enthusiasm of a little boy with a grade school crush, and appears disturbingly eager to start a war with Iran. That said, Trump’s Presidency’s may still lead to the effect desired by many of his more cynical voters.

    For example, things really are coming apart at the seams, largely due to the transparently hysterical and demented reaction of neocons and neoliberals to his election. This faux “resistance” movement is such an obvious superficial sham it’s caused everyone with a somewhat functioning brain to recognize that most of the dominant aspects of this culture are shams. This realization is becoming harder and harder to deny, especially for younger generations. Which brings me to the next issue. Trump’s military parade.

    By now, I’m sure you’ve all heard about Trump’s desire for a grand military parade. This longing was apparently inspired by a trip to that paragon of global military might, France, where he witnessed such a dazzling performance it committed him to bring such a spectacle back home.

    We leaned that:

    Surrounded by the military’s highest-ranking officials, including Defense Secretary Jim Mattis and Joint Chiefs of Staff Chairman Gen. Joseph F. Dunford Jr., Trump’s seemingly abstract desire for a parade was suddenly heard as a presidential directive, the officials said.

    “The marching orders were: I want a parade like the one in France,” said a military official who spoke on the condition of anonymity because the planning discussions are supposed to remain confidential. “This is being worked at the highest levels of the military.”

    The inspiration for Trump’s push is last year’s Bastille Day celebration in Paris, which the president attended as a guest of French President Emmanuel Macron. Trump was awestruck by the tableau of uniformed French troops marching down Avenue des Champs-Elysees with military tanks, armored vehicles, gun trucks and carriers — complete with fighter jets flying over the Arc de Triomphe and painting the sky with streaks of blue, white and red smoke for the colors of the French flag.

    Aboard Air Force One en route home from Paris in July, aides said Trump told them that he was dazzled by the French display and that he wanted one at home.

    It was still on his mind two months later when he met with Macron on the sidelines of the United Nations General Assembly in New York.

    “It was one of the greatest parades I’ve ever seen,” Trump told reporters. “It was two hours on the button, and it was military might, and I think a tremendous thing for France and for the spirit of France.”

    Seated next to Macron, Trump added: “We’re going to have to try to top it.”

    If you think this sounds like the thought process of a two-year old, you’re right, but there’s more to it. For all his flaws, Trump is actually a very talented manipulator and salesman. This is why I was one of the first people to say we needed to take Trump seriously back in 2015 when most others were mocking him. He understands the ancient concept of “bread and circuses” as well as anyone, and he knows there’s no bigger slobbering circus than a big military parade.

    Superficial patriotism is the most attractive form of patriotism for any politician. It encourages spectacle without substance. Bluster without tangible success. Chest-thumping without sacrifice. Any big military parade in the U.S. will be a definitive sign of desperate insecurity and evidence that the American empire is expiring.

    Hate to break it to you, but the rest of the world will see a U.S. military parade and immediately think, oh, the U.S. is even weaker than we thought. Meanwhile, the same social media Trump celebrities we already knew had fascist tendencies will enthusiastically cheer such a spectacle and attempt to divide the public over it. Please don’t fall for such nonsense.

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  • Marijuana Tops Liquor Sales For First Time In Aspen

    Marijuana shops in Aspen raked in the green in 2017, topping liquor sales with $11.3 million in revenue vs. $10.5 million of alcohol in the Colorado resort town home to just under 7,000 residents, and tens of thousands of tourists who are more mellow than ever.

    The figures, provided Wednesday in the city’s Finance Department year-end tax sales report for 2017, show Aspen retailers taking in a combined $730.4 million in revenue, up slightly over 2016. 

    Marijuana sales jumped 16% over 2016, which saw $9.7 million in sales – marking the largest increase among Aspen’s 12 retail sectors. Meanwhile, liquor store sales were flat year-over-year. 

    “I think it’s meaningful for a couple of reasons,” said Matt Kind, a Boulder entrepreneur and host of the CannaInsider podcast. “One in particular is when people are visiting Aspen and adjusting to a high altitude, some don’t drink for that first couple of days. And I think people are looking for something different from alcohol, which is essentially poison, and marijuana is botanical. I don’t say that with judgment, but you feel some lingering effects with alcohol.” –Aspen Times

    Aspen has six pot shops and five liquor stores, though one of the dispensaries closed last fall. 

    “I think it shows adults are open to change,” said Max Meredith, store manager at the Stash dispensary. “There are new substitutes, and they can be handled responsibly. And perhaps there are a few less late-night fights.”

    Despite fears that the cannabis industry would cannibalize alcohol sales, Aspen’s liquor stores are doing just fine – beating marijuana sales in December with nearly $1.6 million in sales vs. $1.2 million for pot. 

    When (legalized recreational marijuana) first came along, there were questions if it would hurt business,” Tom Ressel, day manager of the Local Spirits liquor store tells Summit Daily. “But obviously it hasn’t.”

    While that may be the case for Aspen – a study by Georgia State University Economics Professor, Alberto Chong, finds a 15 percent drop in alcohol sales which also allow medical marijuana sales over a 10 year period ending in 2015. 

    The study analyzed beer, wine and alcohol sales for over 2,000 U.S. counties using the Nielson Retail Scanner database, which they note provides a more accurate measure of alcohol consumption than self-reported surveys.

    “Our findings clearly show that these two substances act as strong substitutes in the marketplace,” Chong said, adding “This implies that rather than exacerbating the consequences of alcohol consumption—such as an increase in addiction, car accidents or disease risk—legalizing cannabis may temper them.”

    At the Green Dragon cannabis store, manager Kevin Doxtater said the latest sales tax figures show “people are waking up to this.” He and his co-workers added that cannabidiol — more widely referred to as CBD — has attracted a newer wave of retail consumers seeking medical benefits without getting high. Edible marijuana products also have been popular with the more discerning adults, while the younger set leans toward pre-rolled joints, he said. –Summit Daily

    See below for a breakdown of Aspen’s $730.4 million in retail sales last year

    • Accommodations $216.7 million
    • Restaurants & Bars $129.7 million
    • Clothing $57.3 million
    • Construction $57.2 million 
    • Food & Drug $56.1 million 
    • Miscellaneous $50 million 
    • Sports Equip/Clothing $47.9 million
    • Utilities $43.4 million
    • Luxury Goods $29.4 million
    • Automobile $20.8 million 
    • Marijuana $11.3 million 
    • Liquor $10.5 million
    • Total $730,414,351 

    Source: City of Aspen Finance Department

  • DOJ's #3 Official Quitting After Just Nine Months

    Update: U.S. JUSTICE DEPARTMENT NO. 3 OFFICIAL RACHEL BRAND TO BECOME EXECUTIVE AT WAL-MART: SOURCE

    where Hillary Clinton was on the board of directors.

    ***

    The number 3 official at the Department of Justice plans to leave the agency after just nine months on the job, the NYT reported citing two people briefed on her decision. 

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    Rachel L. Brand was appointed as Associate Attorney General on May 22, 2017, making her next in the line of succession after Deputy Attorney General Rod J. Rosenstein, who is currently overseeing Robert Mueller’s special counsel probe into Russian interference in the 2016 election. Attorney General Jeff Sessions has recused himself from the investigation due to his involvement with the Trump campaign. 

    Prior to her appointment to the DOJ last year, Brand held several politically appointed positions for the last few administrations. From 2012-2017, she served as one of five Senate-confirmed Members of the Privacy and Civil Liberties Oversight Board, appointed by President Obama.

    Before that, Brand worked at the DOJ between 2003-2007, first as the Principal Deputy Assistant Attorney General for the Office of Legal Policy, and then as the Senate-confirmed Assistant Attorney General for Legal Policy, appointed by President George W. Bush.

    Brand is also an Associate Professor of law at George Mason University’s Antonin Scalia Law School. She clerked for Associate Supreme Court Justice Anthony M. Kennedy from 2002-2003 after graduating from Harvard Law – where she was deputy editor-in-chief of the Harvard Jourrnal of Law and Public Policy.

    According to OpenSecrets.org, Brand has contributed heavily to Republicans – including George W. Bush, John McCain, Ted Cruz, Tom Cotton and Ed Gillespie. 

    What about Rosenstein?

    The release of the declassified GOP-authored “Nunes memo” earlier this month revealed that Rosenstein signed off on at least one questionable FISA surveillance warrant application in connection with spying on the Trump campaign.

    Rep. Ron DeSantis (R-FL), thinks Rosenstein will likely have to appear before Congress to explain his actions:

    I think Rosenstein is going to have to come to the Congress and explain his role in extending it, Mr. DeSantis said on Fox News. I mean, did he go back and review it and was satisfied, or he just extended? And is he going to be able to justify this as a proper use of FISA?

    When a reporter asked President Trump whether the Nunes memo makes it more likely that he will fire Rosenstein, Trump responded: “You figure it out.”

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    Democrats responded to the Nunes memo with a threat to unleash holy hell if Trump fires the Deputy AG:

    “We are alarmed by reports that you may intend to use this misleading document as a pretext to fire Deputy Attorney General Rod Rosenstein, in an effort to corruptly influence or impede Special Counsel Bob Mueller’s investigation.

    “We write to inform you that we would consider such an unwarranted action as an attempt to obstruct justice in the Russia investigation. Firing Rod Rosenstein, DOJ Leadership, or Bob Mueller could result in a constitutional crisis of the kind not seen since the Saturday Night Massacre!’

    So with a “compromised” Rosenstein overseeing the Mueller / Russia probe, and his successor apparently heading for the hills, one has to wonder what’s actually going on behind the scenes at the DOJ.

  • Deep State Mantra: Use An Existing Crisis… Or Create One

    Authored by Jeremiah Johnson (nom) via SHTFplan.com,

    Rahm Emmanuel was/is (in)famous for his alleged attribution of the quote “Never allow a good crisis to go to waste.” Nevertheless, in the manner that Chaucer’s “Canterbury Tales” is an “English echo” of “The Decameron” by Giovanni Boccaccio, the quote assigned to Emmanuel is a paraphrase of words emitted by the equally-nefarious Milton Friedman:

    “Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. That, I believe, is our basic function: to develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes politically inevitable.” – Capitalism and Freedom,” by Milton Friedman, Preface, Univ. Chicago Press, 1982.

    Although he was an Economist (so-called), Friedman’s Marxist economic endeavors (germinated by the Frankfurt School of Economics “alumni”) were cracked akin to a whip throughout the world and used by the U.S. to further imperialism and fostered dependence by third-world nations. Such “dependence,” it must be added, took the form of loans through the IMF and World Bank…backed by military force. The “dependence” is almost that of the Helsinki Syndrome, in which the kidnapped captive becomes psychologically dependent upon the captor…but the captivity remains. Protection and extortion in the same vein.

    These same “entangling alliances” were warned about for the fledgling United States by the Founding Fathers. Such forced alliances are easily seen for what they are: the creation of vassal states through force projection and intimidation. Even when we’re not directly involved, we “underwrite” the actions. The latest (and largest) prime example was the ousting of Ukraine’s president, Yanukovych, in 2014 and the attempt to force Ukraine to become a part of NATO, as well as another IMF-vassal in the NATO-Euro-hegemony.

    Such activities continue: in Syria, in Yemen, and throughout the world… a continued bolstering of U.S. military presence, backed by an ever-smiling line of “Rockettes” willing to “invest in a country’s future” with our almighty, fiat Petrodollar. Friedman’s actions as an economist can be seen enmeshed in virtually all U.S. foreign policy for the past five decades: they form the basis for the actions of “Economic Hit Men” as described by Perkins in his book.

    The coerced economic policies within the imperialism of American foreign policy are not the center of this piece.  Here is something relayed by Newsweek as reported by the New York Times on 2/2/18, an article entitled White House Pressures Pentagon for North Korea Attack Plan, Report Says, by John Haltiwanger that bears reading:

    “The White House is butting heads with the Pentagon on North Korea as senior military officials appear apprehensive about presenting President Donald Trump with military options against the rogue state, The New York Times reported Friday. White House National Security Adviser H.R. McMaster is reportedly concerned with drawing up a specific military plan in order to reinforce Trump’s various threats to the reclusive nation. Unnamed Pentagon officials are seemingly concerned the president is moving toward the use of force too quickly and worry that additional options will increase the probability Trump will move forward with an attack, according to the report.

    Dana W. White, press secretary for the Pentagon, told The New York Times the defense secretary “regularly provides the president with a deep arsenal of military options,” and claimed that the reports of reluctance in that regard were “false.”

    What can be gathered from this is the media is trying to paint a picture of confusion within the military command structure between the Pentagon and the administration. It is also more “predictive programming,” designed to “show” how the President wants a war: this to make him foot the blame when and if a war commences. Obviously, the United States and North Korea are still in a standoff with neither side backing away from their position. But just picture in your mind: the Emmanuel’s and the Friedman’s…smirking and smiling on the sidelines, knowing all this orchestration of the media is for the public to gulp down…knowing all of these crises have been acted upon by those of their ilk.

    We have a President who has ordered the release to the public of some very sensitive information on FISA (more appropriately labeled “DISA,” as the surveillance is directed toward the zeks formerly called “American citizens”).  An article came out on Lew Rockwell by former Justice Andrew Napolitano on 2/1/18 entitled Lying, Spying, and Hiding. Here is an excerpt of that article that I recommend reading in its entirety:

    “The abuse summarized in the Republican memo apparently spans the last year of the Obama administration and the first year of the Trump administration. If it comes through as advertised, it will show the deep state using the government’s powers for petty or political or ideological reasons.

    The use of raw intelligence data by the NSA or the FBI for political purposes or to manipulate those in government is as serious a threat to popular government — to personal liberty in a free society — as has ever occurred in America since Congress passed the Alien and Sedition Acts of 1798, which punished speech critical of the government.”

    So, to keep something from coming out of this magnitude, do you see the big picture?

    What is the best way to “deflect” attention from something such as this? War, naturally.

    I submit that the powers that be who are within the Deep State will either commence their lackeys to start a war or will create the conditions that will lead to one… not necessarily starting with North Korea, but possibly one of the other theatres where tensions with the U.S. are running high.

    I also submit that under such circumstances, it may not be the President who is responsible for the start of such a war: it may be a contrived crisis that the Deep State will not allow to go to waste that propels us into one. Nothing is beyond their capabilities, except to act with compassion and take into consideration the rights and welfare of the average citizen.

    The Deep State will allow millions to die in a war before being held accountable, especially to the American people.

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Today’s News 9th February 2018

  • Manhattan, London Housing Markets Are Suddenly Reeling

    When the latest reading on the Case-Shiller 20-City Composite printed within 1% of its record highs from 2006 a little more than a week ago, we asked a question that’s seemingly on every real-estate investors’ mind: Is this a “top” or a “breakout”?

    Case

    And with the effects of the Trump tax reform plan – which is expected to hammer real-estate markets, particularly in high-tax blue – having yet to take effect, already states – one early indicator that softness might be entering one of the country’s most iconic (and expensive) real estate markets was reported by Bloomberg today. To wit, the trend of landlords handing out rental concessions continued to intensify in January, as landlords are increasingly being pressured to hand out incentives like rent-free months or gift cards to entice potentially renters to sign on the dotted line. Concessions jumped to a record in January, with 49% of newly signed leases coming with some kind of incentive, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate.

    Manhattan

    That share surpasses the previous peak of 36% set just a month earlier.

    All of these concessions have caused the median rent to drop 3.6% from a year earlier to $3,141 – the biggest decline since October 2011 – interrupting six years of near-constant growth.

    “Landlords have finally realized, ‘OK, we have to adjust these prices because the concessions aren’t doing as much,'” said Hal Gavzie, who oversees leasing for Douglas Elliman. “Customers are looking past the concessions being offered and just looking for the best deals they can find.”

    Rents fell last month in almost every Manhattan neighborhood, including some of the borough’s priciest, Citi Habitats said in its own report. On the Upper West Side, the median was $3,450, down 2.8 percent from a year earlier. Rents in the West Village dropped 4.5 percent to $3,700, while on the Upper East Side, they declined 5.3 percent to $3,185, the brokerage said.

    “The dynamic has shifted,” with Brooklyn, Queens and the New Jersey waterfront becoming viable options to many renters,” said Gary Malin, president of Citi Habitats. “Tenants are looking for value, and they’re open to suggestions.”

    While these data strictly apply to the rental market, we pointed out last year, the commercial real-estate market is having problems of its own: In September, we noted that sales of commercial real-estate plunged 50%, bringing commercial property purchases to their lowest level since 2012. And that problem isn’t isolated to NYC: Sales of commercial real estate are plunging across the US, and have been since peaking at $262 billion nationally in 2015.

    And of course this was before HNA announced this morning that it would be liquidating $4 billion in US commercial real estate across New York City, San Francisco and Chicago and Minneapolis.

    * * *

    But Manhattan isn’t the only high-end luxury market showing signs of softness. In London, according to the Financial Times, the gap between what sellers are asking and buyers offering for high-end homes is greater than it was in either 2008 or 2009.

    But according to one real-estate market analyst, reality is beginning to set in for sellers.

    Marcus Dixon, head of research at LonRes, said buyers were becoming more confident in demanding discounts and sellers were ore likely to accept lower offers. “People are going in with relatively cheeky offers, and sellers are accepting them,” said Mr Dixon. “There’s a bit of realism creeping in about what properties are worth.”

    LonRes’s data cover London’s most exclusive districts, including Kensington and Chelsea, as well as prime parts of the capital extending from Canary wharf in the east to Richmond in the west and Hampstead in north London.

    Outside the most expensive “prime central” areas, discounts to initial asking price stood at just over 9% – the highest level since 2009.

     

    In a phenomenon that’s also manifested in some of America’s toniest zip codes – namely, Greenwich, Connecticut – some sellers are opting to take their homes off the market to wait for another day.

     

    Many sellers have resisted dropping the prices of their properties, instead choosing to withdraw them from the market. Transaction volumes fell across central London in 2017, with the number of properties sold down 3.6% over the year as fewer homes were put to the market.

    LonRes said people were still taking their homes off the market if they could not achieve their desired price. More than half the homes leaving the market in the fourth quarter of 2017 were withdrawn rather than sold.

    To be sure, some sellers are still accepting lower offers – but the post-crisis boom times are over, one real estate analyst said. And, as of now, there are few signs to suggest an imminent return.

    “There have been some transactions – but it’s not boom time,” said Mr. Scarisbrick. “It’s becoming obvious that you don’t set foot in the London market unless you really need a London house.”

    Foreign buyers, who are attracted by favourable exchange rates between sterling and most currencies, were an exception, he said.“You can do well if you roll your sleeves up and get involved in a proper negotiation,” he added.

    “But I can’t see any catalyst for a resurrection in the market.”

    Some sellers are opting to cut their losses.

    “Sellers are saying, ‘if I get a buyer at a reasonable level, I’ll do a deal,'” said Charles McDowell, who runs a prime London estate agency.

    “There are deals being done- quite big ticket deals – but this is certainly a market where buyers perceive value.”

    If there’s value to be found now – just wait another 14 months until April 2019, when the UK’s departure is expected to be complete.

    And with cryptocurrency prices tanking after last year’s bubble, the great crypto-fueled property boom has seemingly fizzled before it even began.

  • HUD Secretary Ben Carson Mused That "The Purge" Could Really Happen… And He's Not Wrong

    Authored by Daisy Luther via The Organic Prepper blog,

    The Washington Post recently published an article about Dr. Ben Carson, the Secretary of Housing and Urban Development. It started off mockingly, describing Carson’s theory that the movie The Purge could easily become really given a specific set of circumstances.

    If you aren’t familiar with it, The Purge franchise is a series of movies that take place in a dystopian not-so-distant future. In that future world, things are pretty similar to how they are right now – there aren’t any flying cars or AI robots serving breakfast – except for one night a year.

    And on that night, people can commit any crime without worry of punishment. Anything they do that night is legal, there are no first responders to save the victims, and there won’t be any court cases later.

    It was Christmastime in Washington, and Ben Carson couldn’t stop talking about the apocalypse.

    “Did you know,” the secretary of housing and urban development asked his acting chief of staff, Deana Bass, at a Capitol Hill holiday party, “that if North Korea detonated a nuclear weapon into our exosphere, it could take out our entire electrical grid?”

    Bass shook her head.

    “What’s that movie where there’s complete lawlessness and anarchy for one night a year?” Carson said, calmly resting his right hand over his left. “ ‘The Purge’! It will be like ‘The Purge’ all the time…” (source)

    And honestly, he’s not wrong. There are a lot of people out there who seem like they’d salivate at the chance to off their neighbors without any repercussions. One of the movies, The Purge: Election Year, seems particularly timely after the vitriol of the last presidential race.

    Crimes are becoming more shocking and brutal

    We have reached an era of extreme brutality and virulent hatred that I certainly haven’t seen in my lifetime. Recently, I wrote an article based on the essay of Sir John Grubb about the end of empires and discussed unfathomable crimes.

    Crimes are becoming more horrific and mindboggling. A 17-year-old girl was trying to walk home through a “no-go zone” in the UK and was sexually assaulted 3 separate times in one hour. A man in Pennsylvania tried to strangle his girlfriend to death because she changed the passcode to the IPad. A Georgia woman murdered her two toddler sons by putting them in the oven and then video-chatted their father.

    A Hollywood fixture has been accused of assaulting and harassing dozens of women, which led thousands of other women to share their horror stories with a #MeToo hashtag on Twitter. I have seen report after report recently of teachers having sex with their high school students.

    And things have become even more horrifying since then.

    Just in today’s headlines, I saw:

    And those crimes are a drop in the bucket. There are awful tales of such severe animal cruelty that I can’t get the headlines out of my mind. Tales of child abuse so mindblowing that it seems like they can’t possibly be real pop up every single day.

    Complete disrespect for the political beliefs of others is now not only the norm, but it’s praised. People can lose their jobs because they voted for the “wrong” candidate. Cars with certain political stickers get targeted for vandalism. People are actually killing one another over politics. This is no longer about discourse – it’s about shouting over the people with different views.

    In light of this environment, if it was totally legal to do away with people who were vocal about their different political philosophies, how far of a stretch is it to think that Dr. Carson is right about the potential of a Purge? Good people love to say how they would not participate, but if someone came for you and your family, you’d have no choice but to commit acts every bit as brutal as your attackers in order to survive.

    When will it end?

    Certainly, no time soon if we keep lumping people together because of who they voted for and assuming that we know everything about them based on the sticker on their back bumpers. We’ve had deeply controversial elections before and we managed to get past it, but when we generalize, we take away the humanity of the people we criticize.

    When all we do is group people into “evil Republicans” and “crybaby Democrats” we miss the finer qualities of these people. And there ARE good qualities in just about every person, no matter what their political beliefs are. Even if you think someone is delusional, it’s important to try to understand the position from which they developed that perspective.

    One has to wonder what it will take to bring us together. Dr. Carson strikes again with a movie reference.

    …“There’s never been a time in the history of the world where a society became divided like this and did well,” Carson said as a crowd — including an off-duty New York Times reporter, D.C. Mayor Muriel E. Bowser, a slew of representatives from housing nonprofit organizations and old friends from his presidential campaign — circled him. “And we don’t really have a reason to be fighting each other. There was a movie some years ago, a Will Smith movie called ‘Independence Day’ . . .”

    With his soothing, story-time cadences and heavy-lidded gaze, Carson proceeded to hold forth on how Earth’s near-annihilation laid bare the superficiality of all the world’s strife. If only, he argued, people realized that the fate of humanity hung in the balance, then Palestinians and Jews, or even the United States and Russia, could be “like best friends.” (source)

    How can we help each other from a place of scorn and derision? How can we come together when we deliberately divide ourselves every single day?

    Let’s hope it doesn’t take an alien invasion or epic disaster to make us mend fences. The time is coming when we’re going to need our neighbors and they’re going to need us. Hatred breeds nothing but more hatred and it’s only a matter of time before Dr. Carson is right about that whole Purge business.

  • FBI Sued Over Docs Related To Comey's $2 Million Book Deal

    Watchdog group Judicial Watch has filed a Freedom of Information Act (FOIA) lawsuit against the DOJ in order to obtain records from the FBI connected to former Director James Comey’s $2 million book deal, after the agency failed to respond to an August 14, 2017 FOIA request.

    In particular, the FOIA request concerns communications between Comey and the FBI leading up to his controversial June 2017 testimony before the Senate Intelligence Committee. The group seeks:

    • All records of communications between the FBI and Comey prior to and regarding Comey’s testimony before the Senate Select Committee on Intelligence on June 8, 2017.
    • All records of communications between the FBI and Comey relating to an upcoming book to be authored by Comey and published.
    • All records, including but not limited to forms completed by Comey, relating to the requirement for prepublication review by the FBI of any book to be authored by Comey with the intent to be published or otherwise publicly available.

    Comey reportedly received an advance in excess of $2 million for his bookHigher Loyalty: Truth, Lies, and Leadership, reportedly set for publication on April 17th. Former FBI agents and officials intending to write books concerning their tenure are customarily required to submit the entire transcript for pre-publication review.” – Judicial Watch

    Following Comey’s firing on May 9, 2017, the former FBI director sat down with Senate Select Committee investigators for a highly controversial testimony which covered, among other things, the circumstances surrounding his dismissal. 

    Also covered in testimony was the ongoing investigation into alleged Russian interference in the 2016 election, as well as Comey’s handling of the Hillary Clinton email investigation. 

    Comey admitted to leaking his “memos” to the Senate Select Committee in order to kick off the Special Counsel headed by former FBI Director Robert Mueller III.

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    “Mr. Comey seems to have protected status for any misconduct and we want to know if he had a special deal for his book from his friends in the FBI,” said Judicial Watch President Tom Fitton.

    “The Deep State is in cover-up mode. The FBI, DOJ, and the Special Counsel are stonewalling our requests for Comey documents.”

    Comey moved up the date of his memoir “Higher Loyalty: Truth, Lies, and Leadership,” from May 1 to April 17, according to publisher Flatiron Books – due to the FBI coming under “intense scrutiny.”

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    Flatiron president Bob Miller and publisher Amy Einhorn said there was demand for Comey to be heard amid an “urgent conversation” about the FBI, just one week after Comey blasted “weasels and liars” for pushing for the release a memo which alleges that top officials in the FBI and Department of Justice (DOJ) misled a federal surveillance court in order to obtain a spy warrant against a former Trump campaign adviser.Daily Caller

    The book is said to feature “yet-unheard anecdotes from his long and distinguished career,” according to Flatiron Books, which describes the book as an exploration of, get this: “what good, ethical leadership looks like and how it drives sound decisions.”

    “Throughout his career, James Comey has had to face one difficult decision after another as he has served the leaders of our country,” Flatiron Books publisher Bob Miller said, who added that the book will be an “unprecedented entry into the corridors of power, and a remarkable lesson in leadership itself.”

    As the House and Senate home in on bad actors in the FBI and DOJ, and career officials peel out of the agencies left and right – we eagerly await the blind boyscout’s book…

  • Exposing America's Hypocrisy On "Political Intervention" In Elections

    Authored by Mac Slavo via SHTFplan.com,

    The United States government has interfered with more elections than any other government on the face of the earth. 

    But suddenly, the US is grandstanding and pretending it matters that other nations use the exact same tactics.

    “Ah, the peddler propaganda!” says Joe Joseph with The Daily Sheeple while reading a headline declaring that Russians penetrated U.S. voter systems. “Say it ain’t so! A clandestine operation by a foreign government here in the United States? No. Couldn’t be!” he said sarcastically.

    The overly biased and left-leaning media attempted to portray this “interference” as a big deal. But as always, propaganda is easy to break down.

    The U.S. official in charge of protecting American elections from hacking says the Russians successfully penetrated the voter registration rolls of several U.S. states prior to the 2016 presidential election.

    In an exclusive interview with NBC News, Jeanette Manfra, the head of cybersecurity at the Department of Homeland Security, said she couldn’t talk about classified information publicly, but in 2016, “We saw a targeting of 21 statesand an exceptionally small number of them were actually successfully penetrated.” –NBC News

    Reading between the lines, all this means is pretty much nothing, other than the US government blatantly displaying their hypocrisy while interfering in the elections of other countries. Of course, the media is going to make a big story out of this. “We’re going to turn back the clock a little bit,” says Joseph.

    “The US is no stranger to interfering in the elections of other countries. So, since we’re into this whole Russia thing and Russia’s so bad and ‘shame on you, Russia’...well, let’s take a look at all the ways that the United States has interfered.”

    According to data gathered by the LA Times, the U.S. has a long history of attempting to influence presidential elections in other countries. The United States government has tried to manipulate as many as 81 elections between 1946 and 2000. According to a database amassed by political scientist Dov Levin of Carnegie Mellon University, that number doesn’t include military coups and regime change efforts following the election of candidates the U.S. didn’t like, notably those in Iran, Guatemala, and Chile. Nor does it include general assistance with the electoral process, such as election monitoring.

    Levin defines intervention as “a costly act which is designed to determine the election results [in favor of] one of the two sides.” These acts, carried out in secret two-thirds of the time, include funding the election campaigns of specific parties, disseminating misinformation or propaganda, training locals of only one side in various campaigning, or get-out-the-vote techniques, helping one side design their campaign materials, making public pronouncements, or threats in favor of or against a candidate, and providing or withdrawing foreign aid.

    “There’s plenty of history here to show that we’ve been involved in intervening in foreign elections. We did it more than anybody else! So, why should we be surprised when other countries do it to us,” says Joseph.  Again, keep in mind, the election interference was incredibly menial in comparison to the US’s previous manipulations.

    You need to be able to “see and understand the propaganda coming from NBC and the mainstream television media.” In case you haven’t figured it out yet, most of the mainstream media is straight up propaganda with the minds of Americans and public opinion being manipulated every second. This has been admitted by the media, yet the public continues to be largely unaware that they are being controlled.  In fact, the US media tried very hard to manipulate public opinion in the 2016 election.  It’s become more than obvious unless you’re one who has been manipulated.

    “It’s easier to fool people than convince them that they’ve been fooled.” -Unknown, but often attributed to Mark Twain

  • Here Is Goldman's Annotated Chart Showing The History Of Bitcoin

    Goldman has long had a love, hate relationship with bitcoin: while JPM’s Jamie Dimon was slamming it and threatening anyone caught trading it with termination, Lloyd Blankfein was planning the rollout of a cryptotrading desk. While other brokerages were shunning futures trading, Goldman told clients “your money is welcome here.” On the other hand, from a purely fundamental standpoint, Goldman was more ambivalent, unwilling or unable to embrace the currency, yet laying out under what conditions it may succeed as money, which nonetheless was a far cry from JPM’s blanket determination that bitcoin is a pyramid scheme.

    Then, this morning, the market awoke to a Goldman report that was released on Monday evening, in which as we reported earlier, Steve Strongin – Head of Goldman’s Global Investment Research – said that the current generation of cryptocurrencies is unlikely to survive even if blockchain technology endures:

    Whether any of today’s cryptocurrencies will survive over the long run seems unlikely to me, although parts of them may evolve and survive…. To my eye, they still seem too primitive to be the long-term answer.

    Asked if the market is accurately pricing the likelihood that several—if not most—of the current cryptocurrencies will ultimately fail?, his answer was surprisingly pessimistic:

    I don’t believe it is. People seem to be trading cryptocurrencies as though they’re all going to survive, or at least maintain their value. The high correlation between the different cryptocurrencies worries me. Contrary to what one would expect in a rational market, new currencies don’t seem to reduce the value of old currencies; they all seem to move as a single asset class. But if you believe this is a “few-winnerstake-most” situation, then the potential for retirement depreciation should be taken into account. And because of the lack of intrinsic value, the currencies that don’t survive will most likely trade to zero.

    To be sure, Goldman did highilight some of the notable highlights of bitcoin, chief among which is the unprecedented value storage density, which is why Goldman’s commodity chief proposes calling them not cryptocurrencies but rather cryptocommodities.

    Despite being called cryptocurrencies, bitcoin and other digital assets are better described as “cryptocommodites.” A financial security—currencies included—has a claim or liability attached to it, as it is “secured” to an underlying real asset. Just as equity is secured to the future earnings of a real company, a dollar bill is secured to the US government and its tax revenue. In contrast, commodities have no obligation or liability to any government, company, or other entity. Given that bitcoin has no liability to any entity, it is a good like any other commodity. Bitcoin just happens to be the first digital commodity—in contrast to financial assets and money, which have long been digitized.

    In most economies, a standard digital bank account provides ease of storage, secure transactions, and a positive carry. However, it is still a claim on a bank, and the funds cannot be concealed and transported without alerting regional authorities. To the extent that this is a problem, bitcoin solves it better than any other commodity (although other cryptocurrencies are starting to offer superior privacy and anonymity). This suggests that black markets and less developed regions without a reliable banking system would be the obvious sources of demand for cryptocurrencies.

    But the most remarkable feature of cryptos: how much value they can concentrate in virtually no physical space.

    Unlike other storage commodities like oil, gold, platinum, diamonds, and even cash, there is no need to hold much physical material to own bitcoin; even a technology as obsolete as the 3½ inch floppy disk can hold almost 30,000 private keys. There is no theoretical upper limit to the value of bitcoins in a wallet, but if we assume each wallet secured by this disk contains as much as the largest wallet today (180,000 BTC), this single disk could “hold” all bitcoins in existence and remain less than 0.5% full. Assuming a bitcoin market cap of roughly $190bn (as of late January), this disk would be the equivalent to either: 95% of the 4,583 tons of gold in Fort Knox, or 1,344 Very Large Crude Carrier supertankers of oil.

    Goldman’s conclusion:

    On net, cryptocurrencies have superior physical attributes relative to other commodities for concealing and transporting large amounts of wealth, which could be valuable in dark markets and some areas that lack reliable banking systems. But a long list of hurdles remains for cryptocurrencies to reach the equivalence of precious metals in financial markets, and these will be difficult to overcome anytime soon. In the meantime, we believe gold still offers the best store of wealth given how institutionalized it has become over 3,000 years of active trading versus five years for bitcoin.

    So bitcoin… or gold? To Goldman that is the question. Meanwhile, for your viewing pleasure, here is Goldman’s chart showing the annotated history of bitcoin’s Rise… and recent fall. The question is what happens next.

  • US Contagion Accelerates – China Big Caps Crash Over 7%, Worst Week Since Lehman

    Update 0950ET: Things went from bad to worst very fast…

    • *CHINA H-SHARE INDEX SLIDES 5%
    • *SHANGHAI COMPOSITE INDEX DROPS 5.3%
    • *CHINA SSE 50 INDEX OF BIG CAPS DROPS 7.5%
    • *TENCENT DROPS 5.1% TO TRADE BELOW HK$400

     

    This is the big caps worst day since the Aug 2015 devaluation crash, and the worst week (unless The National Team steps in) since Lehman…

     

    *  *  *

    After an insane winning streak in December and January, the Hang Seng has plummeted in the last few days and along with the rest of the major mainland China equity markets – has entered correction.

     

    2018 started off so well in China…

     

    But after an almost incessant ramp, China and Hong Kong stocks have crashed back to reality in the last few days…

    Shanghai Composite is now at 7-month lows…

     

    And Hang Seng is down 12% from its highs, back below 30,000…

    The Yuan remains on edge as it tumbles most since the Aug 2015 devaluation…

     

    And across the water, Japanese stocks are down 13% from their highs…

  • "Worst Case" Confirmed: Biggest Weekly Fund Outflow In History

    If it seems like it was just a few days ago  that we reported of the biggest ever inflow into equities, it’s because that’s precisely when it happened. It was then that according to BofA CIO Michael Hartnett, we observed a “non-stop euphoria cabaret” in which markets saw a record $33.2bn inflow to equity funds, record $12.2bn inflow to active funds, $1.5bn into gold (50-week high), as well as record inflows to tech & TIPS.

    Incidentally, that was the day the S&P hit its all time high, and more importantly, the day BofA also said that its euphoria and panic-buying driven “sell signal” was just triggered for the first time in 5 years, and predicted a 12% selloff in the next three months.

    In retrospect, it took just two weeks because that post marked the peak of the market, and it has been non-stop selling since.

    But much more troubling than the selling, is the composition: after all, as we showed earlier, the “worst case scenario” according to both JPMorgan and Morgan Stanley is if the liquidation panic was not just systematic funds and various quants puking as a result of the surge in the VIX, but if ordinary retail investors had also joined in: that would be a nightmare outcome for the bulls, as it would mean that the sharp but concentrated relentless selloff, had spread to the broader investing world, and institutions would have no choice but to join.

    Specifically, this is what JPM said over the weekend when observing the recent record fund inflows:

    If these equity ETF flows start reversing, not only would the equity market retrench, but the resultant rise in bond-equity correlation would likely induce de-risking by risk parity funds and balanced mutual funds, magnifying the eventual equity market sell-off.

    And then there was Morgan Stanley:

    Today’s moves lower are likely not being driven by systematic supply – this appears to be more discretionary selling. Systematic supply from vol target strategies is largely out of the way now, while consensus trades are getting hit:  NDX is underperforming SPX, momentum is down 1%, and the Passive Factor is up, indicating actively held names are underperforming names better held by passive funds.

    Well, we now have confirmation.

    According to the just released EPFR weekly fund flow data, what was just two weeks ago a record equity inflow has become a record equity outflow, as the 10% drop in the US stock market has officially launched a selling panic.

    As Citi writes tonight, “in the week of 2/7/2018, bond funds had an inflow of US$4.0bn and equity funds lost US$30.6bn to outflows. This was the largest outflow on record from equity funds, which just had their record high inflow of US$33.2bn only two weeks ago. The largest outflow had come from US funds which saw US$32.9bn of outflow. “

    Stated simply, this means that one no longer needs the VIX ETN, CTAs or risk pars to launch a liquidation panic: one has already begun, and retail is panicking, desperate to get out of stocks.

    Which means that a full on bear market is now in the hands of just two players: institutions, and corporations. In other words, if hedge and mutual funds dont step up, and if companies don’t unleash a buyback tsunami, it’s about to turn very ugly.

  • Infrastructure Emergency: 50,000 American Bridges Are "Structurally Deficient"

    Last week, President Trump announced his proposal for a $1.5 trillion infrastructure program in his State of The Union address to the American people. He failed to mention that over the next decade, the federal government would provide very little money whatsoever for America’s crumbling bridges, rails, roads, and waterways.

     

    In fact, Trump’s plan counts on state and local governments working in tandem with private investors to fork up the cash for projects.

    In overhauling the nation’s crumbling infrastructure, the federal government is only willing to pledge $200 billion in federal money over the next decade, leaving the remainder of $1.3 trillion for cities, states, and private companies.

    Precisely how Trump’s infrastructure program would work remains somewhat of a mystery after his Tuesday night speech, as state transportation officials warned that significant hikes to taxes, fees, and tolls would be required by local governments to fund such projects.

    To get an understanding of the severity of America’s crumbling infrastructure. The American Road & Transportation Builders Association (ARTBA) has recently published a shocking report specifying more than 50,000 bridges across the country are rated “structurally deficient.

     

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    If the “structurally deficient” bridges were placed end-to-end, they would stretch 1,216 miles or nearly the distance between Miami and New York City, said ARTBA. Cars, trucks, and school buses cross these 54,259 compromised structures more than 175 million times per day, which it is only a matter of time before another Mississippi River Bridge collapse occurs.

    Here are the highlights from the report: 

    • 54,259 of the nation’s 612,677 bridges are rated “structurally deficient.”
    • Americans cross these deficient bridges 174 million times daily.
    • Average age of a structurally deficient bridge is 67 years, compared to 40 years for non-deficient bridges.
    • One in three (226,837) U.S. bridges have identified repair needs.
    • One in three (17,726) Interstate highway bridges have identified repair needs.
    • Website features listing of deficient bridges by state and congressional district.

    Dr. Alison Premo Black, chief economist for the American Road & Transportation Builders Association (ARTBA), who conducted the analysis, said, “the pace of improving the nation’s inventory of structurally deficient bridges slowed this past year. It’s down only two-tenths of a percent from the number reported in the government’s 2016 data. At current pace of repair or replacement, it would take 37 years to remedy all of them. ” 

    Black says, “An infrastructure package aimed at modernizing the Interstate System would have both short- and long-term positive effects on the U.S. economy.”

    She adds that traffic jams cost the trucking industry $60 billion in 2017 in lost productivity and fuel, which “increases the cost of everything we make, buy or export.”

    Other key findings in the ARTBA report:

    • Iowa (5,067), Pennsylvania (4,173), Oklahoma (3,234), Missouri (3,086), Illinois (2,303), Nebraska (2,258), Kansas (2,115), Mississippi (2,008), North Carolina (1,854) and New York (1,834) have the most structurally deficient bridges. 

    • The District of Columbia (8), Nevada (31), Delaware (39), Hawaii (66) and Utah (87) have the least.

    • At least 15 percent of the bridges in six states – Rhode Island (23 percent), Iowa (21 percent), West Virginia (19 percent), South Dakota (19 percent), Pennsylvania (18 percent) and Nebraska (15 percent)—fall in the structurally deficient category.

    As Staista’s Niall McCarthy notes, U.S. drivers cross those bridges 174 million times a day and on average, a structurally deficient bridge is 67 years old. Dr. Alison Premo Black carried out the analysis for the ARTBA and she has said that if things continue at their current pace, it would take 37 years to repair all of the bridges that need attention. With a total of 5,067 of them, Iowa has the most structurally deficient bridges, followed by Pennsylvania (4,174) and Oklahoma (3,234).

    Infographic: Thousands Of American Bridges Are Falling Apart  | Statista

    You will find more statistics at Statista

    Here are the most traveled “structurally deficient” U.S. bridges in 2017:

    In 2007, the I-35W Mississippi River Bridge in Minneapolis collapsed during an evening rush hour commute, sending cars and trucks diving into the river. Thirteen people were killed and 145 were injured. The incident served as an eye opener to America’s deteriorating infrastructure. Ten years later, not much progress has been made in America’s bridges.

    President Trump has undoubtedly over-hyped his proposal for a $1.5 trillion infrastructure program, but for the 50,000 “structurally deficient” bridges across America, it is a race against time for the Trump administration, before the next bridge collapses triggers a mass causality event. We are almost positive this administration does not want this on their plate.

    “Every federal dollar should be leveraged by partnering with state and local governments and — where appropriate — tapping into private sector investment to permanently fix the infrastructure deficit,” Mr. Trump said in his State of the Union address.

  • Government Shutdown Now Certain: Next House Vote After Deadline

    For the second time in one month, the US government will be shut down… if only for 3-6 hours, and potentially much longer.

    As we explained earlier, a last minute Senate vote to approve the bipartisan “budget-busting, cap-lifting, debt-ceiling extending” two year budget deal is on hold at the moment as Kentucky Sen. Rand Paul prevents its advancement. Furthermore, as discussed earlier, the White House has instructed critical agencies to begin shutdown preparations for a government shutdown should a deal not be reached before midnight when the funding lapse expires.

    This now appears certain because as Bloomberg reports, according to House majority whip Steve Scalies, “At this point, we expect next votes in the House to occur at very roughly 3:00-6:00 a.m.”

    And since midnight is the deadline for a deal, that would guarantee at least a short U.S. government funding lapse, and potentially a protracted one if for some reason the scheduled vote is once again delayed.

    As a reminder, uber-deficit hawk, Rand Paul has been pushing for an amendment to maintain budget caps, but Senate sources say leaders have no plan to give Paul such a concession, meaning that he can continue to prevent a vote until after midnight, when government funding runs out.

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    When the Senate eventually gets to a vote – some time on Friday morning, the measure will likely have enough support to pass. However, and this is where things get tricky, even if the Senate approves the legislation Thursday night, a suddenly divided House, where Nancy Pelosi’s Dreamer stunt has stumped her Democratic colleagues, still needs to pass it and get it to President Donald Trump’s desk.

    In other words, today was bad for the market. Tomorrow could be much worse.

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Today’s News 8th February 2018

  • Three Top Russian Officials (Quietly) Visit United States

    Authored by Alex Gorka via The Strategic Culture Foundation,

    Nothing like this ever happened even at the best of times.

    The heads of three Russian intelligence agencies all visited the US simultaneously. This is an extraordinary and unprecedented event, especially at a time when that relationship has so greatly deteriorated. Sergei Naryshkin, the foreign intelligence chief, Alexander Bortnikov, who heads the Federal Security Service, and Lieutenant General (two stars) Igor Korobov, the head of Russia’s military intelligence, visited Washington in late January. Not much has been leaked to the media but it was reported that they met with CIA Director Mike Pompeo. There was no secrecy about the visit or attempts to hush it up. The Russian ambassador to the US, Anatoly Antonov, mentioned the event on television. He claimed that the visit had been a success and that despite the extreme tension between the two countries, their intelligence agencies were continuing to cooperate. As he put it, “Politics is politics, work is work. There are political proclamations, and there is real work.”

    At least one of the Russian visitors is affected by the sanctions constraints. Obviously, President Donald Trump permitted the visit, as he is the only one who is authorized to temporarily waive those restrictions. No doubt there was a discussion of the terrorist threat posed by the Federal Security Service, but that team was headed by Mr. Naryshkin. The negotiations over the joint efforts to counter international terrorism could have been held anywhere. Such contacts between intelligence agencies do not require the top officials to head the delegations. Thus one must conclude that the talks addressed a much broader agenda – there must have been something really significant to discuss, with an agenda not limited to just one or two issues.

    There was a particular context for this event.

    It’s important to note that Kurt Volker, the US Special Representative for Ukraine, and Vladislav Surkov, the Russian president’s top aide, also met in late January in Dubai. The American official is known for his stints at the CIA. Many observers found it rather surprising that President Trump did not say anything critical about Russia in his remarks at the Davos World Economic Forum on Jan. 26. During his stay in Switzerland, the US president was too busy to meet Ukrainian President Poroshenko but managed to find time for talks with his “friend” Rwandan President Paul Kagame! The long- awaited “Kremlin List” was nothing but a meaningless administrative step.

    There have been reports that Washington has been seeking ways to improve ties. The two countries’ top military leaders met last September to discuss Syria. More such events are planned for the future. The two foreign-office chiefs regularly hold private meetings. And Feb. 5 was an important date – both parties reported they had met their obligations under the New START Treaty.

    This is the moment when the tide is starting to turn, as President Trump is seeing some success from his efforts to undermine public confidence in the Russiagate investigation. The president is going on the offensive. Donald Trump has given permission to release a memo, which alleges that there was an abuse of power by the FBI and the Justice Department in the investigation into Russia’s alleged meddling in the US presidential election. The document shines a light on the role of the “deep state” in America and its influence on the media. It provides a clue about who raised the hullabaloo over “Russiagate” and why, and shows that they are ready to go to any length to spoil the US relationship with Moscow and jam a spoke into Donald Trump’s wheel.

    With the economy surging, the US president felt strong enough to approve the visit. This shows, better than any other example, that Russia is too important not to talk to. The two powers need to be engaged in dialog and the issues are too vital to ignore or sweep under the rug. President Trump has never shied away from claiming that he wants to repair that relationship. In his own words, “Putin is very important.” It’s an open secret that personal chemistry between leaders can play a very significant role in kick-starting the reconciliation process. With the memo released and “Russiagate” going nowhere, the president may have more supporters in Congress after the 2018 midterm elections. The US policy on Russia may be one of the things to change.

    The odds are slim of Russia and the United States becoming close partners. This makes engagement, “deconfliction,” and interaction in certain areas even more important. The contacts between the intelligence chiefs indicate that the parties are serious about bringing about positive changes. We may never know what the officials talked about, but the very fact of the meeting speaks for itself. It really is impossible to underestimate its importance. Looks like there might well be a light at the end of the tunnel.

  • Tesla Building 250MW "Virtual Solar Power Plant" Using 50,000 Homes In Australia

    After building the world’s largest lithium battery in Australia nearly 40 days ahead of schedule, Tesla has announced plans to build the world’s largest “virtual power plant” by outfitting 50,000 homes in South Australia with solar panels and Tesla battery storage units over the next four years, slashing participants’ energy bill by 30%.

    Beginning with a trial of 1100 Housing Trust properties, a 5kW solar panel system and 13.5kWh Tesla Powerwall 2 battery will be installed at no charge to the household and financed through the sale of electricity.

    Following the trial, which has now commenced, systems are set to be installed at a further 24,000 Housing Trust properties, and then a similar deal offered to all South Australian households, with a plan for at least 50,000 households to participate over the next four years. –ourenergyplan.sa.gov.au

    Over 6,500 households have already applied for the 250MW program (which will provide the panels for free), tweeted South Australian Premier Jay Weatherill on Monday.

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    The AUD$32 million ($25 million USD) project bankrolled by taxpayers and a state-funded techonlogy grant will be recovered by selling the electricity to customers on the grid. “We will use people’s homes as a way to generate energy for the South Australian grid, with participating households benefiting with significant savings in their energy bills,” says South Australia’s premier Jay Weatherill. “More renewable energy means cheaper power for all South Australians.”

    Price predicts utility bills for participating households will be slashed by 30%. The installations will begin with 100 households in a low-income housing community. Those systems should be completed by the end of June. Then another 1,000 systems will be installed in similar properties by the end of the year.

    After that, another 24,000 Housing Trust residents will be offered the opportunity to join the program, followed by 25,000 more households over the next 4 years. Minister for Social Housing Zoe Bettison said the decision to install the systems in Housing Trust homes would assist the most vulnerable. “We know that people in social housing can often struggle meeting their everyday needs and this initiative will take some pressure off their household budget,” she said. –cleantechnica.com

    South Australia’s 1.7 million residents regularly suffer power outages and energy reductions, with several major incidents leaving people without power following storms and a massive heat wave. 

    Off to a good start

    Tesla’s lithium battery storage project has already proven its worth; after the 129 MWh installation was activated on December 2, the Loy Yang coal power plant – one of the largest in Australia, went offline – depriving the grid of 560 MW of electricity, enough for 170,000 homes. Within 140 milliseconds, the Tesla “Hornsdale Power Reserve Battery System” kicked in, providing the grid with 100 MW of power – buying grid operators enough time to reroute other power sources and make up for the shortfall. Utility customers were largely unaffected. 

    That’s a record and the national operators were shocked at how quickly and efficiently the battery was able to deliver this type of energy into the market,” said State energy minister, Tom Koutsantonis, who added “Until now, if we got a call to turn on our emergency generators it would take us 10 to 15 minutes to get them fired up and operating which is a record time compared to other generators.”

  • Trump Administration To Test Biometric Program To Scan Faces Of Drivers

    Authored by Derrick Broze via ActivistPost.com,

    The U.S. Customs and Border Protection is preparing to launch a pilot program to scan the faces of drivers and passengers at Anzalduas Port near McAllen, Texas.

    On Thursday the U.S. Customs and Border Protection announced plans for a new pilot program that will test out biometric facial recognition technology as part of an effort to identify fugitives or terror suspects. The Austin-American Statesman reported on the announcement:

    Thanks to quantum leaps in facial recognition technology, especially over the past year, the future is arriving sooner than most Americans realize. As early as this summer, CBP will set up a pilot program to digitally scan the faces of drivers and passengers — while they are in moving vehicles — at the busy Anzalduas Port of Entry outside of McAllen, the agency announced Thursday.

    The Texas-Mexico border is being used as the testing grounds for the technology. The results of the pilot program will be used to help roll out a national program along the entire southern and northern borders. The Statesman notes that the Department of Energy hired researchers at Tennessee’s Oak Ridge National Laboratory to help overcome the difficulties of using facial recognition technology on moving vehicles. The researchers developed a method for combating window tinting and sun glare which can make a vehicle’s windows impenetrable to cameras. The facial recognition technology being developed for the pilot program will be capable of identifying the driver, front passengers, and the passengers riding in the back.

    The CBP currently operates facial recognition exit programs at almost a dozen international airports in the United States. Colleen Manaher, the CBP’s executive director of planning, program analysis and evaluation, told the Statesman that travelers have been accepting of the technology and noted that “we can thank the Apples and the Googles for that.”

    Although the CBP claims implementing facial recognition technology could eventually eliminate the need for passports, boarding passes and other travel documents, the technology is without a doubt an invasion of privacy. Both the Electronic Frontier Foundation and Georgetown University’s Center on Privacy and Technology have called for further investigation into the potential dangers of a massive facial recognition apparatus. In the U.S., only Texas and Illinois have laws preventing the use of biometric data for commercial purposes.

    The new Texas pilot program is only the latest effort by the federal government to implement a wide range of biometric and surveillance programs around the United States.

    In August 2017 Activist Post first reported on the plans to launch a national program scan the faces of all airline passengers in the U.S. Customs and Border Protection launched a “Traveler Verification Service” (TVS) that intends to use facial recognition on all airline passengers, including U.S. citizens, boarding flights exiting the United States. That same month it was reported that thirty-one sheriffs along the U.S.-Mexico border voted unanimously to adopt tools that will allow the collection and storing of iris scans.

    Additionally, Activist Post just last week reported that the U.S. Immigration and Customs Enforcement (ICE) agency now has access to a nationwide license plate recognition database after finalizing a contract with the industry’s top license plate data collection company. This database allows ICE to search a vehicles whereabouts over the last five years, as well as developing “hot lists” that can track particular vehicles indefinitely.

    The U.S. Immigration and Customs Enforcement is currently facing a lawsuit for failing to release records related to the agency’s use of devices to gather biometric data from immigrants. Mijente and the National Immigration Project of National Lawyers Guild are asking a federal court to force ICE and the Department of Homeland Security to release information related to the use of handheld devices used to gather biometric data from immigrants during raids.

    These programs are reminiscent of mass surveillance systems established in Russia and China.

    The truth of the matter is that all three nations are taking different paths towards the same goal: control and monitoring of their population and suppression of critical thought or opposition. The only way to stand against this is to refuse to fund the programs at every turn and sharing the information. It might be too late to stop the establishment of these programs, but the people could potentially form enough of a resistance to establish free communities and neighborhoods where these invasive technologies are rejected.

  • Yuan Is Crashing After Huge China Trade Surprise

    China’s overseas shipments held up (exports +11.1% YoY in USD terms) despite the stronger yuan and rising trade tensions with the U.S., but it was the imports that stunned many, rising 36.9% YoY in USD terms, slamming the trade surplus well below expectations.

    In Yuan terms the spike in imports was just as impressive…

    In USD terms, the China trade balance printed $20.34bn, well below the $54.65bn expectation and collapsing from last month.

    Perhaps in an effort to show there is no trade war, January exports to U.S. rose 7.5%, but ‘friendly’ imports surged 20.5% on the year.

    While coal (colder than normal) and oil imports (record) surged in January more than expected, it is crucial to understand that the Lunar New Year, which began earlier in 2017, may have distorted the data notably.

    Nevertheless, stocks extended their losses on the data…

     

    But the big impact is extending the losses from the US session in the Yuan as it crashes 5 handles after the data…

    Offshore Yuan is now down over 11 handles on the day and down 1.5% in the last two days.

    It would appear all bets are on again for another devaluation.

    Today is actually the biggest drop in the Yuan since the Aug 2015 devaluation (and remember what ripples that sent through global markets)

  • Paul Craig Roberts Exposes The Plunge Protection Team's Fraud

    Authored by Paul Craig Roberts,

    After the extraordinary sudden loss in equity values, the last two days brought gains back to the stock indices (albeit with a late day tumble today).

    What happened? Did the market sneeze, cough, or was something misread and today perceived in a different light?

    In my opinion this is what happened:

    The Plunge Protection Team, as they have done on previous equity market drops, or the Federal Reserve operating for the Working Group on Financial Markets, sent a purchase order for S&P futures to the trading floor. The hedge funds, seeing the incoming bid, front-ran the bid by stepping in and buying S&P futures. This pushed the market back up, ended the correction, and prevented financial panic.

    The Plunge Protection Team was created in 1987, approaching the end of the Reagan administration, in order to prevent a market correction from costing George H. W. Bush the presidential election as Reagan’s successor. The Republican Establishment was desperate to reestablish its control over the party. The Republican Establishment, convinced by Wall Street that the Reagan tax cut would result in high inflation, found themselves instead confronted with a long economic expansion. In those days that meant that the expansion could be nearing its end, and a stock market correction could deny the presidency to George H.W. Bush.

    To prevent any such correction, the US Treasury and Federal Reserve created a “working group” to intervene in the stock market in order to support values. Whenever the market starts to drop, the team purchases S&P futures which halts the market decline.

    We have witnessed this on several occasions. And, most likely, again this week.

    Pundits who speak about “market forces” are speaking about something that doesn’t exist. “Market forces” are the interventions that support existing values with money infusions.

    How long can the fraudulent valuation of equities continue?

    My sometimes coauthor Dave Kranzler and I think it can continue until the dollar as reserve currency comes under attack. Neither of us believed that the fraud could be perpetrated this long. The two other world powers, Russia and China, are moving away from use of the US dollar, but the consequence for the dollar could still be in the future. In the meantime, liquidity supplied by central banks and the interventions of the Plunge Protection Team could send equity prices higher.

  • Uber CIO : We Were Wrong To Pay Hacker $100,000 And Cover Up Breach Of 57 Million Accounts

    Testifying in front of Congress on Tuesday, Uber CIO John Flynn said that there was “no justification” for the company covering up a massive 2016 breach by hackers from Canada and Florida which affected 57 million accounts.

    John Flynn, Uber CIO

    I think we made a misstep in not reporting to consumers, and I think we made a misstep in not reporting to law enforcement,” said Flynn.

    The CIO also said that it was inappropriate to have paid one of the hackers $100,000 through a “bug bounty” program to destroy the stolen data. The bounty program offers financial rewards to anyone who identifies vulnerabilities.

    Flynn confirmed the man who obtained data from Uber was in Florida and that his partner, who first contacted the company on Nov. 14, 2016, to demand a six-figure payment, was located in Canada. The company’s security team made contact with both people and received assurances the pilfered data had been destroyed before paying the intruders $100,000, Flynn said. –Reuters

    We recognize that the bug bounty program is not an appropriate vehicle for dealing with intruders who seek to extort funds from the company,” Flynn said in his written testimony. “The approach that these intruders took was separate and distinct from those of the researchers in the security community for whom bug bounty programs are designed.”

    Of the 57 million user accounts were compromised last November, 25 million were located in the United States. Of those, 4.1 million were Uber drivers, according to Flynn’s testimony. The hackers were able to obtain names, addresses and drivers license numbers. 

    Lawmakers on the Senate Commerce consumer protection subcommittee railed against the company over how it handled the breach.

    The fact that the company took approximately a year to notify impacted users raises red flags within this Committee as to what systemic issues prevented such time-sensitive information from being made available to those left vulnerable,” said subcommittee chairman Sen. Jerry Moran (R-KS).

    There ought to be no question here that Uber’s payment of this blackmail without notifying consumers who were greatly at risk was morally wrong and legally reprehensible and violated not only the law but the norm of what should be expected,” added Sen. Richard Blumenthal (D-CT).

    Blumenthal also noted that Uber was in the process of negotiating a settlement with the Federal Trade Commission over an earlier, smaller breach and charges of deceptive privacy claims – while covering up the giant breach from November 2016. 

  • Brandon Smith: Is A Massive Stock Market Reversal Upon Us?

    Authored by Brandon Smith via Alt-Market.com,

    I have been saying it for years and I will say it again here – stocks are the worst possible “predictive” signal for the health of the general economy because they are an extreme trailing indicator. That is to say, when stock markets do finally crash, it is usually after years of negative signs in other more important fundamentals.

    Of course, whether we alternative analysts like it or not, the fact of the matter is that the rest of the world is psychologically dependent on the behavior of stock markets. The masses determine their economic optimism  (if they are employed) according to the Dow and the S&P and, to some extent, by official and fraudulent unemployment statistics. When equities start to dive, society takes notice and suddenly becomes concerned about fiscal dangers they should have been worried about all along.

    Well, it may have taken a couple months longer than I originally predicted, but it would seem so far that a moment of revelation (that slap in the face I discussed a couple weeks ago) is upon us. In less than a few days, most of the gains in global stocks for 2018 have been erased. The question is, will this end up as a “hiccup” in an otherwise spectacular bull market bubble? Or is this the inevitable death knell and the beginning of the implosion of that bubble?

    After I predicted the election of Donald Trump, I also predicted that central banks would begin pulling the plug on life support for equities markets. This did in fact take place with the Fed’s continued program of interest rate increases and the reduction of their balance sheet, which effectively strangles the flow of cheap credit to banking and corporate institutions that fueled stock buybacks for years. Without this constant and ever expansionary easy fiat, there is nothing left to act as a crutch for stocks except perhaps blind faith. And blind faith in the economy always ends up being smacked down by the ugly realities of mathematics.

    I believe the latest extraordinary dive in stocks is NOT a “hiccup,” but a sign that “contagion” is still a thing, and also a trailing sign of instability inherent in our fiscal system. Here are some reasons why this trend is likely to continue.

    Historic Corporate Debt Levels

    As mentioned above, artificially low interest rates have allowed corporations incredible leeway to manipulate stock markets at will using stock buybacks and other methods.  However, there are still consequences for this strategy.  For example, corporate debt levels are now at historic annual highs; far higher even than debt levels just before the crash of 2008.

    If this doesn’t illustrate the falseness of the so called “economic recovery”, I don’t know what does.  Beyond that, what happens as the Fed continues to raise interest rates and all that debt held by the “too big to fails” becomes vastly more expensive?  Well, I think we are seeing what happens.  Over time, faith in the corporate ability to prop up equities will erode, and a considerable decline is built directly into the farce.

    Price To Earnings Ratio

    In some of her final statements upon stepping down as the head of the Federal Reserve, Janet Yellen had some choice comments about the state of equities markets. These included statements that stock market valuations were high and that the price-to-earnings ratio of the S&P 500 (the ratio of stock values versus actual corporate earnings per share) were at a historical peak. This fits exactly with the policy shift I warned about in 2017, and my assertion that Jerome Powell will be the Fed chairman to oversee the final crash of the post-bailout market bubble.

    The spike in P/E ratios is not only taking place in U.S. markets. For example, the same trend can be observed in countries like India.  Meaning, there are equities valuation problems around the world.

    The issue here is that corporate earnings do not justify such high stock prices. Therefore, something else must be inflating those prices. That something was, of course, central bank stimulus, and now that party is almost over, whether the “buy the f’ing dippers” want to admit it yet or not.

    10-Year Treasury Yield Spike

    Have spiking Treasury bond yields actually been a signal for an “accelerating economy” as mainstream economists often suggest? Not really. In the era of central bank monetary manipulation, it is more likely that yields were spiking because markets are anticipating the arrival of Jerome Powell as Fed chair and accelerating interest rate hikes rather than an accelerating economy.

    The notion that the economy itself might be “overheating” in 2018 is a rather new and nefarious propaganda meme being used by central bankers to set a particular narrative. I believe that narrative will be the claim that “inflation” is a key concern rather than deflation and that central banks must act to temper inflation with more aggressive rate increases. In reality, what we are seeing is not “inflation” in a traditional sense, but stagflation. That is to say, we are seeing elements of price inflation in necessary goods and services and well as property markets, but continued deflation in the rest of the economy.

    The Fed in particular will continue to ignore negative fundamentals because they are seeking to deliberately pop the market bubble they have created.

    The spike in 10-year bond yields seems to be correlating closely to the recent volatility in stocks. This volatility increased exponentially as yields neared the 3% mark, which appears to be the magical trigger point for equities failure.  Though yields suffered a modest decline as stocks tumbled this week, I still recommend keeping an eye on this indicator.

    Dollar Weakness

    As I have mentioned in recent articles, there has been a strange disconnect between interest rates and the U.S. dollar. As the Fed continues its policy of hiking interest rates, generally the dollar index should rise in response. Instead, the dollar has been swiftly falling, only stalling in the past couple of trading sessions. If the dollar index continues to fall even as stocks decline and rates increase, this may suggest a systemic risk to the dollar itself.

    Such risk could include a dollar dump by foreign central banks in favor of a wider basket of currencies, or the SDR trading basket created by the IMF.

    Balance Sheet Reductions Accelerating

    The Fed’s most recent release of data on its balance sheet reduction program shows a drop in holdings of $18 billion; this is far higher that the originally planned $12 billion slated by the Fed.  Meaning, the Fed is dumping its balance sheet holdings much faster than it told the public initially.

    Why is this important?  Well, if you have been tracking the behavior of stocks over the past few years as well as the increases in the Fed’s balance sheet, you know that stock markets have risen in direct correlation with that balance sheet.  In other words, the more purchases the Fed made, the higher stocks climbed.

    Image result for Fed balance sheet and Stocks 2017

    If this correlation is directly linked, then as the Fed reduces its balance sheet, stocks should fall.

    So, the fed announces its latest round of balance sheet reductions on January 31st, the reduction is much higher than anticipated, and within a week we witness the largest two day market drop in years.  You would think this observation might just be important, but if you look at the mainstream economic media, almost NO ONE is mentioning it.  Instead, they are searching for all sorts of random explanations for what just happened, none of which are very logically satisfying.

    I believe that the Fed will not only continue its program of interest rate increases even if stocks begin to flounder, but that they will also unload their balance sheet as quickly as possible.

    Corporate Investor Comments

    Major corporate investment firms are beginning to raise their voices about the potential not only for stock devaluations, but also the amount that they might fall. Sydney-based AMP capital suggested a rather moderate 10% pullback in equities, which I think will become the talking point for most of the mainstream media over the next couple weeks. At least, until the whole thing comes crashing down much further than that.

    The head of Blackstone COO expects stocks to fall at least 20% this year, a much more aggressive number but not high enough in my view.

    I still believe these kinds of estimates are only applicable in the very short term. By the end of 2018, it is possible that markets will double the worst estimated declines predicted by the mainstream investment world given the fundamentals.

    Central Banker Comments

    Comments by agents of the Federal Reserve reinforce the notion that the central bank is about to crush the bull market bubble. San Francisco branch head Robert Kaplan has been quoted as saying the Fed may be required to hike interest rates MORE than the three times expected by mainstream economists in 2018.

    As noted above, Janet Yellen’s exit statements were decidedly “hawkish,” suggesting that property markets and stocks are overpriced. On top of this, Jerome Powell, the new Fed chair, has been quoted in Fed documents from 2012 (finally released this past month) discussing the market bubble the Fed had created and the need to temper than bubble. In other words, Powell is the perfect man for the job of imploding stocks. Powell even predicted in 2012 that when the Fed raises rates the reaction by stock markets might be severe.  Interesting that markets would plunge the very first day Powell assumes the Fed chair position.

    I suppose finally a Fed agent and I have something in common. We’ve both been predicting the same exact market outcome caused by the same trigger event for around the same number of years.

    I outlined in great detail the plan for the “global economic reset” and Powell’s role in overseeing the next stock crash in my article Party While You Can – Central Bank Ready To Pop The Everything Bubble. In that article, I predicted exactly the results which seem to be developing today in equities.

    In essence, Powell is being portrayed by the mainstream media as “Trump’s guy,” and the change in Fed leadership is now being referred to as “Trump’s Fed.” This is not random rhetoric.  I can’t think of ANY other president in the past that was given credit by the mainstream media for the activities of the Federal Reserve. Trump’s control over the Federal Reserve is zero. But, the actions of the Fed over the course of this year will undoubtedly crash the very equities markets that Trump has been foolishly taking credit for since his election.

    The real issue here now is, how fast will this ugly festering sore explode? That’s hard to say. I would not be surprised if markets fall about 20% below recent highs in the course of the next couple of months and then stall. We may even see a couple spectacular bounces in the near term, all set to trumpets and fanfare by the mainstream economic media who will proclaim that the latest shock-drop was nothing more than an “anomaly.” Then, the crash will continue into the end of 2018 and panic will ensue.

    That said, if there is some kind of major geopolitical crisis (such as a war with North Korea), then all bets are off. Stocks could crash exponentially over the course of a few weeks rather than a year. As the past few days have proven, stocks are not invincible, not in the slightest. And all the gains accumulated in the span of years can be wiped away in an instant.

    *  *  *

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  • "Do I Have To Worry About Another Volatility Spike"- A Q&A With Goldman's Head Quant

    After a day of conference calls with investors, Goldman’s newly-hired quant Rocky Fishman has assembled the most frequently asked questions that are relevant for trading dynamics in the VIX and equities in the coming days.

    Here is the result: Goldman’s Q&A on the Trading Dynamics of ETPs

    * * *

    1. Do I have to worry about VIX ETPs driving another similar volatility spike?

    Not for now, and not likely anytime soon. The large short VIX products were the primary driver of Monday afternoon’s late-day acceleration in the VIX, and with them diminished ($300mm AUM now vs $3.9bln peak AUM), the quantity of VIX futures ETP issuers would have to buy on a further volatility spike is diminished as well. Levered long ETPs remain sizable ($1.1bln AUM), but per unit of VIX futures exposure, they trade less on a volatility spike than inverse products would (filling the gap between long futures that have risen and a fund NAV that has risen faster requires fewer units of futures than between a NAV and futures position that are moving in opposite directions). The higher level of VIX futures also makes an N-point move a lower percentage move than it would be with lower VIX futures prices.

    2. What’s the impact of the XIV (and Japan-listed 2049) redemption? What’s the impact of the SVXY continuing to trade?

    The previously sizable short VIX ETPs no longer have a significant impact on the VIX futures market because Monday’s sell-off pushed their AUM down so much that their VIX futures holdings would be immaterial to the broad market (the SVXY is short less than 1% of VIX futures open interest), regardless of whether or not they continued trading.

     

    3. Why were VIX futures and S&P futures both down throughout much of Tuesday’s trading day?

    Typically, VIX futures rise when S&P 500 futures are falling; however, VIX futures had such outsized, technicals-driven buying pressure on Monday afternoon that the absence of this was enough to allow VIX futures to fall on Tuesday, even in the context of an initially weaker equity market.

    4. Were short ETPs a material percentage of the VIX futures market? What implications do this week’s events have on VIX future trading volumes?

     

    VIX future volumes closely track VIX ETP trading volumes, so we would expect a material drop in ETP volumes due to the lack of sizable short ETP trading activity to result in a similar drop in VIX future volumes. We estimate short VIX ETPs constituted over 40% of ETP trading volume in January, when measured in VIX future-equivalent terms. While VIX derivatives naturally are active when volatility is moving around, we expect VIX future volumes to fall below – perhaps substantially below – their typical 2017 range (1st & 2nd futures volume was 30% higher than the typical 2015-6 volume) as conditions normalize.

     

    5. Is there a transmission mechanism by which VIX futures activity can lead to S&P 500 trading?

    Investors may use S&P 500 futures to hedge some of the risk of short VIX future positions. If some of the investors selling VIX futures to ETP issuers on Monday simultaneously sold SPX futures as a hedge against the market risk inherent in their short VIX future positions, their positioning could potentially have impacted equity prices. High volatility can also pressure equity prices via flows from systematic volatility-linked funds, investor confidence, and VAR-driven risk reduction.

     

    6. Was this technical selloff expected? Should vol-of-vol (i.e., VIX option prices) be structurally higher given what has taken place?
    VIX option prices had been abnormally high for the current low level of volatility throughout much of January as investors had priced in some risk of outsized short VIX ETPs causing turmoil like Monday’s. In effect, option pricing implied that should volatility rise, it would rise quickly. With the short VIX ETP market now small, we think that implied volatility of VIX options should reset to levels lower than the last few months once conditions normalize, which could create opportunities to sell VIX options.

    7. If the AUM of short VIX ETPs was only $3.9bn at their peak, why are they important?

    Short VIX ETPs were important because a hypothetical spike in VIX futures would economically drive their issuers to buy an outsized amount of VIX futures, and that buying could push VIX futures up more, creating escalating volatility like we saw on Monday. VIX ETPs are small relative to the US equity market, but large relative to the VIX futures market (often accounting for 40% of open interest). These ETPs were also highly correlated with the equity markets and had multiples of the SPX’s volatility, giving them a larger impact on portfolios than their AUM would suggest.
     

    8. Why do short and levered long VIX ETPs both buy more VIX futures when volatility spikes?

    When volatility rises, both inverse and levered long VIX ETP issuers are economically driven to buy VIX futures: the inverse product issuers do so to reduce a short position that has become too large relative to their AUM, and the levered issuers do so to supplement a long position that has not risen as quickly as the AUM of the ETP itself.
     

    9. Can VIX ETPs cause vol to fall abnormally quickly just like they caused this rise?

    Yes and no, in our view. VIX futures tend to spike up more than they spike down, but should volatility drop dramatically, ETP rebalancing could help VIX futures overreact to the downside as well. We estimate that Tuesday’s normalization of volatility left ETP issuers with around 40k VIX futures to sell – a large amount but far below Monday’s estimated “vega to buy” that exceeded 200k VIX futures.
     

    10. Why do issuers have to trade near the 4:15 futures market close?

    The indices behind the VIX ETPs are based on one-day changes in VIX futures levels, measured by their 4:15 PM NY time prices. Every day, an ETP’s NAV change is a weighted average of the one-day returns of two VIX futures, but those weights change every day. It is only at the close of each trading day that the next day’s weights are fully known, because the total dollar amount of futures involved needs to be exactly the right leverage times the price of the product. This process becomes a feedback loop because each ETP’s closing NAV is an input to the size of its position the next trading day. As we approach the close every day, an ETP issuer shifts its portfolio to the next day’s position so it can correctly replicate the next day’s return.
     

    11. Did the XIV and SVXY cause 2017’s surprisingly low VIX range? Now that they are diminished will volatility return?

    In our view, 2017’s low VIX range was driven primarily by low S&P 500 realized volatility (the lowest S&P 500 realized volatility since 1964), which was a byproduct of low volatility across asset classes, low intra-SPX correlation, and benign economic conditions. We do not see evidence that VIX ETPs furthered this in any material way.

    12. What is vega?

    Vega is a measurement of volatility risk that represents dollars per volatility point. Because the contract has a 1,000 multiplier, each VIX futures contract carries 1,000 vega – i.e. its value changes by $1,000 for each point that the VIX futures price moves. The amount of vega in any one VIX ETP share changes over time, as the amount of VIX futures exposure that can “fit” inside a share is a function of the share’s NAV and the price of VIX futures. Short VIX ETPs had seen their vega per share grow quickly in late 2017, but now the SVXY has very little vega per share.

  • US-Led Coalition Bombs Syrian Forces Following Israeli Strike Near Damascus

    A US-led coalition has conducted several “defensive” airstrikes against Syrian forces allied with President Bashar al-Assad on Wednesday in Syria’s Deir al-Zor province, in retaliation for what the coalition said was an “unprovoked” attack on the US-backed left-wing Syrian Democratic Forces (SDF) headquarters.

    Furthermore, CNN reported late Thursday that US forces are now investigating whether Russian contractors were involved in the initial attack against the SDF, after a US official told the news outlet that the possibility could not be ruled out.

    The retaliatory airstrikes are said to have occurred 8km (5 miles) east of the Euphrates River, while no U.S. troops embedded with the local fighters at their headquarters are believed to have been wounded or killed in the attack on the headquarters, reports Reuters.

    The US-led coalition did not say whether any pro-Syrian forces were killed in the retaliatory strike.

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    Syrian pro-regime forces initiated an unprovoked attack against well-established Syrian Democratic Forces headquarters,” reads a Feb 7 press release from Central Command. “In defense of Coalition and partner forces, the Coalition conducted strikes against attacking forces to repel the act of aggression against partners engaged in the Global Coalition’s defeat-Daesh mission.” 

    Although no U.S. servicemembers were reportedly involved in the attack on the SDF, the US-led coalition has previously asserted a “non-negotiable right to act in self-defense,” pointing to the fact that coalition service members are embedded with the SDF “partners” on the ground in Syria. 

    Syrian President Bashara al-Assad has repeatedly stated that the presence of the US-led coalition on Syrian soil is an act of aggression and a violation of Syrian sovereignty. Officially, Russian and Syrian air forces are the only military allowed to operate in Syria – however Syria and Iran are close strategic allies, with the latter providing logistical, technical and financial support to the Syrian government during the ongoing Syrian Civil War. Syria has repeatedly asked the United Nations to convince the United States to leave following the defeat of most ISIS forces in the country, however US Secretary of State Rex Tillerson says US troops will remain in Syria as a counter to Syrian President Bashar al-Assad and Iranian forces.

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    Secretary of State Rex Tillerson

    News of the retaliatory coalition airstrike comes on the heels of what we reported was an overnight attack against Syrian government locations near Damascus, in yet another attempt to provoke war with Syria. 

    Bombs Away

    As we discussed earlier, for at least the third time since the start of the 7-year long war in Syria, Israeli jets attacked a site just outside of Syria’s capital city called Jamraya – believed to be a military research facility related to chemical weapons.

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    Jamraya’s government facilities are well known – and include a branch of Syria’s Scientific Studies and Research Center – the site of two previous Israeli attacks in 2013 and December of 2017. 

    Like with other recent attacks, Israeli jets are reported to have fired from over Lebanon, with a Syrian military media statement saying that its air defenses intercepted most of the inbound missiles, though no further details were given. Unconfirmed international media reports, however, indicate one or more of the Israeli missiles may have impacted parts of the Syrian government facility during the strikes which occurred at 03:42 am local time Wednesday morning.

    In response to Israel’s most recent attack – apparently timed to coincide with recent allegations against repeated chemical attacks conducted by the Syrian government against al-Qaeda held pockets of the country, the Syrian military said “The general command of the armed forces holds Israel fully responsible for the dangerous consequences of its repeated, aggressive and uncalculated adventures.”

    Though admitting “no evidence” US Defense Secretary Jim Mattis suggested last week that the Syrian Army may be using sarin gas while also alleging multiple smaller scale chlorine attacks. 

    Israel, however, has lately been quick to justify what Damascus has condemned as unprovoked “acts of aggression” in humanitarian terms as retribution for supposed gas attacks. Israel has long been on record as condemning Iran’s presence in the region, however, Israeli leaders lately appear increasingly reliant on chemical attack claims as rationale for bombing Syrian government sites. 

    Looks like more regime change is on the menu. The only question is when, and whether or not chocolate cake will be served for dessert. 

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Today’s News 7th February 2018

  • Germany Still Holds The Most Winter Olympics Medals

    The first ever Winter Olympic Games were held in Chamonix in the French Alps in 1924 – 16 nations took part, competing for medals in 9 disciplines.

    The most recent winter games were held in the Russian resort of Sochi in 2014, where 88 nations competed in 15 disciplines.

    This week, the 23rd games will start with an opening ceremony in Pyeongchang in South Korea on Saturday. They will go on for two weeks, until February 25.

    As Statista’s Dyfed Loesche notes, Germany has so far been able to rake in most medals at the Winter Olympics, standing at 377 today. This is counting in all medals German teams have acquired, from Nazi Germany, through to Germany divided in to East and West and after reunification in 1990.

    Infographic: Germany Still Holds Most Medals | Statista

    You will find more infographics at Statista

    In second place, Russia had a good run in Sochi, but the International Olympic Committee (IOC) decided to bar 43 Russian athletes from competing at this year’s winter games, as they stand accused to have profited from systematic doping in 2014.

    On Thursday the international sports court CAS overturned some of these suspensions.

  • Little Barbies: Sex Trafficking Of Young Girls Is America's Dirty Little Secret

    Authored by John Whitehead via The Rutherford Institute,

    They’re called the Little Barbies.

    Children, young girls—some as young as 9 years old—are being bought and sold for sex in America. The average age for a young woman being sold for sex is now 13 years old.

    This is America’s dirty little secret.

    According to the National Center for Missing & Exploited Children,Children are being targeted and sold for sex in America every day.”

    Sex trafficking—especially when it comes to the buying and selling of young girls—has become big business in America, the fastest growing business in organized crime and the second most-lucrative commodity traded illegally after drugs and guns.

    As investigative journalist Amy Fine Collins notes, “It’s become more lucrative and much safer to sell malleable teens than drugs or guns. A pound of heroin or an AK-47 can be retailed once, but a young girl can be sold 10 to 15 times a day.”

    Consider this: every two minutes, a child is exploited in the sex industry.

    According to USA Today, adults purchase children for sex at least 2.5 million times a year in the United States.

    Who buys a child for sex? Otherwise ordinary men from all walks of life.

    They could be your co-worker, doctor, pastor or spouse,” writes journalist Tim Swarens, who spent more than a year investigating the sex trade in America.

    In Georgia alone, it is estimated that 7,200 men (half of them in their 30s) seek to purchase sex with adolescent girls each month, averaging roughly 300 a day.

    On average, a child might be raped by 6,000 men during a five-year period of servitude.

    It is estimated that at least 100,000 children—girls and boys—are bought and sold for sex in the U.S. every year, with as many as 300,000 children in danger of being trafficked each year. Some of these children are forcefully abducted, others are runaways, and still others are sold into the system by relatives and acquaintances.

    “Human trafficking—the commercial sexual exploitation of American children and women, via the Internet, strip clubs, escort services, or street prostitution—is on its way to becoming one of the worst crimes in the U.S.,” said prosecutor Krishna Patel.

    This is not a problem found only in big cities.

    It’s happening everywhere, right under our noses, in suburbs, cities and towns across the nation.

    As Ernie Allen of the National Center for Missing and Exploited Children points out, “The only way not to find this in any American city is simply not to look for it.”

    It is estimated that there are 100,000 to 150,000 under-aged child sex workers in the U.S.

    Every year, the girls being bought and sold gets younger and younger.

    Social media makes it all too easy for young people to be preyed upon by sexual predators.

    As one news center reported, “Finding girls is easy for pimps. They look on MySpace, Facebook, and other social networks. They and their assistants cruise malls, high schools and middle schools. They pick them up at bus stops. On the trolley. Girl-to-girl recruitment sometimes happens.” Foster homes and youth shelters have also become prime targets for traffickers.

    With a growing demand for sexual slavery and an endless supply of girls and women who can be targeted for abduction, this is not a problem that’s going away anytime soon.

    In fact, this growing evil is, for all intents and purposes, out in the open: trafficked women and children are advertised on the internet, transported on the interstate, and bought and sold in swanky hotels.

    Indeed, as I make clear in my book Battlefield America: The War on the American People, the government’s war on sex trafficking—much like the government’s war on terrorism, drugs and crime—has become a perfect excuse for inflicting more police state tactics (police check points, searches, surveillance, and heightened security) on a vulnerable public, while doing little to make our communities safer.

    So what can you do?

    Educate yourselves and your children about this growing menace in our communities.

    Stop feeding the monster: Sex trafficking is part of a larger continuum in America that runs the gamut from homelessness, poverty, and self-esteem issues to sexualized television, the glorification of a pimp/ho culture—what is often referred to as the pornification of America—and a billion dollar sex industry built on the back of pornography, music, entertainment, etc.

    This epidemic is largely one of our own making, especially in a corporate age where the value placed on human life takes a backseat to profit. It is estimated that the porn industry brings in more money than Amazon, Microsoft, Google, Apple, and Yahoo.

    Call on your city councils, elected officials and police departments to make the battle against sex trafficking a top priority, more so even than the so-called war on terror and drugs and the militarization of law enforcement.

    Stop prosecuting adults for victimless “crimes” such as growing lettuce in their front yard and focus on putting away the pimps and buyers who victimize these young women.

    Finally, the police need to do a better job of training, identifying and responding to these issues; communities and social services need to do a better job of protecting runaways, who are the primary targets of traffickers; legislators need to pass legislation aimed at prosecuting traffickers and “johns,” the buyers who drive the demand for sex slaves; and hotels need to stop enabling these traffickers, by providing them with rooms and cover for their dirty deeds.

    That so many women and children continue to be victimized, brutalized and treated like human cargo is due to three things: one, a consumer demand that is increasingly lucrative for everyone involved—except the victims; two, a level of corruption so invasive on both a local and international scale that there is little hope of working through established channels for change; and three, an eerie silence from individuals who fail to speak out against such atrocities.

    But the truth is that we are all guilty of contributing to this human suffering. The traffickers are guilty. The consumers are guilty. The corrupt law enforcement officials are guilty. The women’s groups who do nothing are guilty. The foreign peacekeepers and aid workers who contribute to the demand for sex slaves are guilty. Most of all, every individual who does not raise a hue and cry over the atrocities being committed against women and children in almost every nation around the globe—including the United States—is guilty.

  • Student-Loan Crisis Worsens; Looming Defaults Strain Govt Bailout Program

    As the student loan bubble continues to burst, record numbers of Americans enrolling in government subsidized student loan debt-forgiveness plans, known as income-driven repayment, are on track to send the US student-loan program into negative territory, according to a report by the Department of Education’s inspector general.

    Debt-laden graduates search for the six-figure jobs they were promised

    The plans, known as income-driven repayment, set monthly payments as a percentage of a borrower’s earnings and typically forgive balances after 10 or 25 years, depending on the borrower’s career field and debt amounts.

    Overall, borrowers in income-driven repayment will repay less than what they originally borrowed, the report said, draining the program of billions of dollars in expected revenue. –WSJ

    As we reported last month, nearly 40% of student loans taken out in 2004 may default by 2023 according to a report by the Brookings Institute – blowing past all previous projections.

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    Of note, approximately 5% of undergraduates took out private student loans in 2004, which swelled to 14% of undergraduates by 2008 – 2,901,000 students according to ticas.org. Private student loans, as opposed to federal student loans, are unable to participate in income-driven government repayment programs

    The federal student loan system had originally been projected to turn a profit of $25 billion on all loans made up to Sept. 30, 2015 – however that number has been revised down to $5 billion, according to the IG report. The income-driven repayment program alone will cost the government $11.5 billion in revenue. 

    “The data show the total costs for all loans…approaching an overall positive subsidy,” which translates to a net cost to taxpayers, i.e. the program going into the red – according Patrick Howard, the department’s assistant inspector general for audit.

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    The IG report was highly critical of the Department of Education for a glaring lack of transparency over the student loan program – which has grown to one of America’s largest consumer loan portfolios. A cumulative $1.4 trillion in federal student debt is owed by 43 million Americans – which is unable to be discharged in bankruptcy. As such, the debt forgiveness program is the only hope if the six-figure job borrowers were promised before taking out a six-figure loan didn’t materialize. 

    Republicans in Congress have criticized the debt forgiveness plan created by the Obama administration, as they say the plans are being taken advantage of on a large scale. 

    “What was designed as a temporary safety net has become the standard where students expect their debt to be forgiven after a certain amount of time,” Sen. Lamar Alexander (R., Tenn.), head of the committee overseeing education, told the Senate during a hearing last week. “We will not know the impact of so many borrowers being in this program for another decade, when the first set of borrowers begin to have their debt forgiven.”

    The Department of Education has committed to providing more transparency going forward, stating in the report that it is “committed to the transparent communication of the Federal student loan program costs, including describing trends in repayment options that may impact future estimated costs.” 

    As we reported last July, the US saw its largest one-month outlay on record at $429 billion, 33% higher than its July 2016 outlay –  because the Treasury revised up its estimates of the subsidy cost of student loans, and to a lesser extent housing, it guarantees.

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    Here is the CBO explanation:

    Outlays for the Department of Education rose by $31 billion (or 51 percent), because the department revised upward, by roughly $39 billion, the estimated net subsidy costs of loans and loan guarantees issued in prior years—a change much larger than last year’s $7 billion upward revision. If the effects of those revisions were excluded, outlays for the department for the first nine months of fiscal year 2017 would have fallen by $2 billion (or 3 percent).

    Outlays for the Department of Housing and Urban Development rose by $29 billion, primarily because the department made upward revisions in June 2017, but downward revisions in April 2016, to the estimated net subsidy costs of loans and loan guarantees issued in prior years.

    While the federal student loan debacle is going to fall on the shoulders of US taxpayers, it will be interesting to see how private lenders – such as Wells Fargo, adapt to 40% of their 2004 loans defaulting within the next five years. 

  • "Hostiles…"

    Authored by Jim Quinn via The Burning Platform blog,

    I don’t like going to the movies. Too much hassle, too many commercials and previews, too expensive, and 90% of the movies are worthless drivel, SJW inspired crap, or government buoyed propaganda. Last weekend was my wife’s birthday and she wanted to see a movie. When she shockingly suggested a western, I reluctantly agreed. So my wife and one of my sons got in the car and headed to an old Franks theater in Montgomeryville that only charges $8.50. I had seen a brief review of Hostiles on-line and saw it got a decent rating on rotten tomatoes. I was looking forward to being mildly entertained.

    The next two hours and fifteen minutes of this dark, somber, violent, morally ambiguous treatise about the old west cannot be described as enjoyable.

    But I did find it riveting and thought provoking. Christian Bale, as Captain Joseph Blocker, mournfully carries out his duties without a single smile crossing his bearded countenance for the entire movie. The tone, atmosphere and message of this film reminded me of my favorite western and subject of the final part of my five part series based on Clint Eastwood movies – Unforgiven. One of the soldiers in Hostiles even has dialogue almost matching Will Munny’s foreboding exchange at the end of Unforgiven:

    “That’s right. I’ve killed women and children. I’ve killed just about everything that walks or crawled at one time or another. And I’m here to kill you, Little Bill, for what you did to Ned.”

    It was clear to me Scott Cooper, the director, was paying tribute to Eastwood and his Academy Award winning revisionist western classic, with his dark cinematography, introspective atmosphere, and themes of good, evil, heroism, aging, duty and courage. Movies in this age of shallowness, disinformation, and fake news rarely broach subjects like the treatment of Native Americans in the 1800s.

    The usual superficial Hollywood treatment paints a black and white picture of good and evil; right and wrong; good guys and bad guys, when the true picture is a swirling surreal portrait of opacity and moral relativism. The reason Unforgiven is considered a classic is its honest portrayal of the brutality, murder, reputation, heroes, villains, and the blurred line between good and evil.

    Hostiles tells the story of Captain Joseph Blocker who is on the verge of retirement after decades of fighting Indians, with a reputation as the most relentless, brutal and unforgiving Indian fighter in the U.S. Cavalry. By order of the president he is tasked with returning a paroled and dying of cancer Cheyenne Chief – Yellow Hawk – to his home Valley of the Bears in Montana so he can be buried in his birthplace. He initially refuses the assignment because of his blind hatred of all Indians and specifically Yellow Hawk.

    During his decades of fighting Indians, he found Yellow Hawk to be his equal in murderous brutality and disdain for his enemies. He personally slaughtered four of Blocker’s closest friends. His colonel threatens him with court martial and the loss of his government pension if he does not carry out his orders. Always the good soldier, he obeys and leads his hand-picked men as they begin their mission.

    Shortly after undertaking their mission they come across a burnt out homestead where a Comanche renegade war party had killed and scalped the patriarch, shot and killed his three children and left a shattered wife who had hidden in the woods to escape slaughter. The stoic, gruff, hard hearted Blocker makes the executive decision to escort this broken woman to safety, the soldier displaying a degree of compassion that almost renders him unrecognizable.

    The dangerous journey to Montana becomes a metaphor for Blocker’s passage from blind hatred to trust, understanding and retrieval of his humanity. After a lifetime of barbarity and animosity, killing without remorse because he didn’t see his enemy as human, Blocker gradually gains perspective and empathy.

    Image result for yellow hawk hostiles

    After his unit is attacked by the same murderous Comanche war party and he loses some of his few soldiers, Blocker reluctantly removes the chains from Yellow Hawk, who gives his word to help defend their small contingent. They prove their worth and allegiance by sneaking out of camp in the middle of the night and slaughtering the Comanche warriors and then returning. Blocker silently acknowledges this act, beginning to shift his preconceived beliefs about Yellow Hawk and his Cheyenne brethren.

    A grudging respect between mortal enemies develops as the journey and metaphor intersect and the violence of the old West continues unabated. The line between heroes, villains, bravery, cowardice, murder and self-defense blurs, as the concept of morality is distorted by the lawlessness of an unforgiving world. The old West was far more complex than portrayed by the Hollywood entertainment complex.

    Despite a well-crafted film and an Academy Award winning lead, I believe this western will not connect with Americans and draw a large audience because we are in the midst of a Fourth Turning.

    Movies and books become blockbusters when they reflect the current mood of the country. The violent backdrop of Hostiles fits into the current paradigm, but its message of compromise, understanding, and reconciliation is inconsistent with the current disposition of the American populace.

    Americans are in a fighting mood. Just as physical altercations broke out on the floors of Congress in the 1850s and compromise became impossible, the current animosity in the political realm has crossed the point of no return. Self-proclaimed moderates have no say in the current poisoned partisan atmosphere. The pure hatred and vitriolic loathing of opponents for control of this country has reached a breaking point.

    Hostile is the perfect description for the factions clashing for control of the American Empire. The last week revealed the Deep State conspiratorial plot to prevent Donald Trump from winning the presidency. A sitting president, his high level lackeys in the FBI and DOJ, crooked Hillary, and the left wing propaganda spewing media, colluded to steal the presidential election – essentially committing treason. A few years ago only obscure bloggers used the term Deep State to describe the shadowy wealthy interests pulling the strings behind the scenes and ruling over the peasants through a combination of fear, disinformation, surveillance, propaganda, and control of the legislative, judicial and executive branches.

    Now there is irrefutable proof Edward Bernays was telling the truth in 1928 regarding an invisible government manipulating the habits and opinions of the ignorant masses to benefit their own self interests. The level of control and manipulation has reached a tipping point. The internet, obscure bloggers, and a small but vocal irate minority setting brush fires of freedom in the minds of critical thinking citizens has foiled the plans of Deep State traitors.

    The unanticipated election of Trump has unleashed a tsunami of civil strife, plots to undermine the presidency, exposing the corporate fake news media as co-conspirators of the Deep State, and an out of control surveillance state that makes Orwell’s 1984 Big Brother seem like a piker. Make no mistake about it, there is a civil war ongoing in this country and the outcome is very much in doubt.

    The three critical factors driving this Fourth Turning continue to be civic decay, global disorder and debt.

    As described, civic decay is accelerating at an astounding rate, hurtling the country towards a Constitutional crisis. Every day new evidence of surveillance state misdeeds feeds the rage building among critical thinking non-partisan Americans. The American military empire is actively engaged in Syria, Iraq, Afghanistan, Africa, and other countries around the globe. Turkey is at war in Syria with our Kurd allies.

    Our Al Qaeda backed rebels are fighting Assad and Russia. The Ukraine is a powder keg, with our installed lackey president pushing for conflict with Russia. Israel and Hamas are on the verge of war. Iran and Saudi Arabia are fighting a proxy war in Yemen. The Korean peninsula could explode at any moment. Global disorder is mounting in intensity and dimension. America’s belligerency, policing the world, provoking Russia and China into an alliance, and pursuing the agenda of neocons and the military industrial complex, pushes the world ever closer towards a global conflict.

    The third core element of this Fourth Turning has thus far been the component temporarily concealing the foulest aspect of this ongoing crisis. The Deep State and their financiers at the Fed and Too Big To Trust Wall Street banks have propped up a debt saturated failing financial system with tens of trillions in additional debt. By artificially suppressing interest rates; rigging stocks, currencies and precious metals through the shadowy derivatives market and dark pools; and providing free money to Wall Street bankers, they have purposely created the largest bubble in world history in stock, bond and real estate markets simultaneously. The “Everything Bubble” puts all other bubbles to shame. Just the slowing of debt creation is beginning to reveal cracks in the system.

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    The average American has been led to believe the current bull market is due to an improving economy or some other such tripe. Their delusions are built on a vaporous foundation of unpayable debt and relentless propaganda spewed by the corporate media. This debt based paradigm is mathematically unsustainable. A 1% increase in interest rates blows the entire Ponzi scheme sky high – and rates have begun to rise. The ten year Treasury breaching 2.8% last week led to a 1,100 drop in the Dow in the blink of an eye. When greed turns to fear, look out below.

    Buy the dip says the Wall Street shill “experts” who are paid to tout stocks. Debt is still the key focal point which will propel this Fourth Turning towards its climax. Leverage is a beautiful thing during a crack up boom, as speculators who believe they are brilliant investors appear to get money for nothing. During the inevitable bust the highly leveraged “investing experts” see their faux wealth evaporate in an instant, while the debt remains and must be serviced.

    I wonder how the investing geniuses who bought bitcoin at $18,000 with their credit card a few weeks ago are feeling now with bitcoin below $8,000. It appears this fragile fake financial house of cards, built on a titanic mountain of dodgy debt, is wobbling and the slightest gust of wind or 25 basis point increase in interest rates endangers all of the Deep State machinations to prop up their failing social order. When average Joes and Janes see their 401ks obliterated for the third time in the last two decades, they will be enraged and susceptible to the ravings of the latest politician lunatic savior. When people lose it all, they will lose control of their reason, and all hell will break loose.

    Once financial hardship sweeps over the land, the civic decay and global disorder will fuse with the anger of the populace and thrust this crisis into a violent dimension. The use of debt by the Deep State ruling class has disguised the rot in the system, but will turbocharge the downside as financial collapse and universal dismay with those in power leads to violence, bloodshed and war.

    If you think the current environment is hostile, you haven’t studied history to understand the death and destruction wrought during the climaxes of the last two Fourth Turnings. Millions will die before this is over. We are exiting the eye of the hurricane and the risk of catastrophe is high. You can feel the swelling peril in your bones. Get your affairs in order and get ready for the next phase of this crisis.

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    “The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning

  • "Sea Hunter" – A Drone Ship With No Crew Just Joined The US Naval Fleet

    In the latest installment of the Pentagon’s preparation for the fast-approaching drone wars, a prototype autonomous ship known as the Medium Displacement Unmanned Surface Vehicle (MDUSV) has successfully been transferred to the United States Navy from the Defense Advanced Research Projects Agency (DARPA), after it completed its multi-year Anti-Submarine Warfare (ASW) Continuous Trail Unmanned Vessel (ACTUV) program.

    The autonomous ship “Sea Hunter”, developed by DARPA, is shown docked in Portland, Oregon after its christening ceremony, April 7, 2016. REUTERS/Steve Dipaola

    Christened as the “Sea Hunter,” the Office of Naval Research (ONR) will take the reins from DARPA in the development process, which the anti-submarine warfare vessel could be the first of an entirely new class of warship for the United States Navy. The vessel can travel thousands of miles and even stay at sea for months without the need of a manned crew.

    “ACTUV’s move from DARPA to ONR marks a significant milestone in developing large-scale USV technology and autonomy capabilities,” said Alexander Walan, a program manager in DARPA’s Tactical Technology Office (TTO).

    “Our collaboration with ONR has brought closer to reality a future fleet in which both manned warships and capable large unmanned vessels complement each other to accomplish diverse, evolving missions,” Walan added.

    “ONR appreciates the truly impressive work by DARPA in advancing this technology, and the strong partnership we’ve had on ACTUV over the years,” said Robert Brizzolara, ONR program officer for MDUSV.

    “As ACTUV transfers from DARPA to ONR, ONR is looking forward to continuing and capitalizing on the science and technology work. In particular, we are already working on autonomous control, a challenging area that is key to maturing MDUSV and delivering it to the fleet,” he said.

    “ACTUV represents a new vision of naval surface warfare that trades small numbers of very capable, high-value assets for large numbers of commoditized, simpler platforms that are more capable in the aggregate,” said Fred Kennedy, TTO director.

    “The U.S. military has talked about the strategic importance of replacing ‘king’ and ‘queen’ pieces on the maritime chessboard with lots of ‘pawns,’ and ACTUV is a first step toward doing exactly that,” he stated.

    Newsweek outlines the cost benefits of the drone-ship and points out its strategic purpose of a “surveillance vehicle.”

    The vessel comes at a relatively cheap $20 million prospective price tag and takes only around $20,000 a day to run. This figure is less expensive than a crew-run ship and also nixes potential personnel risks when navigating dangerous missions, such as navigating a minefield. Without firepower onboard, the Sea Hunter is currently a surveillance vehicle. Its tests so far have revolved around how easily and autonomously the vessel can maneuver its 132-foot-long body, accelerate to speeds nearing 27 knots, and using use radar and cameras to spot other vessels.

     

    Sea Hunter christening ceremony in Portland, Oregon. (U.S. Navy photo by John F. Williams/Released)

    Last month, General Mark Milley warned an audience at the Association of the United States Army’s Institute of Warfare event, that the United States must embrace artificial intelligence, robotics, and other emerging technologies immediately to maintain relevance on the ever so changing battlefield.

    “I don’t know if artificial intelligence is going to mean robots and machines replace humanity… but I do know the quantum computing and some of the IT technologies that are out there today are so significant and can help you [with] rapid decision-making in complex decentralized environments – that if we don’t take advantage of that in things like the network—then we would be fools because others are moving out quickly on that,” Milley said.

    “Every vehicle is going to have the capability to be robotic,” he said, stressing the importance of a vehicle’s flexibility in giving options to a commander on the front lines, giving him options without requiring different vehicles to be deployed. “He can estimate the situation, he can make a determination as to whether he wants this assault to be manned or unmanned,” Milley explained

    As a whole, the Pentagon is racing against the clock to implement future combat systems of tomorrow into the military vehicles of today. Just take note, what is happening in the United States Navy with the new addition of “Sea Hunter,” signals the modernization of America’s military will be through the adoption of autonomous vehicles. When the next major conflict breaks out, it is likely that machines will be on the front-lines waging an unemotional war against each other.

  • "Bad People Lied To A Kangaroo Court" – Americans Can Handle The Truth!

    Authored by Robert Gore via Straight Line Logic blog,

    The bigger issue is FISA’s evisceration of the Fourth Amendment.

    Due to the sensitive nature of foreign intelligence activity, FISA [Foreign Intelligence Surveillance Act] submissions (including renewals) before the FISC [Foreign Intelligence Surveillance Court] are classified. As such, the public’s confidence in the integrity of the FISA process depends on the court’s ability to hold the government to the highest standard—particularly as it relates to surveillance of American citizens. However, the FISC’s rigor in protecting the rights of Americans, which is reinforced by 90-day renewals of surveillance orders, is necessarily dependent on the government’s production to the court of all material and relevant facts. This should include information potentially favorable to the target of the FISA application that is known by the government. In the case of Carter Page, the government had at least four independent opportunities before the FISC to accurately provide an accounting of the relevant facts. However, our findings indicate that, as described below, material and relevant information was omitted.

    House Intelligence Committee FISA Memorandum, 1/18/18, Declassified 2/2/18

    It’s hard to read the above without laughing. The only people who think that the government in a non-adversarial, secret, non-reviewable judicial proceeding will produce “all material and relevant facts,” including “information potentially favorable to the target of the FISA application,” are those pathetically deluded souls who believe that when rules, regulations, and laws are promulgated everyone complies, including the government that promulgated them. They’re always shocked when reality proves otherwise.

    The rest of us might want to consider what it took for this exposure of potential government wrongdoing before the FISC. The House Intelligence Committee (HIC) pressed for months and was forced to threaten subpoenas before the Department of Justice and the FBI turned over the evidence upon which its memorandum is based.

    If this wasn’t such a high-profile partisan battle, impinging on the presidency, that effort never would have been made. Had Hillary Clinton been elected or Democrats controlled Congress, none of this would have seen the light of day. The intelligence agencies and the FBI can rest assured, it will be business as usual before the FISC: non-adversarial, secret, non-reviewable proceedings in which they can allege, unchallenged, pretty much anything they want, their surveillance requests rubber-stamped by the court (historically it’s approved over 99 percent of all requests).

    It is a measure of President Trump’s contempt for civil liberties that he just signed a reauthorization of the FISA law that was used to infringe his civil liberties. The reauthorization expands the government’s surveillance and bulk data capture of Americans’ personal information pursuant to general warrants that do not “require probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” (Fourth Amendment, US Bill of Rights).

    Most importantly, the reauthorization “would permit the use of evidence of crimes in federal court even when it is discovered during mass surveillance authorized by general warrants.”  Trump will overlook that little infringement of his rights in the interests of expanding his access to information and the power implicit in such access. He pursues power and is quite proficient at it. Civil liberties can be a real hindrance.

    Incidentally, the HIC released its memo to Congress after FISA was reauthorized. HIC Republicans favored that reauthorization, despite what they have alleged about nefarious activities before the FISC. Their memo might have changed some votes. Anybody think the timing was a coincidence?

    The FISC enables the government to end run Americans’ Fourth Amendment rights. The HIC memo is a tree, FISA’s destruction of civil liberties the forest. Investigations, possibly indictments, trials, and convictions, will grind on for years and provide plenty of grist for plenty of commentators’ mills. The investigations will eventually wind down, but FISA may be forever. Comey and the Clintons might be in jail, but we all could be, based on evidence obtained without probable cause via general warrants, the government’s data gathering rubber-stamped by its kangaroo court.

    As for the HIC’s memo, it’s a fine piece of legal craftsmanship, although it’s not a legal document per se. It confines itself to one matter: the DOJ and FBI’s request for a probable cause order—and three subsequent renewals—authorizing electronic surveillance of Trump campaign volunteer advisor Carter Page.

    In the understated, cautious style that is the hallmark of competent legal investigatory work, the memo makes a prima facie case that certain individuals broke various laws. While the evidence underlying conclusions about various DOJ and FBI officials’ misrepresentations and omissions to the FISC, their biases, and ties to Fusion GPS has not been made public, there is almost certainly an ample evidentiary basis for those conclusions.

    That evidence, the Democrats’ “counter-memo” and their evidence, and the FISA application and renewals should all be released to the public. The classified information isn’t protecting vital state secrets; it’s protecting officials from embarrassment and possible criminal charges. The American people are smarter and more honorable than those arguing for continuing secrecy; they can handle the truth.

    It’s been claimed that the HIC memo plays into Russia’s or Putin’s hands, or that US intelligence capabilities have been or could be irreparably damaged if information was released, without explaining how those consequences could flow. An unfortunate aspect of the American establishment is that it seals itself off from hostile questions in adversarial settings. Never underestimate the power of a question. It would only take one or two to demonstrate that intelligence flunkies, Adam Schiff, Nancy Pelosi, John McCain, and a host of media commentators are either lying through their teeth or have no idea what they’re talking about.

    Speaking of big issues, the biggest issue of them all, unsustainable global debt, made an unbidden appearance last week as bond yields broke long-term trend lines to the upside and stocks gave way to the downside. Possible subversion of a duly elected president and even FISA’s evisceration of the Fourth Amendment may amount to playing on the beach as the tsunami rolls in. You can’t do much about what’s going on in Washington. For the tsunami, on the other hand, you can move to higher ground if you have not already done so.

  • "We Say Peoplekind": Trudeau Mansplains To Woman That "Mankind" Is Not An Appropriate Term

    Canadian Prime Minister Justin Trudeau is being widely mocked over the internet after he interrupted a woman during  a town hall to admonish her over using the word “mankind” in her question, telling her to instead use “peoplekind.” Trudeau was hosting a Q&A at MacEwan University in Edmonton on Thursday as part of a cross-country tour which began in January. 

    Aimee, a member of South Korean feminist church World Mission Society Church of God, asked a question about removing Canadian restrictions on religious organizations when Trudeau corrected her. 

    Aimee: We came here today to ask you to also look into the policies that religious charitable organizations have in our legislations so that it can also be changed because maternal love is the love that’s going to change the future of mankind.

    Trudeau: We — we like to say “peoplekind,” not necessarily “mankind” ’cause it’s more inclusive. 

    Aimee tells the Daily Mail that she wasn’t offended by Trudeau’s comment, saying “It wasn’t negative,’ and adding “Did it look like I was bothered by it?” 

    And while Aimee may not have been bothered per-se, Twitter was merciless to the politically correct Prime Minister:

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  • Steve Wynn Resigns As CEO Of Wynn Resorts After Sex Allegations.

    Little more than a week after the Wall Street Journal published a stunning report about casino mogul Steve Wynn’s decades-long history of sexual assault, harassment and abuse, the casino mogul has stepped down from the eponymous company that he founded back in 2002.

    In a statement, Wynn said Max Maddox, the company’s president, will succeed him as CEO, and Boone Wayson will take over as non-executive chairman, effective immediately.

    Wynn

    Wynn decried the “rush to judgment” over the allegations for forcing him to step down. He has steadfastly denied the allegations in the WSJ report.

    “In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity,” Wynn said. “As I have reflected upon the environment this has created – one in which a rush to judgment takes precedence over everything else, including the facts – I have reached the conclusion I cannot continue to be effective in my current roles.”

    The decision comes 10 days after he stepped down as finance chair of the Republican National Committee.

    Since the WSJ’s original blockbuster, more women have come forward to accuse Wynn of abuse, including one former employee who said Wynn coerced her into sex multiple times back in the late 1980s because he said he wanted to know what it felt like to have sex with a grandmother, according to a Las Vegas Review-Journal report.

    In the statement, Wayson lauded Wynn for his “pivotal” role in “transforming Las Vegas into the entertainment destination it is today.”

    Since the original WSJ report, Wynn Resorts’ stock has shed almost a quarter of its value.

    * * *

    Read the statement in its entirety below:

    STATEMENT FROM WYNN RESORTS:

    The Board of Directors of Wynn Resorts reluctantly announced today that it accepted the resignation of Steve Wynn as CEO and Chairman of the Board of Directors.  The board has appointed Matt Maddox, currently President of the Company, as its CEO, and Boone Wayson as Non-Executive Chairman of the Board of Directors, effective immediately.

    “It is with a collective heavy heart, that the board of directors of Wynn Resorts today accepted the resignation of our founder, CEO and friend Steve Wynn,” said non-executive director of the board Boone Wayson.  “Steve Wynn is an industry giant.  He is a philanthropist and a beloved leader and visionary.  He played the pivotal role in transforming Las Vegas into the entertainment destination it is today. He also assembled a world-class team of executives that will continue to meet the high standards of excellence that Steve Wynn created and the Wynn brand has come to represent.”

    Steve Wynn created modern Las Vegas.  He transformed the city into an economic powerhouse by making it a world-wide tourist destination.  He designed, built and operated the most iconic resorts on the Las Vegas strip, beginning with the Mirage, then Treasure Island, the Bellagio, Wynn Las Vegas and Encore at Wynn Las Vegas.  Wynn Macau, Mr. Wynn’s first resort in the SAR of Macau in China, was designated by Forbes Travel Guide as the best resort in the world.  Along with Wynn Palace in Cotai, the company built by Steve Wynn has been recognized as having more Five Star awards than any independent hotel company in the world.

    Wynn Resorts remains as committed as ever to upholding the highest standards and being an inclusive and supportive employer.  In fact, more than 40 percent of all Wynn Las Vegas management are women; the highest in the gaming industry. The company will continue to fully focus on its operations at Wynn Macau, Wynn Palace and Wynn Las Vegas; the development and opening of the first phase of Wynn Paradise Park, currently under construction on the former Wynn golf course; as well as the construction of Wynn Boston Harbor, which will open in June 2019.  

    Details of Mr. Wynn’s separation agreement will be disclosed when they are finalized.

    STATEMENT FROM STEVE WYNN:

    “In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity.  As I have reflected upon the environment this has created — one in which a rush to judgment takes precedence over everything else, including the facts — I have reached the conclusion I cannot continue to be effective in my current roles.  Therefore, effective immediately, I have decided to step down as CEO and Chairman of the Board of Wynn Resorts, a company I founded and that I love.

    “The Wynn Resorts team and I have built houses of brick.  Which is to say, the institution we created — a collection of the finest designers and architects ever assembled, as well as an operating philosophy now ingrained in the minds and hearts of our entire team — will remain standing for the long term.   I am extremely proud of everything we have built at this company.  Most of all, I am proud of our employees.

    “The succession plan laid out by the Board of Directors and which I wholeheartedly endorse now places Matt Maddox in the CEO seat.  With Matt, Wynn Resorts is in good hands.  He and his team are well positioned to carry on the plans and vision for the company I created.  

    I want to thank all of the employees who have made Wynn Resorts the most admired resort company in the world, and for the support I have received from them in recent weeks.  Most importantly, I want everyone to continue to be proud of this company and the many unique ways it will forever continue to delight guests.”

     

  • Whole Foods Employees Miserable: "Seeing Someone Cry At Work Is Becoming Normal"

    Whole Foods’ new inventory management system aimed at improving efficiency and cutting down on waste is taking a toll on employees, who say the system’s stringent procedures and graded “scorecards” have crushed morale and led to widespread food shortages, reports Business Insider

    The new system, called order-to-shelf, or OTS, “has a strict set of procedures for purchasing, displaying, and storing products on store shelves and in back rooms. To make sure stores comply, Whole Foods relies on “scorecards” that evaluate everything from the accuracy of signage to the proper recording of theft, or “shrink.”

    Some employees, who walk through stores with managers to ensure compliance, describe the system as onerous and stress-inducing. Conversations with 27 current and recently departed Whole Foods workers, including cashiers and corporate employees — some of whom have been with the company for nearly two decades — say the system is seen by many as punitive. –BI

    Terrified employees report constant fear over losing their jobs over the OTS “scorecards,” which anything below 89.9% can qualify as a failing score – resulting in possible firings. 

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    Store managers test employees twice weekly, according to company documents, while corporate employees from the store’s Austin, Texas headquarters conduct monthly walkthroughs which stores must themselves pass. 

    I wake up in the middle of the night from nightmares about maps and inventory, and when regional leadership is going to come in and see one thing wrong, and fail the team,” a supervisor at a West Coast Whole Foods told Business Insider. “The stress has created such a tense working environment. Seeing someone cry at work is becoming normal.”

     

    Despite the heart-palpitating shortcomings of the OTS system, employees, supervisors and industry analysts have said that Whole Foods’ previous inventory management system was inefficient and needed to be updated. 

    “Whole Foods had a very decentralized approach, which adds complexity, and complexity adds cost,” said Jim Holbrook, CEO of private label and retail consultancy Daymon Worldwide, which recently started working with Whole Foods.

    Under the old system, buyers at the store and regional levels had more sway over what to sell. With OTS, however, those decisions have been shifted to the Austin corporate offices – a similar approach to conventional supermarkets like Safeway and Kroger. 

    It remains to be seen whether this business model — and OTS — will work for Whole Foods. Holbrook believes it will. He said Amazon, which purchased Whole Foods last year for $13.7 billion, would be able to help Whole Foods work out the kinks with OTS.

    “Amazon is very good at managing logistics behind the scenes,” Holbrook said. “Whole Foods will be a better shopping experience as a result.”

    Many employees are also hopeful that Amazon will fix the new system.

    “We all just hope that Amazon will walk into some stores and see all the holes on the shelf,” a 12-year employee of a Midwest Whole Foods said. –BI

    In their defense, Whole Foods says it’s order-to-shelf (OTS) system allows employees more time to engage with customers – a poorly thought out response. 

    “The team members are really excited about” order-to-shelf, said Whole Foods EVP of operations David Lannon last year on a call with investors, adding “They’re really proud when they’re able to achieve that, which is lower out-of-stocks, less inventory in the store, being able to be on the sales floor talking to customers and selling more products.”

    Boston Whole Foods (Paul Fantoni)

    Whole Foods employees around the country thought that was hilarious. One such disaffected West Coast supervisor said “On my most recent time card, I clocked over 10 hours of overtime, sitting at a desk doing OTS work,” adding “Rather than focusing on guest service, I’ve had team members cleaning facial-care testers and facing the shelves, so that everything looks perfect and untouched at all times.”

    Many Whole Foods employees at the corporate and store levels still don’t understand how OTS works, employees said.

    “OTS has confused so many smart, logical, and experienced individuals, the befuddlement is now a thing, a life all its own,” an employee of a Chicago-area store said. “It’s a collective confusion — constantly changing, no clear answers to the questions that never were, until now.”

    An employee of a North Carolina Whole Foods said: “No one really knows this business model, and those who are doing the scorecards — even regional leadership — are not clear on practices and consequently are constantly providing the department leaders with inaccurate directions. All this comes at a time when labor has been reduced to an unachievable level given the requirements of the OTS model.

    Other employees have complained about a lack of training as a key reason as to why the OTS system is failing. 

    “The problem lies in lack of training and the fact that every single member of management from store level to corporate is over tasked and overburdened,” according to one former corporate employee who conducted walkthroughs at East Coast locations. 

    Some even suggested that Whole Foods corporate had no clue about working in stores – and that the new OTS protocols were absurd. 

    “In the beginning, we actually had a checklist where one task was to initial that you initialed off another task.” 

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Today’s News 6th February 2018

  • Pentagon Auditor Can't Account For $800 Million In Spending

    The Pentagon’s Defense Logistics Agency (DLA) has reportedly “lost track” of hundreds of millions of dollars it spent,  said Ernst & Young, the accounting firm conducting the first-ever Pentagon audit, according to Politico.

    E&Y discovered that DLA “failed to properly document more than $800 million in construction projects,” said Politico, which also reported this is just one of the many instances where millions of dollars went missing as the accountability system inside the Pentagon is broken. Worse, according to Politico, the first-ever audit, covering the fiscal year that ended Sept. 30, 2016, signals complete incompetence about how the Pentagon handles its $700 billion annual budget.

    While these comments from Ernst & Young are mindnumbing, the Trump administration is set to ask Congress for $716 billion for defense spending for fiscal 2019, a 7% increase over the 2018 Budget. Budget analysts have sounded warnings this would be a significant surge in spending for the Pentagon at a time when the organization can barely keep track of its current expenditures.

    If you can’t follow the money, you aren’t going to be able to do an audit,” Sen. Chuck Grassley, an Iowa Republican and senior member of the Budget and Finance committees, who has suggested to past administrations that hemorrhaging of wasteful spending at the Pentagon must stop.

    Army Lt. Gen. Darrell Williams, the agency’s director, wrote in response to Ernst & Young’s bombshell findings that the audit has “provided us with a valuable independent view of our current financial operations.”

    “We are committed to resolving the material weaknesses and strengthening internal controls around DLA’s operations,” he said, according to Politico.

    The DLA is a $40 billion-a-year logistics agency within the Pentagon with some 25,000 employees and processes about 100,000 orders a day, said Politico.

    Ernst & Young’s auditors found significant accounting errors in DLA’s process of tracking expenditures. There are minimal accounting records of where the money is going said the report. This does not bode well for accountability at the Pentagon, which has combined assets of $2.2 trillion.The Politico describes one section of the audit where Ernst & Young’s auditors found misstatements for some $465 million in construction projects. Another section described that there was very little documentation for another $384 million worth of spending.

    In one part of the audit, completed in mid-December, Ernst & Young found that misstatements in the agency’s books totaled at least $465 million for construction projects it financed for the Army Corps of Engineers and other agencies. For construction projects designated as still “in progress,” meanwhile, it didn’t have sufficient documentation — or any documentation at all — for another $384 million worth of spending. The agency also couldn’t produce supporting evidence for many items that are documented in some form — including records for $100 million worth of assets in the computer systems that conduct the agency’s day-to-day business. “The documentation, such as the evidence demonstrating that the asset was tested and accepted, is not retained or available,” it said. 

    The auditor also said that around $100 million worth of assets in computer systems had very little documentation.

    The report, which covers the fiscal year that ended Sept. 30, 2016, also found that $46 million in computer assets were “inappropriately recorded” as belonging to the Defense Logistics Agency. It also warned that the agency cannot reconcile balances from its general ledger with the Treasury Department. 

    “The initial audit has provided us with a valuable independent view of our current financial operations,” Army Lt. Gen. Darrell Williams, the agency’s director, wrote in response to Ernst & Young’s findings. “We are committed to resolving the material weaknesses and strengthening internal controls around DLA’s operations.”

    In a statement to Politico, the DLA said it is the “first of its size and complexity in the Department of Defense to undergo an audit so we did not anticipate achieving a ‘clean’ audit opinion in the initial cycles.”

    “The key is to use auditor feedback to focus our remediation efforts and corrective action plans, and maximize the value from the audits. That’s what we’re doing now,” the statement said.

    Back in January, the team of 1,200 auditors found some $830 million in “missing” helicopters as the audit kicked off into 2018.

    And in a preview of what is to come, Norquist told the House Armed Services Committee that an initial Army audit found 39 UH-60 Black Hawk helicopter ($830,700,000) were not adequately recorded in the property system. “The Air Force identified 478 structures and buildings at 12 installations that were not in its real property system,” he added. In other words these helicopters were simply “missing” on the books. 

    As the army of auditors penetrates deep inside the Pentagon’s financial records, we wonder what the 1,200 will find next as they descend further down the rabbit hole of decades of failed proxy wars, regime changes and dictator slush funds?

  • Will The Conspiracy Against Trump And American Democracy Go Unpunished?

    Authored by Paul Craig Roberts,

    Dear Readers,

    This is one of the most important articles I have written, along with this one.

    If the Russiagate conspiracy against Trump and American democracy goes unpunished, accountable government in the United States will cease to exist. US security agencies have long been involved in coups against foreign governments. Now they are involved in one against America.

    There is great danger that Republicans are so worshipful of “national security” and so determined to protect the reputation of the US government that they will give a pass to the high officials who participated in a conspiracy against the United States.

    As for President Trump, he lacks a government that he can count on and is threatened by the military/security complex. The conspiracy could easily be whitewashed as merely a case of the FBI and DOJ not following proper procedures, with the media’s participation in the conspiracy being dismissed with mea culpas of “sloppy reporting.”

    Will The Conspiracy Against Trump and American Democracy Go Unpunished?

    “In keeping silent about evil, in burying it so deep within us that no sign of it appears on the surface, we are implanting it, and it will rise up a thousand fold in the future. When we neither punish nor reproach evildoers, we are not simply protecting their trivial old age, we are thereby ripping the foundations of justice from beneath new generations.”  –  Aleksandr I. Solzhenitsyn

    The American people do not realize the seriousness of the Russiagate conspiracy against them and President Trump. Polls indicate that a large majority of the public do not believe that Trump conspired with Putin to steal the presidential election, and are tired of hearing the media prostitutes repeat the absurd story day after day. On its face the story makes no sense whatsoever. Moreover, the leaked emails are real, not fabricated. The emails show exactly what Hillary and the DNC did. The public knows that these transgressions were pushed out of news sight by the false story of a Trump/Putin conspiracy. The fact that the entirety of the US print and TV media served in a highly partisan political way to bury a true and disturbing story with a fake news story—Russiagate—is one reason some polls show that only 6% of Americans trust the mainstream media. All polls show that large majorities of independents, Republicans, and youth distrust the mainstream media. In some polls about half of Democrats trust the media, and that is because the media is servant to Democratic Party interests.

    Russiagate is a dagger aimed at the heart of American governmental institutions. A conspiracy involving top officials of the Obama Department of Justice, FBI, and other “security” agencies was formed together with Hillary Clinton and the Democratic National Committee, the purpose of which was to defeat Trump in the presidential election and, failing that, to remove Trump from office or to discredit him to the point that he would be reduced to a mere figurehead. This conspiracy has the full backing of the entirely of the mainstream media.

    In other words, it was a coup not only against Donald Trump but also against American democracy and the outcome of a presidential election.

    There is no doubt whatsoever about this. The facts are publicly available in the declassified Top Secret Memorandum Opinion and Order of the FISA Court  and in the declassified report from the House Intelligence Committee—given by the presstitutes the misleading name of the “Nunes Memo,” as if it is Nunes’ personal opinion and not the findings of months of work by an oversight committee of Congress..

    All of this information has been posted on my website for some time. If you have difficulty following my explanation, former US Attorney Joe DiGenova explains the felony actions by the FBI and Obama Justice (sic) Department here.

    Briefly, the National Security Agency discovered that the FBI and DOJ were abusing the surveillance system. As a favor of one security agency to another, NSA Director Adm. Rogers permitted the FBI and DOJ to rush to the FISA Court and confess their transgressions before the NSA informed the Court. The FBI and DOJ pretended that their deception of the Court in order to obtain surveillance warrants for highly partisan political purposes was not due to their intent but to procedural mistakes. The FBI and DOJ told the Court that they were tightening up procedures so that this would not happen again. The FISA Court Memorandum and Order clearly states:

    “On October 24, 2016, the government orally apprised the Court of significant non-compliance with the NSA’s minimization procedures involving queries of data acquired under Section 702 using U.S. person identifiers. The full scope of non-compliant querying practices had not been previously disclosed to the Court.”

    What this legalese jargon is saying is the the FBI and DOJ confessed to obtaining warrants under false pretexts. These are felonies.

    The FISA Court Memorandum and Order is about resolving these deficiencies and returning the FBI and DOJ to legal practices. For example, the Court Memorandum and Order says:

    “On January 3, 2017, the government made a further submission describing its efforts to ascertain the scope and causes of those compliance problems and discussing potential solutions to them. See January 3, 2017, Supplemental Notice of Compliance Incidents Regarding the Querying of Section 701-Acquired Data (“January 3, 2017 Notice”). The Court was not satisfied that the government had sufficiently ascertained the scope of the compliance problems or developed and implemented adequate solutions for them and communicated a number of questions and concerns to the government.”

    In other words, the FBI and DOJ were attempting to make corrections to their “compliance problems” in ways that would allow them to continue to mislead the FISA Court, and the Court wasn’t letting them.

    The FISA Court Memorandum and Order was released prior to the House Intelligence Committee report and has been completely ignored by the utterly corrupt press prostitutes. The FISA Court Memorandum and Order, relying on the confessions of the FBI and DOJ, verifies the House Intelligence Committee report that the FBI and DOJ illegally obtained spy warrants for partisan political purposes.

    Rep. Adam Schiff, a Democrat who is a disgrace to the voters of his California district, to the Democratic Party, and to the House of Representatives, knows full well that the FBI and DOJ deceived the FISA Court. Schiff is so partisan that he lies to the hilt in the face of hard documented evidence from both the FISA Court and his own House committee. Schiff is so totally devoid of all honesty and integrity that he is the perfect leader for a shithole country, something that he and his ilk are turning the United States into.

    The honest left—not the Identity Politics left, which is a collection of deranged idiots—does not believe a word of the concocted Russiagate conspiracy against Trump. They object to the Russiagate conspiracy not because they like Trump, which they most certainly do not, but because they understand that it is a lie directed against truth. They understand that the American mainstream media has deserted factual, truthful reporting and serves as a propaganda ministry for the war/police state that American is becoming.

    For example, Eric Zuesse holds The Atlantic and its presstitute writer, David A. Graham, to account for lying about the House Intelligence Report.

    Andre Damon writes on the World Socialist Web Site:

    “The Democratic Party was thrown into disarray Friday after the publication of a classified memo exposing as a factionally-motivated witch hunt the investigation by leading intelligence agencies into the Trump administration’s alleged collusion with Russia. . . . The release of the memo once again underscores the fact that the US intelligence agencies have massively intervened in US politics.

    The real left, as opposed to the fake left, understands that the people have no chance when the highest officials of the Department of Justice and the security agencies join in a conspiracy against a democratic outcome. When the justice and police authorities have no respect for the truth, as the Russiagate conspiracy proves, the people are doomed. If the FBI-DOJ-DNC-presstitute conspiracy goes unpunished, The Lie will have prevailed over The Truth and all of us will be endangered.

    The important question before us is: will the treasonous criminals in the FBI, DOJ, and DNC be indicted and held responsible? Or do high government officials get a pass as do the police who rob and murder citizens and never face justice for their crimes?

    From the sound of things, it looks like they will get a pass. Rep. Nunes felt compelled to say on TV how much he likes Deputy Attorney General Rod Rosenstein, who is a party to the deception of the FISA Court. President Trump says he will not fire the conspirator against him, Robert Mueller, even though both Trump and Mueller know that the Russiagate investigation headed by Mueller is a concocted conspiracy against American democracy and the President of the United States. It seems that high government officials, like state and local police and executives of “banks too big to fail,” are above the law.

    What about the FISA Court, readers ask, why did the FISA Court let the FBI and DOJ get away with their illegal acquisition of spy warrants? Once the Court knew about it, the Court did not let them get away with it, as the Memorandum and Order makes clear. The FISA Court does not have prosecutorial power to indict and bring a case against the FBI and DOJ criminals. That has to be done by the DOJ, and the DOJ is not going to indict itself.

    Former US Attorney Joe DiGenova believes that continuing investigations will result in high officials being indicted, convicted, and sent to prison. If the US is to have any future as a country in which government is accountable to law, it is essential that DiGenova be correct. However, I will believe it when I see it.

  • Only 3.8% Of Americans Work More Than 60 Hours A Week

    For many people around the world, Friday doesn’t signal the end of the working week.

    Working hours are affected by many factors including necessity in the case of people working for the emergency services, company expectations, individual drive as well as cultural reasons in different nations. As Statista’s Niall McCarthy notes, OECD research has shed light on the countries where workers are putting in 60 hours plus every week. Thankfully, the share is still low in most countries, though it does rise alarmingly in several places.

    Infographic: Where The Most Workers Put in A 60-Hour Week  | Statista

    You will find more infographics at Statista

    Nearly a quarter of Turkish employees worked 60 hours or more per week in their main job in 2015, the most recent year data is available, according to the OECD.

    Asian countries in particular have earned themselves bad reputations for poor work life balance. In South Korea, the share working very long working hours stands at 22.6 percent. In Japan, cases where people have literally died from work-related stress have made headlines and prompted the government to change attitudes towards work. There is even a word in Japanese for death from overwork – “karoshi”. Workers in Japan are known to stay late and avoid taking holiday but the share working 60 hours plus is still far less than in South Korea, 9.2 percent.

    The United States is also seen as a nation of workaholics with its reputation for good work life balance tarnished by a poor number of vacation days and no paid maternity leave for new mothers (though California is the first state to offer six weeks of partially paid paternity leave). Most Americans avoid late evenings in the office with the share working 60 hours or more coming to 3.8 percent.

  • The Increasing Likelihood Of Nuclear War Should Straighten Out All Our Priorities

    Authored by Caitlin Johnstone via CaitlinJohnstone.com,

    A Russian pilot has been killed by US-armed terrorists in Syria. The Ron Paul Institute‘s Daniel McAdams writes the following about this new development:

    “The scenario where a US-backed, US-supplied jihadist group in Syria uses US weapons to shoot down a Russian plane and then murders the pilot on the ground should be seen as a near-nightmare escalation, drawing the US and Russia terrifyingly closer to direct conflict.”

    McAdams is not fearmongering; he is stating a plainly obvious fact.

    The Trump administration has just announced that it is restructuring its nuclear weapons policy to take a more aggressive stance toward Russia than that which was held by the previous administration. This is coming after this administration’s decision to arm Ukraine against Russia, a move Obama refused to take for fear of escalating tensions with Moscow, as well as its decision to continue to occupy Syria in order to effect regime change, along with numerous other escalations. The Council on Foreign Relations, which is without exaggeration as close to the voice of the US establishment as you can possibly get, is now openly admitting that the “United States is currently in a second Cold War with Russia.”

    In a recent interview with The Real News, leading US-Russian relations expert Stephen Cohen repeated his ongoing warning that “this new Cold War is much more dangerous, much more likely to end in Hot War, than was the 40-year of Cold War, which we barely survived.” In a previous interview with the same outlet, Cohen elaborated more extensively:

    “We are in new cold war that is much more dangerous than the last cold war for various reasons. One is that the new cold war today, as we talk, includes three fronts. U.S.-Russian fronts, they’re fought with hot war. That’s Syria. That’s the reckless NATO military build-up on Russia’s western boarders, which has resulted in a situation today that ordinarily artillery, not missiles, ordinary artillery, can hit Russia’s second city of Saint Petersburg. Just think about that and the instability. And the third front is Ukraine.”

    Cohen explains how the political pressures placed on Trump by the ongoing fact-free allegation that he is a Kremlin puppet makes it far more difficult for him to negotiate on these multiple fronts agilely, thus making it much more likely that Trump will choose to advance when he should retreat, hold his ground when he should back down, and generally be locked into patterns of aggression and forward movement rather than the back-and-forth finesse required for safe cold war negotiations with a nuclear superpower

    We came within a hair’s breadth of nuclear annihilation on more than one occasion during the last cold war, and the further things escalate in this new one the more likely we are to tempt fate again. The only reason we survived the extremely tense stand-offs in the last cold war ultimately boiled down to pure dumb luck in some cases, and there’s no legitimate reason to believe we’ll get lucky again.

    To be clear, I am not saying that the US or Russia actually want nuclear war. Two men with guns pointed at one another in a conventional standoff generally don’t want either weapon to discharge, either. What I am saying is that we learned in situations snatched from the brink of disaster by men like Stanislov Petrov and Vasili Arkhipov that there are too many small, unpredictable moving parts involved in a nuclear standoff for cold war escalations to unfold safely and predictably, and the more tense things get the more likely it becomes that a nuclear warhead gets discharged in the chaos and confusion. Once a single warhead goes off, Mutually Assured Destruction comes into play. Add into that the hot war dynamics and political pressures described by Stephen Cohen and we’re looking at some very uncomfortable odds as a species.

    In my view most of the political disagreements I have with people ultimately boil down to this. I see us as facing an immediate existential crisis as a species that needs to be dealt with right now, and people say I should be more worried about this or that conservative figure saying rude things on Twitter. We are facing the very real possibility of near-term human extinction; I don’t know how to care about the petty sectarian squabbles in America’s various political factions. It really is time for us to all get over ourselves and grow up.

    This unprecedented crisis should be drawing us together, yet we’re more politically divided than ever. It is evolve or die time, and we’re all still arguing over airplane peanuts while the plane is in a full nose dive.

    Thought experiment:

    Imagine if you wake up one morning and turn on the TV to an emergency broadcast alert that a nuclear weapon has been discharged by either the US or Russia in the chaos and confusion of this convoluted new cold war, and saying that you need to seek shelter immediately.

    What thoughts will go through your head as the realization dawns that this is really happening? Do you imagine that you will be spending much time thinking about how Trump said “shit hole countries”? Will you spend your last moments on earth mentally shaking your fist at Antifa and “libtards”? Or will you instead perhaps wish that you and your brothers and sisters around the world had more aggressively opposed these new cold war games your leaders have been playing?

    It is entirely possible that you will one day in the near future find yourself in this very situation and answering the questions I just asked you for yourself.

    Let’s skip that part of our story together, please. The reason they need to work so hard to manufacture consent for these escalations is because they require that consent. If we all loudly raise our voices and say “No. Enough. This ends now,” they will necessarily have to obey. The Russiagate psyop exists because the western power establishment is trying to cripple the Russia-China tandem in order to ensure US hegemony, and if they tried to thrust us all into a new cold war without our permission they’d shatter the illusion of freedom and democracy they depend on to rule you. If we all rise as one voice and withdraw that permission, they will be forced to obey.

    Can we do this, please? Can we make ensuring our survival into the future a priority right now and put bickering over identity politics and the president’s tweets on the back burner until then? We’ll have a whole future ahead of us to sort that stuff out if we survive the urgent crisis we are facing right now.

  • Tesla Threatens To Shutter Hong Kong Operations Unless City Revives EV Tax Waiver

    Tesla is deeply indebted to the US government, and the governments of many European nations, that have helped bolster sales of electric vehicles with attractive tax incentives. The importance of these handouts to Tesla’s bottom line cannot be understated, as investors reminded us back in November, when reports that the GOP tax plan would eliminate the US electric-car credit sent Tesla shares spiraling to their worst daily drop ever, a day after the company announced its worst quarterly performance history (Tesla will report results for the October through December period later this week).

    So it shouldn’t come as a surprise that, after Hong Kong last year decided to remove its full registration tax waiver on electric cars for private use, Tesla is threatening to shutter its operations in the city unless its administrator, Carrie Lam Cheng Yuet-ngor, revives the waiver.

    By reinstating registration taxes on electric vehicles, the city’s government forced buyers to pay as much as 80% more for high-end models like the Tesla, according to the South China Morning Post.

    Elon Musk reportedly sent the city’s administrator a strongly worded letter asking that the tax be reinstated.

     

    Tesla

    The decline in sales was staggering: After 2,078 new electric vehicles were registered between April and December 2016, that number dropped to 99 last year – though reports that the waiver could be reinstated helped sales rebound in March.

    With the tax waiver capped at HK$97,500 from April 1 last year, sales of electric cars nosedived. Only 99 new cars were registered from April to December last year, compared with 2,078 in the same period the year before.

    Sales at Tesla, which employs 200 people in the city, were hit hardest. It sold 32 cars from April to December, although 2,939 cars were snapped up in March, as buyers rushed to its showrooms after Financial Secretary Paul Chan Mo-po’s announcement that the waiver was ending in last year’s budget.

    An average of 230 Teslas were sold each month from April 2016 to February 2017, mostly of the Model S, the top-selling sedan in the city in 2015. To the excitement of consumers, the car also featured on ride-sharing app Uber.

    “Scaling down Tesla’s operation in Hong Kong is a natural and logical consequence if the number of customers has dwindled prompted by a reduction of government incentives,” the source said. “Without government support, who is ­willing to invest in green technology?”

    Asked for its comments, Tesla told the Post on Sunday: “Our launch in Hong Kong in 2010 was one of Tesla’s earliest, and we remain committed to our customers here, affirming that commitment with the opening of our second Service Centre last year.

    “We remain hopeful that the government will continue to encourage more electric vehicles on the road and preserve Hong Kong’s lead in clean, sustainable living.”

    According to the SCMP, industry sources said that big manufacturers have urged Chan to remove the full tax waiver for electric cars because they were threatened by their rapid growth in the city, especially of Tesla, which dominated about 90% of the market. BMW, Nissan, Volkswagen and Renault also sell electric cars in the city.

    “The sale of Tesla cars in one month was equal to the annual sales figure of some petrol car brands,” the source said. “They all complained that the rapid growth of Tesla these few years had made their lives really difficult.”

    Tara Joseph, president of the American Chamber of Commerce in Hong Kong, said the chamber was “puzzled” by the city’s policy change, reminding the government that green technology firms like Tesla require “policy transparency” to operate efficiently.

    “Chief Executive Carrie Lam has said she wants to attract leading global tech firms to Hong Kong, but green technology companies, like all companies, require policy transparency and assurance,” she said.

    Musk caught a break back in November when Norway – a crucial market for Tesla – announced it had abandoned plans to impose the so-called “Tesla tax” which would’ve tacked on a more than $100,000 levy to sales of electric vehicles weighing over 2 tons – a group that would pretty much only include Tesla.

    Circling back to Hong Kong, a spokesperson for the city’s government told the SCMP that in deciding on tax ­concessions for EVs last year, the government had considered the narrowing price difference ­between electric cars and fuel engine models, and “its public transport-oriented policy”.

    Electric car owners, as well as getting a tax break, “also enjoy lower annual car licence fees and fuel costs”, the spokesman said.

    is ­prepared to reduce its Hong Kong operations if the government fails to give residents incentives to buy battery-powered cars in its ­upcoming budget.

    Electric cars cost between HK$270,000 ($34,500) and HK$1.1 million ($140,646) before tax. A progressive tax is ­applied on motor vehicle registration, starting at 40% of the first HK$150,000 ($20,000) of the vehicle’s taxable value.

    This is only the latest setback for Musk and Tesla, which have staggered from one embarrassment to the next over the past six months as production of Tesla’s Model 3 Sedan has progressed much more slowly than Musk had promised his customers, some of whom submitted preorder payments for the Model 3 nearly 2 years ago.

    We’ll see how this dropoff impacts Tesla’s earnings, which are due out Wednesday. Investors will be watching to see if the company’s trend of burning through increasingly obscene amounts of cash continued through the end of 2017.

    Tesla

     

  • 1000s Of Jobs In Ohio Are Left Unfilled Because People Can't "Pass A Drug Test"

    Authored by Tim Pearce via The Daily Caller,

    The manufacturing industry in Ohio is expanding under the Trump administration, but growth is stunted because many potential employees are also addicted to drugs.

    Steve Staub, who runs Staub Manufacturing Solutions in Ohio, attended the State of the Union address Tuesday as a special guest to President Donald Trump. While there, aside from participating in the pageantry, Staub discussed problems in the manufacturing industry and business in general with the president.

    Staub mentioned to Trump the toll the opioid crisis has had on business’ ability to fill jobs. About two million Americans nationwide are addicted to the drug. The crisis has been particularly hard on Staub’s home state of Ohio, were thousands of job applicants are turned away because of substance abuse.

    “In Ohio alone, they have about 20,000 available jobs in manufacturing. In Dayton, Ohio, where I’m from, we have about 4,000 jobs available today in manufacturing that we can’t fill,” Staub told TheDCNF.

    “We can’t get people to pass a drug test.”

    Other area’s on Staub’s list of concerns are taxes, regulations, health care, and infrastructure.

    The Trump administration has made significant, direct strides in two of those areas. At the end of 2017, Trump signed into law the GOP tax plan and unleashed a torrent of investment in the form of raised wages and bonuses. The Trump administration has also reversed the expansion of the regulatory state, which increases the costs of doing business.

    Republicans punted on health care, however, as they could not build the support needed to reform or repeal the Affordable Care Act, known widely as Obamacare.

    The fate of Trump’s infrastructure plan remains to be seen. Trump championed a $1.5 trillion infrastructure investment plan during his address to Congress last week.

    “Together, we can reclaim our building heritage,” Trump said. “We will build gleaming new roads, bridges, highways, railways, and waterways all across our land. And we will do it with American heart, American hands, and American grit.”

    More than anything, Staub believes the Trump administration has had the greatest impact on the “overall optimism” of the manufacturing industry and business in general as companies adopt plans for growth and expansion. The National Association of Manufacturers, in their Manufacturers’ Outlook Survey taken every quarter for two decades, found optimism to be at an all-time high in the last quarter of 2017.

    Along with the financial boost from the GOP tax plan, companies began implementing their strategies  for growth almost immediately.

    “We’ve gave a much larger Christmas bonus than we were going to when [tax reform] passed,” Staub told TheDCNF of his own company.

    “We are giving raises to everybody, and we went ahead and expanded and bought the building next door to us that was for sale as part of our future growth.”

    Still, it appears achieving the optimistic goals comes back to hiring the right people and that seems to be tough to find in America today.. not because of “wrong skills” but because everyone’s loaded… all the time.

    Emergence of a crisis

    1861-1865 – During the Civil War, medics use morphine as a battlefield anesthetic. Many soldiers become dependent on morphine after the war.

    1898 – Heroin is first produced commercially by the Bayer Company. At the time, heroin is believed to be less habit-forming than morphine, so it is dispensed to individuals who are addicted to morphine.

    1914 – Congress passes the Harrison Narcotics Act, which requires that doctors write prescriptions for narcotic drugs like opioids and cocaine. Importers, manufacturers and distributors of narcotics must register with the Treasury Department and pay taxes on product.

    1924 – The Anti-Heroin Act bans the production and sale of heroin in the United States.

    1970 – The Controlled Substances Act becomes law. It creates groupings (or schedules) of drugs based on the potential for abuse. Heroin is a Schedule I drug while morphine, fentanyl, oxycodone (Percocet, OxyContin) and methadone are Schedule II. Vicodin – a hydrocodone-acetaminophen combination – was originally a Schedule III medication but wasn’t recategorized as a Schedule II drug until October 2014.

    January 10, 1980 – A letter titled “Addiction Rare in Patients Treated with Narcotics” is published in the New England Journal of Medicine. It was not a study and looked at incidences of addiction in a very specific population of hospitalized patients who were closely monitored. However, it would become widely cited as proof that narcotics were a safe treatment for chronic pain.

    1995 – OxyContin, a long acting version of oxycodone, which slowly releases the drug over 12 hours, is introduced and aggressively marketed as a safer pain pill by manufacturer, Purdue Pharma.

    May 10, 2007 – The federal government brings criminal charges against Purdue Pharma for misleadingly advertising OxyContin as safer and less addictive than other opioids. The company and three executives are charged with “misleading and defrauding physicians and consumers.”Purdue Pharma and the executives plead guilty, agreeing to pay a $634.5 million in criminal and civil fines. The three executives plead guilty on criminal misdemeanor charges and are later sentenced to probation.

    2010 – FDA approves an “abuse-deterrant” formulation of OxyContin, to help curb abuse. However, people still find ways to abuse it.

    May 20, 2015 – The DEA announces that it has arrested 280 people, including 22 doctors and pharmacists, after a 15-month sting operation centered on health care providers who dispense large amounts of opioids. The sting, dubbed Operation Pilluted, is the largest prescription drug bust in the history of the DEA.

    March 18, 2016 – The CDC publishes guidelines for prescribing opioids for patients with chronic pain. Recommendations include prescribing over-the-counter pain relievers like acetaminophen and ibuprofen in lieu of opioids. Doctors are encouraged to promote exercise and behavioral treatments to help patients cope with pain.

    March 29, 2017 – President Donald Trump signs an executive order calling for the establishment of the President’s Commission on Combating Drug Addiction and the Opioid Crisis. New Jersey Governor Chris Christie is selected as the chairman of the group, with Trump’s son-in-law, Jared Kushner, as an adviser.

    July 31, 2017 – After a delay, the White House panel examining the nation’s opioid epidemic releases its interim report, asking President Trump to declare a national public health emergency to combat the ongoing crisis.

    August 8, 2017 – Trump holds a press briefing on opioids at his New Jersey golf club and says that a stronger law enforcement response is needed to combat the crisis. He stops short of declaring a national public health emergency.

    August 10, 2017 – The White House issues a press release stating that Trump is directing his “administration to use all appropriate authority to respond to the opioid emergency.” The administration does not, however, make a formal declaration of a national public health emergency, which would free up resources and funding to help opioid addicts and jumpstart prevention programs.

    September 22, 2017 – The pharmacy chain CVS announces that it will implement new restrictions on filling prescriptions for opioids, dispensing a limited seven-day supply to patients who are new to pain therapy.

    October 26, 2017 – President Trump declares a national public health emergency to combat the opioid crisis, telling an audience in the East Room of the White House that “we can be the generation that ends the opioid epidemic.”

     

  • Dow Futures -600Pts, Hong Kong Down 6%, Bitcoin Tests $6000

    Update 1100ET: As Asia resumes trading after the lunch break, things have gone from worst to worst-er.

    Dow Futures are down 600 points from the close…

    The Dow is now down 3600 points from its highs – Dow 22,687 is the next target to the downside (200DMA)

    With Nasdaq and S&P following…

    Asian equities are a bloodbath with Hang Seng China down 6.1% – its biggest drop since 2011…

    And Bitcoin’s bounce into the US equity close has evaporated…

    And may have further to fall…

    Rate-hike expectations are plummeting…

    Time for a rate-cut?

    *  *  *

    Playing catch-up, or worse, appears to be the opening scenario for Asian equities which are down from around 2% (Malaysia) to 5% (Japan) but perhaps more importantly, Treasury yields continue to tumble.

    US Equity futures are continuing to tumble in overnight trading – all entering the 10% technical correction…

    On the bright side, Japanese stocks are not down as much as Nikkei futures were in the US session…

     

    But the loss of faith in Fed rate hikes continues as 2Y yields tumble back below 2.00%…

     

    Asian FX is also extending its drop against the dollar…

    And while the dollar is stronger, gold is also bid…

  • FBI Warns Facebook Users Not To Share Viral VIdeo

    The FBI and local law enforcement officials across the country are warning Facebook users not to share a disturbing video that’s been making the rounds over the past week. The video depicts an adult sexually abusing a child, and is legally considered child pornography – which is illegal both to watch and to share.

    Strangely, people are sharing the video online purport to have good intentions: The video has been widely shared as part of an online crusade to hold the adult in the film accountable.

    But law enforcement officials are reminding them that – no matter their intentions – this behavior is still a crime.

    Facebook’s communications department has also issued a warning of its own.

    “The sharing of child exploitative images – regardless of intention – is harmful and illegal,” Facebook’s media team said in a statement.

    We have turned off KSAT-12’s ability to receive messages on Facebook due to the viral spread of the video and have instructed our news team to do the same with their own fan pages.

    Law enforcement officials across the country are reaching out to their local media stations to get the word out.

    “If you saved it, if you posted it to your page, if you sent it to someone else,” Tim Gann, Madison County Chief Trial Attorney explained told a local TV station. “you’re disseminating child porn and that’s a felony. If you are in possession of it, no matter your good intentions, that is also a felony. So, in this case, it’s very disturbing that people feel like it’s ok to post something awful happening to a child on social media.”

    In New York State, the Polk County Sheriff’s Office says people have been flooding their inboxes for weeks now with a video they say is too disturbing to even describe.

    “PLEASE DO NOT SHARE those images or video,” said the Polk County Sheriff’s Office said in a message posted to their Facebook page. “Images and video depicting the sexual abuse of a child are pornography. Sharing them, even if your intent is to help, is a crime and continues to victimize the child.”

    As Gann explains, every time the video is shared, the child depicted in it is victimized again.

     

    Polk

    But above all, law enforcement officials have been stunned by the video’s spread.

    “We can not have child pornography going viral,” said Jay Town, the US attorney for the Northern District of Alabama.

    Unfortunately, it appears to be too late for that.

     

  • Trump, Davos, And Free Trade

    Authored by James Rickards via The Daily Reckoning,

    After Trump announced the steep 30% U.S. tariffs on imports of solar panels and washing machines, the Chinese Commerce Ministry expressed “strong dissatisfaction” and said it “aggravates the global trade environment.”

    Trump is not done with tariffs. In the days and weeks ahead, we can expect further announcements with regard to steel and aluminum imports to the U.S. Again, such imports come largely from China, but the tariffs will likely affect all exporters to the U.S.

    Ironically these announcements came just as President Trump was preparing to go to Davos, Switzerland for the World Economic Forum.

    The Davos elites vehemently oppose both trade and capital controls, preferring instead a globalist “one-world” approach. The only problem with the Davos elite theory is that it is empirically, historically and analytically wrong.

    The theory of free trade is based on an idea called “comparative advantage.” This idea goes back to David Ricardo, an early 19th century British economist. Ricardo’s theory was that countries should not try to be self-sufficient in all manufacturing, mining and agriculture.

    Instead countries should specialize in what they do best, and let others also specialize in what they do best. Then countries could simply trade the goods they make for the goods made by others. All sides would be better off because prices would be lower as a result of specialization in those goods where you have a natural advantage.

    It’s a nice theory often summed up in the idea that Tom Brady should not mow his own lawn because it makes more sense to pay a landscaper while he practices football.

    But, the theory is flawed. For one thing, comparative advantage is not static. It changes over time. Importantly comparative advantage can be created from thin air. Taiwan had no comparative advantage in semiconductors in the 1980s, but the government made a political decision to create the state-sponsored Taiwan Semiconductor Manufacturing Company.

    Today Taiwan Semiconductor is the largest supplier of semiconductors in the world. The government nurtured Taiwan Semiconductor with tariffs and subsidies when it was most vulnerable to foreign competition. Today Taiwan Semiconductor is a publicly traded company that competes effectively around the world, but it would never have attained that status without government help in its early days.

    If the theory of comparative advantage were true, Japan would still be exporting tuna fish instead of cars, computers, TVs, steel and much more.

    The same can be said of the globalists’ view that capital should flow freely across borders. That might be advantageous in theory but market manipulation by central banks and rouge actors like Goldman Sachs and big hedge funds make it a treacherous proposition.

    In the depths of the Asian financial crisis of 1997, Malaysian Prime Minister Mahathir closed Malaysia’s capital account to preserve hard currency and defend his exchange rate. Mahathir was excoriated at the time by the likes of George Soros. Soros went so far as to call Mahathir a “menace to his country.”

    But scholars today agree that Mahathir made the right move. In recent years, even the IMF has said there are certain circumstances where capital controls are fully justified.

    If open trade, and open capital flows are flawed ideas, why do the Davos elite support them?

    The answer is that these theories, which have superficial appeal to everyday citizens, are the perfect smokescreen for the elites’ hidden agenda. That agenda is to diminish the power of the United States, and the U.S. dollar, in world affairs and to enhance the power of rising nations especially China.

    If several hundred million Chinese can be pulled from poverty by leaving the U.S. market open while China subsidies its companies, imposes its own tariffs, steals intellectual property, and limits U.S. foreign direct investment, then that’s fine. If U.S. workers lose their jobs in the process, that’s fine too. The elites don’t care about the U.S.; they only care about their “one world” vision.

    Trump is calling their bluff. When Trump says “America First” he means it. So does Trump’s top trade advisor Robert Lighthizer. Lighthizer is a veteran of the Reagan administration who forced the Japanese to move their auto plants to the U.S. in the 1980s by imposing steep tariffs on Japanese imported cars.

    Thousands of high-paying U.S. manufacturing jobs were created as a result. Lighthizer plans to run the same playbook against the Chinese today.

    Lighthizer is part of a hawkish “Trade Troika” consisting of himself, Secretary of Commerce Wilbur Ross, Jr. and White House trade advisor Peter Navarro. All three are urging President Trump to impose a set of tariffs on China involving not only washing machines and solar panels, but steel, aluminum, and theft of intellectual property.

    Opposing the Trade Troika are trade doves including National Economic Advisor Gary Cohn, Chief of Staff John F. Kelly, Secretary of State Rex Tillerson and the CEOs of major global corporations such as Boeing, Apple and General Motors that all derive large profits from Chinese operations.

    The hawks and doves fought each other to a standstill in 2017 because of wishful thinking about Chinese help on North Korea and the importance of a united front to pass the tax bill. With hopes for China now dispelled and the tax bill passed into law, the trade agenda is front and center.

    This is not a “kick-the-can-down-the-road” situation. Trump is confronting hard deadlines on key decisions.

    America has always prospered with high tariffs to protect its industries. From Alexander Hamilton’s plan for infant manufacturing to Henry Clay’s American Plan, the U.S. has always known how to protect its industries and create American jobs. Trump is returning to that tradition.

    The problem is that this will not be a smooth ride. It will take years for U.S. solar panel manufacturers to get back on their feet. (One of the largest U.S. firms filed for bankruptcy protection last year, but it continues to operate in reorganization under court supervision.)

    A full-scale trade war will hurt world growth even as it helps U.S. growth. Given the trillions in dollar-denominated debt in emerging markets, a full-scale foreign sovereign debt crisis could be in the making if those emerging markets countries cannot earn dollars from exports to pay their debts.

    Trump did not impose these tariffs in 2017 because he needed Chinese help with the North Korean situation. But, China did not do all it could in North Korea, and there is good evidence that China is helping North Korea cheat on existing sanctions.

    As if to rub salt in the wound, China reported today that its 2017 trade surplus with the U.S. was $275 billion, the highest ever.

    Once China’s lack of cooperation on North Korea became clear, Trump saw no harm in confronting China on trade, something he’s been talking about since the summer of 2015 during the early days of his campaign.

    The Chinese may choose to retaliate not so much with their own tariffs, but with other forms of financial warfare including its threats to persify its reserves away from U.S. Treasuries.

    As China buys fewer U.S. Treasuries, the most likely substitute asset class is gold. This is one more reason to expect that the recent weak dollar and strong gold trends to continue for the remainder of this year and beyond.

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Today’s News 5th February 2018

  • Israel And Egypt Form Secret Alliance To Wipe Out Egyptian Jihadists

    Israel has been conducting bombing raids on jihadists within Egypt’s borders since at least late 2015 as part of a secret two-year alliance. For more than two years, unmarked Israeli drones, helicopters and jets have carried out a covert air campaign, conducting more than 100 airstrikes inside Egypt, frequently more than once a week — and all with the approval of President Abdel Fattah el-Sisi, the NYT reported on Sunday.

    Once enemies in three wars, and having struggled to reach peace agreements for decades, Egypt and Israel are now (not so) secret allies against a common foe.

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    Prime Minister Benjamin Netanyahu of Israel at a conference in December (Getty)

    In late 2015, jihadists in Egypt’s Northern Sinai moved in, killing hundreds of soldiers and police officers and briefly seizing a major town – setting up armed checkpoints as they established control over the area. On October 31, 2015, the Islamic State of Iraq and the Levant’s Sinai branch, formerly known as Ansar Bait al-Maqdis, brought down a Russian passenger flight with an explosive device – killing all 224 people aboard.

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    Russian passenger jet downed by Egyptian jihadists 

    With Egypt seemingly unable to stop the jihadists, Israel – alarmed by the threat just over the border, began taking action – sending a barrage of airstrikes into the neighboring Arab country whose officials and media continued to vilify the Jewish state in public. 

    In order to conceal their involvement, Israel’s drones, jets and helicopters have covered up their markings. “Some fly circuitous routes to create the impression that they are based in the Egyptian mainland,” according to American officials briefed on the operations.

    a

    It is unclear whether any Israeli troops have actually set foot inside Egyptian borders.

    Despite efforts by both Israel and Egypt to hide the origin of the strikes and censor public reports, Egypt and Israel’s two-year alliance has become somewhat of an open secret in intelligence circles: 

    Inside the American government, the strikes are widely known enough that diplomats and intelligence officials have discussed them in closed briefings with lawmakers on Capitol Hill. Lawmakers in open committee hearings have alluded approvingly to the surprisingly close Egyptian and Israeli cooperation in the North Sinai.

    In a telephone interview, Senator Benjamin L. Cardin of Maryland, the ranking Democrat on the Senate Foreign Relations Committee, declined to discuss specifics of Israel’s military actions in Egypt, but said Israel was not acting “out of goodness to a neighbor.”

    “Israel does not want the bad stuff that is happening in the Egyptian Sinai to get into Israel,” he said, adding that the Egyptian effort to hide Israel’s role from its citizens “is not a new phenomenon.” –NYT

    Moreover, despite Israeli military censors preventing reports of the strikes from becoming public, certain news outlets circumvented the censorship by citing a 2016 Bloomberg report in which a former Israeli official admitted to drone strikes inside of Egypt. 

    The two-year alliance between the two countries is thought to have begun after Egypt’s relatively new president Mohamed Morsi – a leader within the Muslim Brotherhood who came to power after the Arab Spring revolt, was outed in a military takeover by el-Sisi – then defense minister. 

    Israel welcomed the change in government, urging Washington to accept it. 

    And Egypt needed the help; following Mr. Sisi’s takeover, Islamist militants who had established a refuge in the North Sinai region between the Suez Canal and the Israeli border began a wave of deadly assaults against Egyptian security forces. 

    A few weeks after Mr. Sisi took power, in August 2013, two mysterious explosions killed five suspected militants in a district of the North Sinai not far from the Israeli border. The Associated Press reported that unnamed Egyptian officials had said Israeli drones fired missiles that killed the militants, possibly because of Egyptian warnings of a planned cross-border attack on an Israeli airport. (Israel had closed the airport the previous day.)

    At the time, both Israel and Egypt vehemently denied the reports – however after the Russian charter jet was brought down in October of 2015, Israel began its wave of airstrikes, killing a long list of militant leaders according to an American official who spoke on the condition of anonymity in order to discuss classified operations. 

    After Israel wiped out much of the jihadist leadership in the region, less ambitious successors stepped in. No longer employing armed checkpoints, closing roads or claiming territory – the group began targeting “softer” targets like Christians in Sinai and Muslims they considered heretics. As an example, the militant group killed over 300 worshippers at a Sufi Mosque in North Sinai. 

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    Sufi Mosque in North Sinai, 311 worshippers killed by militants in Nov. 2017

    Since Israel has effectively been keeping jihadists at bay in a mutually beneficial arrangement, some American supporters of Israel have been complaining that given Egypt’s reliance on the Israeli military, “Egyptian officials, diplomats and state-controlled news media should stop publicly denouncing the Jewish state.” 

    “You speak with Sisi and he talks about security cooperation with Israel, and you speak with Israelis and they talk about security cooperation with Egypt, but then this duplicitous game continues,” said Representative Eliot L. Engel of New York, the ranking Democrat on the House Foreign Relations Committee. “It is confusing to me.”

    Israel’s prime minister, Benjamin Netanyahu, has also pointedly reminded American diplomats of the Israeli military role in Sinai. In February 2016, for example, Secretary of State John Kerry convened a secret summit in Aqaba, Jordan, with Mr. Sisi, King Abdullah of Jordan and Mr. Netanyahu, according to three American officials involved in the talks or briefed about them.

    Mr. Kerry proposed a regional agreement in which Egypt and Jordan would guarantee Israel’s security as part of a deal for a Palestinian state. –NYT

    Netanyahu scoffed at the idea – arguing that if Egypt was unable to control the ground within its own borders, it was hardly in a position to guarantee Israel’s safety. 

  • The Grand Crowded Trade Of Financial Speculation

    Excerpted from Doug Noland’s Credit Bubble Bulletin,

    Even well into 2017, variations of the “secular stagnation” thesis remained popular within the economics community. Accelerating synchronized global growth notwithstanding, there’s been this enduring notion that economies are burdened by “insufficient aggregate demand.” The “natural rate” (R-Star) has sunk to a historical low. Conviction in the central bank community has held firm – as years have passed – that the only remedy for this backdrop is extraordinarily low rates and aggressive “money” printing. Over-liquefied financial markets have enjoyed quite a prolonged celebration.

    Going back to early CBBs, I’ve found it useful to caricature the analysis into two distinctly separate systems, the “Real Economy Sphere” and the “Financial Sphere.” It’s been my long-held view that financial and monetary policy innovations fueled momentous “Financial Sphere” inflation. This financial Bubble has created increasingly systemic maladjustment and structural impairment within both the Real Economy and Financial Spheres. I believe finance today is fundamentally unstable, though the associated acute fragility remains suppressed so long as securities prices are inflating.

    [ZH: This week’s sudden burst of volatility across all asset-classes highlights this Minskian fragility]

    The mortgage finance Bubble period engendered major U.S. structural economic impairment. This became immediately apparent with the collapse of the Bubble. As was the case with previous burst Bubble episodes, the solution to systemic problems was only cheaper “money” in only great quantities. Moreover, it had become a global phenomenon that demanded a coordinated central bank response.

    Where has all this led us? Global “Financial Sphere” inflation has been nothing short of spectacular. QE has added an astounding $14 TN to central bank balance sheets globally since the crisis. The Chinese banking system has inflated to an almost unbelievable $38 TN, surging from about $6.0 TN back in 2007. In the U.S., the value of total securities-to-GDP now easily exceeds previous Bubble peaks (1999 and 2007). And since 2008, U.S. non-financial debt has inflated from $35 TN to $49 TN. It has been referred to as a “beautiful deleveraging.” It may at this time appear an exquisite monetary inflation, but it’s no deleveraging. We’ll see how long this beauty endures.

    The end result has been way too much “money” slushing around global securities and asset markets – “hot money” of epic proportions. This has led to unprecedented price distortions across asset classes – unparalleled global Bubbles in sovereign debt, corporate Credit, equities and real estate – deeply systemic Bubbles in both (so-called) “risk free” and risk markets. And so long as securities prices are heading higher, it’s all widely perceived as a virtually sublime market environment. Yet this could not be further detached from the reality of a dysfunctional “Financial Sphere” of acutely speculative markets fueling precarious Bubbles – all dependent upon unyielding aggressive monetary stimulus.

    I have posited that aggressive tax cuts at this late stage of the cycle come replete with unappreciated risks. Global central bankers for far too long stuck with reckless stimulus measures. A powerful inflationary/speculative bias has enveloped asset markets globally. Meanwhile, various inflationary manifestations have taken hold in the global economy, largely masked by relatively contained consumer price aggregates. Meanwhile, global financial markets turned euphoric and speculative blow-off dynamics took hold. A confluence of developments has created extraordinary financial, market, economic, political and geopolitical uncertainties – held at bay by history’s greatest Bubble.

    Bloomberg: “U.S. Average Hourly Earnings Rose 2.9% Y/Y, Most Since 2009.” Average hourly earnings gains have been slowly trending higher for the past several years. Wage gains have now attained decent momentum, which creates uncertainty as to how the tax cuts and associated booming markets will impact compensation gains going forward.

    February 2 – Bloomberg (Rich Miller): “As Jerome Powell prepares to take over as chairman of the Federal Reserve on Feb. 5, some of his colleagues are publicly agitating for a radical rethink of the central bank’s playbook for guiding monetary policy. Behind the push for reconsideration of the Fed’s 2% inflation target: a fear of running out of monetary ammunition in the next recession. With interest rates near historically low levels—and likely to remain that way for the foreseeable future—these officials worry the Fed will have little leeway to aid the economy when a downturn inevitably hits. They argue that revamping the inflation objective beforehand could help counteract that. ‘The most important issue on the table right now is that we need to consider the possibility of a new economic normal that forces us to reevaluate our targets,’ Federal Reserve Bank of Philadelphia President Patrick Harker said in a Jan. 5 speech.”

    “Is the Fed’s Inflation Target Kaput?”, was the headline from the above Bloomberg article. There is a contingent in the FOMC that would welcome an inflation overshoot above target, believing this would place the Fed in a better position to confront the next downturn. With yields now surging, these inflation doves could be a growing bond market concern.

    Interestingly, markets were said to have come under pressure Friday on hawkish headlines from neutral/dovish Dallas Fed President Robert Kaplan: “If We Wait to See Actual Inflation, We’ll Be Too Late; We’ll Likely Overshoot Full Employment This Year; We Central Bankers Must Be Very Vigilant; Base Case Is For 3 Rate Hikes in 2018, Could Be More.”

    [ZH: something changed this week]

    Are Kaplan’s comments to be interpreted bullish or bearish for the struggling bond market? Are bonds under pressure because of heightened concerns for future inflation – or is it instead more because of a fear of tighter monetary policy? Confused by the spike in yields back in 1994, the Fed questioned whether the bond market preferred a slow approach with rate hikes or, instead, more aggressive tightening measures that would keep a lid on inflation.

    Just as a carefree Janet Yellen packs her bookcase for the Brookings Institute, the Powell Fed’s job has suddenly morphed from easy to challenging. With tax cut stimulus in the pipeline and signs of a backdrop supportive to higher inflation, a growing contingent within the FOMC may view more aggressive tightening measures as necessary support for an increasingly skittish bond market. At the minimum, the backdrop might have central bankers thinking twice before coming hastily to rescue vulnerable stock markets.

    The marketplace has begun to ponder risk again.

    February 1 – Bloomberg (Sarah Ponczek and Lu Wang): “Coordinated selling in stocks and bonds is making life miserable for investors in one of the most popular asset allocation strategies: those lumped together under the rubric of 60/40 mutual funds. Counter to their owners’ hope, that pain in one will be assuaged by the other, this week has seen both fixed-income and equities tumbling as concern has built about the pace of Federal Reserve interest rate increases. Funds that blend assets have borne the brunt, suffering their worst weekly performance since Feb 2009.

    Stock prices have been going up for a long time – and seemingly straight up for a while now. Bonds, well, they’ve been in a 30-year bull market. Myriad strategies melding stocks and fixed-income have done exceptionally well. And so long as bonds rally when stocks suffer their occasional (mild and temporary) pullbacks, one could cling to the view that diversified stock/bond holdings were a low risk portfolio strategy (even at inflated prices for both). And for some time now, leveraging a portfolio of stocks and bonds has been pure genius. The above Bloomberg story ran Thursday. By Friday’s close, scores of perceived low-risk strategies were probably questioning underlying premises. A day that saw heavy losses in equities, along with losses in Treasuries, corporate Credit and commodities, must have been particularly rough for leveraged “risk parity” strategies.

    It’s worth noting that the U.S. dollar caught a bid in Friday’s “Risk Off” market dynamic. Just when the speculator Crowd was comfortably positioned for dollar weakness (in currencies, commodities and elsewhere), the trade abruptly reverses. It’s my view that heightened currency market volatility and uncertainty had begun to impact the general risk-taking and liquidity backdrop. And this week we see the VIX surge to 17.31, the high since the election.

    The cost of market risk protection just jumped meaningfully. Past spikes in market volatility were rather brief affairs – mere opportunities to sell volatility (derivatives/options) for fun and hefty profit. I believe markets have now entered a period of heightened volatility. To go along with currency market volatility, there’s now significant bond market and policy uncertainty. The premise that Treasuries – and, only to a somewhat lesser extent, corporate Credit – will rally reliably on equity market weakness is now suspect. Indeed, faith that central bankers are right there to backstop the risk markets at the first indication of trouble may even be in some doubt with bond yields rising on inflation concerns. When push comes to shove, central bankers will foremost champion bond markets.

    While attention was fixed on U.S. bond yields and equities, it’s worth noting developments with another 2018 Theme:

    February 2 – Wall Street Journal (Shen Hong): “Chinese stocks had their worst week since 2016, with fresh concerns about Beijing’s campaign to cut financial risk and predictions of a slowing economy helping erase half of the market’s year-to-date gains in just a few days… Mr. Zhang [chief executive of CYAMLAN Investment] said the increasingly frequent market intervention by the ‘national team’ to prop up the major indexes could prove counterproductive. ‘It’s OK to bring in the national team when there’s a huge crisis but if it’s there everyday, it will create even more jitters,’ Mr. Zhang said. ‘If you see policemen everywhere, don’t you feel less safe?’”

    The Shanghai Composite dropped 2.7% this week. Losses would have been headline-making if not for a 2.1% rally off of Friday morning lows.

     

    The Shenzhen Exchange A index sank 6.6% this week, and China’s growth stock ChiNext Index was hit 6.3%. The small cap CSI 500 index fell 5.9%, and that was despite a 2.1% rally off Friday’s lows (attributed to “national team” buying). Financial stress has been quietly gaining momentum in China, with HNA and small bank liquidity issues the most prominent. As global liquidity tightens, I would expect Chinese Credit issues to be added to a suddenly lengthening list of global concerns.

    Unless risk markets can quickly regain upside momentum, I expect “Risk Off” dynamics to gather force. “Risk On” melt-up dynamics were surely fueled by myriad sources of speculative leverage, including derivative strategies (i.e. in-the-money call options). As confirmed this week, euphoric speculative blow-offs are prone to abrupt reversals. Derivative players that were aggressively buying S&P futures to dynamically hedge derivative exposures one day can turn aggressive sellers just a session or two later. And in the event of an unanticipated bout of self-reinforcing de-risking/de-leveraging, it might not take long for the most abundant market liquidity backdrop imaginable to morph into an inhospitable liquidity quandary.

    February 1 – Bloomberg (Sarah Ponczek): “When stocks fall, investors typically pull money out of the market. But when U.S. equities suffered their worst two-day slump since May, some traders didn’t blink an eye. Exchange-traded funds took in $78.5 billion in January, exceeding the previous monthly record by nearly 30%. ETFs saw close to $4 billion a day in inflows even on the stock market’s down days, according to Eric Balchunas, a Bloomberg Intelligence senior ETF analyst…”

    Adding January’s $79 billion ETF inflow to 2017’s record $476 billion puts the 13-month total easily over half a Trillion. If the ETF Complex is hit by significant outflows, it’s not clear who will take the other side of the trade. This is especially the case if the hedge funds move to hedge market risk and reduce net long exposures. And let there be no doubt, the leveraged speculators will be following ETF flows like hawks (“predators”).

     

    And I’m having difficulty clearing some earlier (Bloomberg) interview comments from my mind:

    January 24 – Bloomberg (Nishant Kumar and Erik Schatzker): “Billionaire hedge-fund manager Ray Dalio said that the bond market has slipped into a bear phase and warned that a rise in yields could spark the biggest crisis for fixed-income investors in almost 40 years. ‘A 1% rise in bond yields will produce the largest bear market in bonds that we have seen since 1980 to 1981,’ Bridgewater Associates founder Dalio said… in Davos…”

    Dalio: “’There is a lot of cash on the sidelines’. … We’re going to be inundated with cash, he said. “If you’re holding cash, you’re going to feel pretty stupid.’”

    Here I am, as usual, plugging away late into Friday night. So, who am I to take exception to insight from a billionaire hedge fund genius. But to discuss the possibility of the worst bond bear market since 1981 – and then suggest those holding cash “are going to feel pretty stupid”? Seems to be a disconnect there somewhere. Going forward, I expect stupid cash to outperform scores of brilliant strategies.

    The historic “Financial Sphere” Bubble has ensured that ungodly amounts of “money” and leverage have accumulated in The Grand Crowded Trade of Financial Speculation.

    And as we detailed earlier – it doesn’t get any more crowded that record long equities and record short bonds!

  • Who Let Dr. Strangelove Write The Pentagon's Nuclear Posture Review?

    Authored by Julia Conley via TheAntiMedia.org,

    The Pentagon’s official outline for its use of nuclear force was denounced as “radical” and “extreme” by prominent anti-nuclear weapons groups when it was released Friday afternoon—confirming peace advocates’ worst fears that the Trump administration would seek to expand the use of nuclear force.

    “Who in their right mind thinks we should expand the list of scenarios in which we might launch nuclear weapons?” asked Peace Action in a statement. 

    “Who let Dr. Strangelove write the Nuclear Posture Review?”

     

    The Nuclear Posture Review (NPR) calls for the development of smaller warheads that the military believes would be seen as more “usable” against other nations.

    “In support of a strong and credible nuclear deterrent, the United States must…maintain a nuclear force with a diverse, flexible range of nuclear yield and delivery modes that are ready, capable, and credible,” reads the report, which serves as the first updated document the U.S. has released regarding its perceived nuclear threats since 2010.

    In addition to “diversifying” its nuclear arsenal, the Pentagon notes that it will seek to “expand the range of credible U.S. options for responding to nuclear or non-nuclear strategic attack,” raising concerns that President Donald Trump will argue for the use of nuclear force as a deterrent—a significant departure from previous administrations which saw nuclear weapons as an option only for retaliation.

    “The risk of use for nuclear weapons has always been unacceptably high,” said Beatrice Fihn, executive director of the International Campaign to Abolish Nuclear Weapons (ICAN).

    “The new Trump Nuclear Doctrine is to deliberately increase that risk. It is an all-out attempt to take nuclear weapons out of the silos and onto the battlefield. This policy is a shift from one where the use of nuclear weapons is possible to one where the use of nuclear weapons is likely.”

    Derek Johnson, head of Global Zero, called the NPR “a radical plan written by extreme elements and nuclear ideologues in Trump’s inner circle who believe nuclear weapons are a wonder drug that can solve our national security challenges.”

    “Trump’s insistence that we need more and better weapons is already spurring countries to follow in his footsteps,” he added. “Nuclear arms-racing is a steep and slippery slope; we’d do well to learn the lessons of the former Soviet Union, whose collapse was accelerated by its unsustainable nuclear ambitions.”

    As Paul Craig Roberts summed up so eloquently, the new US nuclear posture is a reckless, irresponsible, and destabilizing departure from the previous attitude toward nuclear weapons. The use of even a small part of the existing arsenal of the United States would be sufficient to destroy life on earth. Yet, the posture review calls for more weapons, speaks of nuclear weapons as “usable,” and justifies their use in First Strikes even against countries that do not have nuclear weapons.

    This is an insane escalation. It tells every country that the US government believes in the first use of nuclear weapons against any and every country. Nuclear powers such as Russia and China must see this to be a massive increase in the threat level from the United States. Those responsible for this document should be committed to insane aslyums, not left in policy positions where they can put it into action.

  • Watch As Drone 'Dive-Bombs' US Passenger Jet Landing In Vegas Airport

    Drone racing is a high-tech sport sweeping across the United States. Millennials are rushing to become the next drone pilot building these fast and agile multi-rotor crafts in their parents’ basements.

    All of these drones are controlled through FPV (First Person View) systems. FPV is a type of flying system where pilots use cameras to fly drones as if they were sitting in the cockpit. Some pilots fly using FPV monitors, whereas others use specialized goggles to give them a more immersive experience.

    According to the Federal Aviation Administration’s (FAA) Michael Huerta said back in March 2017 that more than 777,000 drone registrations have been filed with the agency.

    With that being said, the Federal Aviation Administration has created a list of rules called the Small Unmanned Aircraft Regulations (Part 107), which outlines what not to do while piloting a drone in U.S. airspace.

    Granted, in the latest installment of absolute foolishness, the Federal Aviation Administration is investigating an incident in which someone piloted a racing drone feet from a jetliner on approach to land at McCarran International Airport in Las Vegas.

    Ian Gregor, public affairs for the FAA Western-Pacific Region said, “We became aware of this incident this afternoon and we are investigating.”

    A person who goes by the name, ‘James Jayo Older’ posted the video online to a Facebook group called “1% FPV.” In the post, he said, “Found the SD card.. 1%ers only.” The video shows the racing drone hovering in the flight path and then dive bombing the jetliner in a swoop maneuver.

    By using landmarks in the video, the incident occurred approximately 3.14 miles away from McCarran International Airport, which could be a violation of FAA rules if the operator failed to the call air traffic control tower.

    Nevertheless, dive bombing a jetliner is an unsafe practice, and the operator “could face fines from of up to $1,437 per violation, while businesses that fly unsafely can face fines of up to $32,666 per violation.,” said Las Vegas Now.

    To make matters worse, the operator could also “face federal criminal penalties including fines of up to $250,000 and/or imprisonment for up to three years,” added Las Vegas Now.

    Drone organizations have already condemned the incident.

    “This pilot’s actions not only endangered the flying public but has the potential to discredit an entire sUAS industry,” Drone U said. “It is the opinion of Drone U and its members that the pilot receives swift and just punishment for this example of irresponsible and reckless flight. There is no excuse for this type of criminal behavior.”

    “All drone and model aircraft pilots must stay well clear of manned aircraft. We condemn the type of operation depicted in this video,” said Chad Budreau, director of government affairs for the Academy of Model Aeronautics, in a statement.

    “Anyone who violates aviation regulations or endangers public safety must be held accountable for their actions. We urge the FAA to take strong enforcement action against this drone pilot, and against any future violators,” he added.

  • Korybko: The US Deep State And The Democrats Are The Problem, Not The Solution

    Authored by Andrew Korybko via Oriental Review,

    The latest policy recommendations by the influential Director General of the Russian International Affairs Council (RIAC), one of the most well-respected and listened-to experts in Russia – to say nothing of the entire former Soviet space – is causing quite a stir by waxing nostalgically about the Obama years and even suggesting that Moscow should embrace the American “deep state”.

    Mr. Kortunov’s Case For Russia’s “Deep State”-Democrat Partnership

    Mr. Andrey Kortunov is one of the most brilliant minds in Russia and earned his place as the Director General of the Russian International Affairs Council (RIAC), and his words accordingly carry much weight for the fact that they set the tone for countless other analysts in the country and even an untold number of policymakers who look to him for guidance.

    That’s why it caused quite a stir when he published his latest recommendation earlier this week at the famous Valdai Club titled “Russian Approaches to the United States: Algorithm Change Is Overdue”, in which he waxed nostalgically about the Obama years and even suggested that Moscow should embrace the American “deep state”.

     

    Director of the Russian International Affairs Council Andrey Kortunov

    So as not to put words in his mouth, the relevant passages are republished in their entirety below:

    “First, it is better to avoid demonizing the Deep State, which is perceived by many in Moscow as the center of world evil and the stronghold of the pathological haters of Russia. Of course, most of the State Department or the CIA officials, the Congress staff, experts from the main think tanks are not Vladimir Putin’s fans. But these people, at least, have considerable experience of interaction with Moscow and can hardly be considered stubborn paranoids, exalted conspiracy theorists or genetic Russophobes. Deep State consists of rationally thinking professionals, who are always easier to deal with than romantic amateurs are. With all its shortcomings, it is the Deep State that limits Donald Trump’s most exotic and potentially most dangerous foreign policy oddities.

     Second, it’s time to change the attitude toward the Democratic Party leadership. For some reason (probably because of inertia) the Barack Obama administration is constantly remembered in Russia in the worst possible way, with the two latest presidents constantly juxtaposed. How is Obama bad, and Trump is good? The stubborn facts show otherwise. For example, Obama pursued a consistent policy of rapprochement with Iran, and Trump returned to the most severe pressure on Tehran. Obama followed the international consensus on the status of Jerusalem, and Trump destroyed this consensus. Obama did not resort to direct military action against Bashar Assad, and Trump did not hesitate to give an order to launch missiles against the Syrian Al- Shayrat airbase. Well, who after all created more problems for Russia — Democrats or Republicans?”

    Mr. Kortunov did indeed talk about other aspects of US-Russian relations, including the need for a bottom-up approach to improving his country’s soft power in America, but none of those proposals are controversial, at least not when compared to what he wrote about above.

    A diversity of respectful views in any discourse is symptomatic of a healthy democracy, and Russian society is no different in this respect, which is why the dialogue on this topic would be greatly enriched by presenting some counterpoints to Mr. Kortunov’s article.

    Deciphering The “Deep State”

    The first is that the US’ military, intelligence, and diplomatic bureaucracies (“deep state”) are experienced and rational like Mr. Kortunov describes them as, but that they nevertheless bear primary responsibility for the deterioration in US-Russian relations under both the Obama and Trump Presidencies because the bulk of these professional bureaucrats always retain their jobs between leadership transitions in the country.

    The President is supposed to determine the broad trajectory of their work in consultation with his closest advisors, some of whom are handpicked by him and approved by Congress to lead the relevant institutions of the “deep state” while others are more informal, but the rank-and-file members of the “deep state” are still largely more responsible for the execution of policy in practice than anyone else.

    Unprecedentedly, many of them oppose President Trump’s stated desire to improve relations with Russia and have worked to unconstitutionally offset his plans, and the pressure that they’ve put on him to this end explains why he’s undertaken decisively anti-Russian policies during his first year in office despite his campaign pledge to do the opposite.

    Seeing as how most of these “deep state” individuals naturally remained in the same positions that they had during the Obama Administration and would have probably still retained their jobs under Hillary’s Presidency, it’s inaccurate to attribute the deterioration of Russian-American ties to President Trump personally while overlooking the actions of the “deep state” that he’s still trying to reform to the best of his ability.

    The “deep state” is rational – too rational, it can be argued – because it embraces a Neo-Realist paradigm of International Relations that sometimes correlates with Trump’s own views on certain topics but other times contradicts them like in the case of Russia, and the internal power struggle between Trump and the “deep state” is what’s really to blame for the worsening of bilateral relations, not the “amateur” President’s “romanticism” like Mr. Kortunov insists.

    For these reasons, it can be argued that Mr. Kortunov’s belief that the “deep state” “can hardly be considered stubborn paranoids, exalted conspiracy theorists or genetic Russophobes” isn’t exactly accurate, since it’s indeed full of “stubborn paranoids” under the dual influence of the neoconservatives’ Neo-Realism and the Obama-Clinton worldview of “militant liberalism”.

    That said, the “conspiracy theories” that he references are just a “deep state” infowar distraction to deceive the voting masses while the assertion that such a thing as a “genetic Russophobe” exists wrongly implies that an individual’s political views are irreversibly predetermined by their DNA.

    To flip around Mr. Kortunov’s last comment on the matter, it’s more realistic to assert that “with all his shortcomings, it is Donald Trump that limits the Deep State’s most exotic and potentially most dangerous foreign policy oddities.”

    Debunking The Dreams Of Democrat Rule

    Relatedly, Mr. Kortunov’s views on the “deep state” clearly influence his attitude towards the Democrats and specifically the Obama Administration, which he thinks is unfairly “remembered in Russia in the worst possible way” because “the stubborn facts show otherwise” and apparently disprove the prevailing notion that “Obama (is) bad, and Trump is good.”

    Mr. Kortunov thinks that Obama had pure intentions in signing the nuclear agreement with Iran, though it can cynically be argued that his “deep state” was in fact trying to co-opt the Islamic Republic’s “moderate/reformist” ruling elite in a bid to tip the scales to their favor in the country’s own “deep state” competition for influence with the “conservative/principalist” military-security faction, the failure of which would explain why Trump was tasked with “returning to the most severe pressure on Tehran.”

    The enduring presence of most of the “deep state’s” personnel between presidential administrations doesn’t preclude the US from pivoting between policies but actually allows such moves to be more smoothly executed, as can be seen from the example of Nixon’s rapprochement with China in spite of Johnson’s antagonism towards it; Bush Sr. “betraying” Iraq even though Reagan aligned with it; Obama signing the nuclear deal against the former Bush Jr. Administration’s wishes; and Trump dismantling his predecessor’s plans.

    Although the President might set the tone for the overall direction that each respective policy should go in and this sometimes reverses what the previous administration did, it’s ultimately the “deep state” that puts these ideas into practice and is able to maintain a degree of strategic continuity that advances America’s national interests regardless, though the case of Trump’s vision for US-Russia relations also shows that this same “deep state” can also conspire to obstruct the President’s will.

    Another “stubborn fact” at variance with Mr. Kortunov’s nostalgia for Democrat rule is the practical significance of Obama “following the international consensus on the status of Jerusalem” and Trump “destroying” it since it inaccurately hints that the former was somehow ‘pro-Palestinian’ and that the latter’s announcement tangibly changed something on the ground, neither of which are true because Obama was actually very pro-Israel and Trump’s decision only stands to affect foreign aid recipients who voted against the US and the UN.

    Looking beyond Obama’s highly publicized personal rivalry with Netanyahu and his populist rhetoric on the Palestinian issue, nothing that he did during his two terms had any influence on Israel’s occupation of East Jerusalem and unilateral claim to the entirety of the city being its capital; likewise, Trump’s words didn’t change any of this reality either and only resulted in word games being played at the UN and the Organization of Islamic Cooperation, neither of which did anything other than attempt to comfort the Palestinians.

    As for Mr. Kortunov’s juxtaposition of Obama’s refusal to “resort to direct military action against Bashar Assad” with Trump “not hesitating to give an order to launch missiles against the Syrian Al- Shayrat airbase”, he’s totally overlooking the 44th President’s responsibility for the theater-wide “Arab Spring” Color Revolutions and the resultant Hybrid War of Terror on Syria which dealt incomparably more damage to Syria and its democratically elected President’s standing that Trump’s handful of one-off missiles.

    In addition, Trump only ordered the attack because he was under intense “deep state” pressure to do so after having been caught in a Catch-22 trap where he was forced to “put his money where his mouth is” and respond to the false-flag chemical weapons attack that violated his “red line”, but truthfully speaking, what Mr. Kortunov might really resent is that it only took a few million dollars’ worth of missiles to call President Putin’s bluff in hinting at a military response to the exact same scenario in 2013 that got Obama to back down at the time.

    To respond to Mr.Kortunov’s rhetorical question of “who after all created more problems for Russia — Democrats or Republicans?”, the reader should be reminded that the Obama Administration presided over or was outright responsible for the “Arab Spring” and its attendant regime changes, the War on Syria, the 2011-12 anti-government unrest in Moscow, EuroMaidan and the Ukrainian Civil War, the anti-Russian sanctions, and the fake news scheme of “Kremlin interference” in order to suppress Russia’s publicly funded international media outlets and harass their employees, among many other examples.

    In comparison, Trump merely continued most of the policy trajectories that Obama and his Secretary of State Hillary Clinton first initiated, and even then he’s tried to resist some of the “deep state’s” pressure when it comes to Russia, so as bad as he’s been for Moscow’s interests, one should wonder how much worse Hillary would have been she entered into the Presidency and allowed the “deep state” to do as it pleases.

    Concluding Thoughts

    Mr. Kortunov seems to have wanted to spark a serious conversation about how Russia’s “deep state” should respond to the disappointment that it experienced throughout Trump’s first year in office, and if that was his intention, then he remarkably succeeded by controversially reinterpreting the Obama years as something to apparently be nostalgic about and boldly suggesting that his government reconsider its negative attitude to Trump’s “deep state” foes.

    In the spirit of dialogue that Mr. Kortunov implicitly encouraged by publishing such a provocative piece, it’s only fitting that a rebuttal be presented to challenge his premise that the Democrats and their “deep state” handlers are supposedly more preferable to Russia than Trump is, especially seeing as how he selectively pointed to a few decontextualized examples that were presumably cherry-picked in order to promote his argument.

    With all due respect to this prestigious gentleman, his entire notion is flat-out wrong and shows that he doesn’t at all understand Trump’s “Kraken”-like leadership and his never-ending struggle to survive the “deep state’s” permanent Clintonian Counter-Revolution that’s being waged in trying to undermine the Second American Revolution that the President is trying to carry out in America’s domestic and foreign affairs.

    Instead of ignoring the plethora of evidence proving the Obama Administration’s hostility to Russia and its international interests, Mr. Kortunov should have at least made a superficial reference to it because this glaring omission implies a deliberate partiality towards that political faction and the “deep state” in general, which is fine to have in principle but nevertheless casts doubt on how effective his proposals would be in the overall sense of things if they were ever put into practice.

    Mr. Kortunov is evidently unaware that the same “deep state” that he finds attractive in contrast to Trump had a controlling influence in determining the Obama Administration’s anti-Russian policies that the 44th President’s Secretary of State Hillary Clinton ended up implementing with ruinous consequences for Moscow’s grand strategic interests, and that she would have given the “deep state” free rein to do whatever it wanted had she won unlike Trump’s willingness to challenge its most extreme tendencies (though with mixed results).

    Having said that, pragmatic working relations between Russia and the US’ “deep states” are inevitable because there isn’t any alternative to interacting with any national counterpart’s collection of military, intelligence, and diplomatic figures no matter how much one may disagree with their policies unless ties between the two sides are formally suspended, which isn’t foreseeable but would in any case still allow for the existence of communication backchannels.

    What Mr. Kortunov is lobbying for is something altogether different because he wants Russian decision makers to reconceptualize the American “deep state” as a ‘positive’, ‘moderating’, and ‘responsible’ force against what he characterizes as Trump’s ”romantic”, “amateurish”, “most exotic and potentially most dangerous foreign policy oddities”, which is ironically a very “romantic” and “exotic” view to have of the US’ most dangerous anti-Russian institutional forces.

    In all actuality, however, the “deep state” and its Democrat allies are the real reason why Trump hasn’t been able to succeed in his pledge to improve Russian-American relations, and these two problems shouldn’t ever be confused as part of the solution that’s needed to reverse this downward spiral, nor should a tactical partnership with these two actors ever be considered if Moscow hopes to maintain the upper hand in the New Cold War.

  • Super Bowl Security Has Turned Minneapolis Into A Military Police State

    Authored by Aaron Nelson via TheAntiMedia.org,

    The Department of Homeland Security has designated Super Bowl LII a National Special Security Event (an event deemed a potential target for terrorism or criminal activity) with a SEAR-I classification. The National Guard, federal agencies, and law enforcement from across the country have been patrolling Minneapolis and Saint Paul since January 26th.

    While security around the Super Bowl has been openly militarized every year since the 9/11 attacks, only three have been labeled National Special Security Events, including this year’s. Since 2001, every city except Houston (which had over 5,000 police officers) has called in the National Guard to provide additional security on the streets.

    SEAR-I is an event “of such magnitude and significant national and/or international importance that may require the full support of the United States Government (USG). The scale and scope of these events requires significant coordination among federal, state, and local authorities and warrants pre-deployment of federal assets as well as consultation, technical advice, and support to specific functional areas in which the state and local agencies may lack expertise or key resources.”

    In its 52-year history, there has never been an attack at the site of the Super Bowl, which raises questions about the need for SEAR-I classification.

    More than a dozen streets have been shut down at three major points within downtown Minneapolis: the Minneapolis Convention Center (NFL Super Bowl Experience), Nicollet Mall (Super Bowl LIVE), and the site of the game, U.S. Bank Stadium. These areas are guarded and patrolled by militarized forces.

     

     

    Though the Minneapolis Police Department is the agency in charge of security operations during Super Bowl LII, more than 60 additional police departments from across the state of Minnesota have sent officers. There are also over 400 National Guard members, United States Secret Service, ICE and FBI agents, several hundred security contractors, county Sheriff’s Reserves, and over 10,000 civilian volunteers. Representatives from Minnesota police departments, FBI, DHS, and the Secret Service, have been stationed at multiple command centers around Minneapolis to watch hundreds of surveillance cameras, track social media, and monitor communications on the ground during Super Bowl events.

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    Mobile phone signal boosters, surveillance gear, and other unknown electronics began popping up throughout the Twin Cities in preparation for the Super Bowl. Some of the surveillance technology, as well as the general culture of surveillance, will remain in Minneapolis long after the Super Bowl leaves.

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    Locals have taken note of a twin-engine Bell 412 helicopter flying 300 feet above downtown Minneapolis conducting radiation level tests, as well as other security aircraft, including black hawk helicopters enforcing the no-fly zone around the event, some of which have been flying dark.

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    A contracted helicopter previously observed flying low over water protectors at Standing Rock was also spotted in Minneapolis.

     

    Some are worried that the intense security for large sporting events like the Super Bowl is normalizing the use of military forces and surveillance in the everyday life of Americans. With numerous event attendees stopping to take photos next to military humvees and with Minnesota National Guard, Hennepin County Sheriff’s Deputies, and military police outfitted in camouflage military gear, it isn’t hard to see why people are concerned.

    Here are 11 photos that show how the Super Bowl has turned Minneapolis into a police state:

    Is the presence of military personnel and militarized police at Super Bowl LII keeping Minneapolis safe, or is it simply an excuse for a police state and the installation of citywide surveillance?

    *  *  *

    Independent media is under attack — and we need your help to save it! Click here to become an Anti-Media patron.

  • Watch As Students Hate 'Trump SOTU Quotes'… Until They Find Out They're Obama's

    President Trump delivered his first State of the Union address this week. While the speech was received favorably by 75 percent of those who watched, according to a CBS poll, there were still those who disapproved.

    Campus Reform’s Cabot Phillips went to John Jay College in NYC to talk to students who disapproved of the speech by asking them to react to a few select quotations.

    Almost unanimously, the students found each of the quotes to be “warmongering”, “aggressive,” and “immature.”

    What the students didn’t know was that all the quotes given to them were taken from President Obama’s State of the Union addresses.

    How would they react when they found out it was President Obama, not Trump, who had spoken each of the quotes they disapproved of?

    However, if there is any silver-lining from this disgusting display of cognitive dissonance, it is one of the students’ honest reflection that:

    “While I’m actually not a huge fan of him… but i think being closed-minded is more dangerous than anything he could do…”

    Now if only the media could see things that way…

  • Deutsche Bank: "Here Is The Bad News"… And How To Trade It

    In the aftermath of last week’s market rout, it now appears that risk-parity is about to become a household word within financial circles, for obvious reasons discussed already on several prior occasions.

    Confirming this sentiment, is a note published late on Sunday London time (yes, there is a distinct urgency here) by Deutsche Bank’s chief macro strategist, Alan Ruskin, focusing precisely on the threat of a sharp Risk Parity unwind, and what it means for FX.

    As Ruskin writes in “Risk Parity, FX & the end of financial repression” two or more consecutive weeks of higher US bond yields and lower equity prices, have become progressively less common since the 1980s/1990s, and especially since the 2008 financial crisis. “Three weeks of equities down, 10y yields up, has not happened for more than a decade.” This is shown in the charts below.

    Which brings us to what Ruskin calls “The bad news”, namely that “the markets may be contending with a shift in two big macro factors that point to a change in the post-2008 world: i) reduced financial repression, and, ii) some inflation creep.”

    Some more details:

    Bond and equity prices falling sharply on the week may feel like an unusual environment, because in the last decade, it has become unusual. However, especially as we go back to the 1980s and 1990s it was a more frequent occurrence to see the following causal chain develop: Equities go up, supporting growth with a lag, pushing bond yields up, to the point where higher bond yields eventually pull equities down. In this way the equity – bond causality and correlation shifts, from a positive correlation where equities drive up yields, to a negative correlation as bond yields take the causal lead in pushing equities down.

    From a macro perspective what is intriguing about this dynamic is two old school factors could be back in play: i) At least in the US there is a confluence of inflationary factors – lagged demand, tight labor markets, the tax reforms impact on wages/bonuses and growth, higher oil prices, latent protectionism, and the weak USD. All these factors are apt to have a cumulative effect, chipping away at global disinflation and inflation inertia. ii) the Fed and other Central Bank’s balance sheet adjustments, may signal the end of financial repression, and this repression likely helped risk parity trades.

    Risky assets are understandably worried because these are indeed important changes.

    How does risk-parity get involved? Well, as Ruskin noted, consecutive week after week of both bond and equity price declines is unusual, and very painful for risk-parity funds. This is likely to prove true in current circumstances, where the US bond market is such a stand-out relative to other G10 bond markets.

    Still, according to the DB strategist, risk parity – and the broader market will likely be spared a broader rout, as 10y TSY yields will likely not easily soar much above 3% without finding some real support, most obviously near the 3.03% January 2014 yield peak.

    Ruskin then makes a very good observation: “were bond yields to keep on going higher, it would do enough damage to stocks to start hurting growth expectations, in turn supporting bonds. Bond bears would in this way create the source of their own demise, which is not an unusual self correcting mechanism.”

    In that sense we do not want to exaggerate the prospect of weeks like we have gone through that threaten risk parity trades consistently. At the same time, if inflation pressures and quantitative tightening are not about to change, then the weeks where both equities and bonds sell-off will become a good deal more frequent than we have seen since the Great Financial crisis.

    This, again, is a way of summarizing the “bad news.”

    * * *

    So what does this all mean for currencies, and how should one trade said bad news?

    The table below shows how currencies have traded under different bond (10y yield) and equity (S&P) scenarios.

    Here Deutsche first demarcate each week as falling into one of 4 scenarios: S&P up, 10y yield up; S&P up 10y yield down; S&P down and 10y yield down, and S&P down, 10y yields down. We then looked at how currencies traded,  taking medians and averages of the weekly performances for ach scenario.

    According to Ruskin, the table below shows the following:

    • The percent of time when S&P is down and 10y yields are up is roughly 1 in 6 trading weeks, so not all that unusual, but certainly less common than the other scenarios.
    • In the environment where 10y yields go up and equities go down, the USD tends to go up sharply versus the AUD at least in the past decade. The USD also goes up substantially versus the JPY. The USD is mixed to near flat versus the EUR (or before the EUR the DEM). This leaves the USD up moderately on a Trade weighted basis. Since 1999, the USD also appreciates (somewhat less than we might expect) versus EM carry – using the Bloomberg EM-8 carry index of cumulative total returns. The USD’s positive response versus EM looks much more substantial when using average weekly gains as distinct from median weekly gains. This suggests that every now and then there are some very large negative EM moves, when US bond prices and stock prices go down, which is not a huge surprise.

    To summarize the “worst case” trade, one which sees stocks tumbling and yields continuing to surge, “history supports the thesis that when it feels like there is nowhere to hide between poor simultaneous trading conditions in the equity and fixed income markets, the USD and more recently the EUR have been the currencies to shelter in”, Rusking concludes. .

    “With bond and equity prices tumbling in the last week, the FX markets price action conformed remarkably closely to  how the USD and other currencies have traded in tough risk parity environments of the past 30 years.”

    Of course, with a gigantic $10 trillion global synthetic dollar short – according to the BIS  – one which has so far avoided a squeeze thanks to the record surge in risk assets, it is hardly rocket surgery then if the carpet is pulled from under the market, it is the US Dollar that will surge; after all that is precisely what has happened during every previous crisis.

    The real question is what happens if stocks and bond tumble, and the dollar does not go up. That would be the real crisis, and one which would explain not only the record recent cryptocurrency bid, but also confirm the fact that the dollar’s day as the world’s primary reserve are numbered.

     

  • North Korea Used Berlin Embassy To Smuggle Nuclear Tech, German Spy Chief Claims

    North Korea obtained ballistic missile equipment and technology using its embassy in Berlin, says the head of Germany’s domestic intelligence agency, Hans-Georg Maassen in an interview with public broadcaster NDR. 

    “We determined that procurement activities were taking place there, from our perspective with an eye on the missile program, as well as the nuclear program to some extent” -Hans-Georg Maassen

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    Hans-Georg Maassen

    On Saturday, NDR released portions of the Maassen interview – with the full program airing Monday.

    a
    North Korea embassy, Berlin

    Maassen did not divulge the exact technology and equipment North Korea procured through the Berlin embassy, aside from that they were so-called “dual-use” goods that can be used for military oir civilian purposes – making it difficult in some cases to identify technology to be used in the ballistic missile program.

    We found out that there were procurement activities from there, from our point of view with regard to the rocket program, and partly also to the nuclear program,” Massen told NDR. “If we find such things, we prevent it. But we cannot guarantee that this can be detected and prevented by us in all cases.”

    Pyongyang also used a variety of other methods to procure the parts, which “were acquired via other markets, or that shadow firms had acquired them in Germany,” before reaching North Korea, says Maassen. 

    The BfV obtained information on North Korea’s procurements in 2016 and 2017, according to an investigation by NDR. These items were allegedly used for the country’s missile program.

    In 2014, a North Korean diplomat reportedly tried to obtain a “multi-gas monitor” that is used in the development of chemical weapons. –DW

    According to NDR, a longtime UN investigator has raised complaints that the trade embargo against North Korea is a joke, and has “more loopholes than stuffed holes,” (translated). The NDR report comes on the heels of a UN report that north Korea has been ignoring sanctions – having earned $200 million from banned exports in 2017. 

    Meanwhile – as we reported in January the Chinese military has been amassing assets near their shared border with North Korea around the Tumen River in Yanji city, Jilin province. 

    One source told the Daily NK, “there were so many soldiers in the car that there was a lot of traffic. I have not seen so many soldiers trucking to Yanji so far.”

    Another source said, “Chinese troops are gathering around the Yalu and Tumen rivers. It is also heard that the tanks are moving to the North and the Chinese border.”

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    And according to the Daily Star: Chinese military officials have recently conducted the so-called “war ceremony” – urging their troops to be ready to fight.

    If the media report is accurate, it would suggest that China – fearing the worst – is preparing for war on the Korean Peninsula. Previously, internal documents leaked from China’s main state-owned telecommunications company shows three villages and cities in the northeastern border province of Jilin, have been designated for refugee camps-if war breaks out. China is afraid a swarm of refugees from North Korea could cross the Tumen River into China.

    In early January, Kim Jong Un warned that North Korea would soon begin mass producing nuclear weapons – urging South Korea to join it for a much-needed dialogue ahead of the Winter Olympics in Pyeongchang, South Korea. 

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Today’s News 4th February 2018

  • Paul Craig Roberts Rages At Washington's Nuclear Posture Review

    Authored by Paul Craig Roberts,

    The World Will Not Survive the American Neoconservatives’ Doctrine of US World Hegemony

    The government of the United States is clearly in demonic hands. We are overflowing with proof. Take Friday (2-2-18) for example.

    A report from the House Intelligence Committee was released that is proof that the Federal Bureau of Investigation, the Department of Justice (sic), and the Democratic National Committee are engaged in a conspiracy against American democracy and the President of the United States with the full support of the presstitute media.

    As if that is not enough, also released today is the Pentagon’s new Nuclear Posture Review. A nuclear posture review specifies a country’s attitude toward nuclear weapons and their use. In past posture reviews, nuclear weapons were regarded as unusable except in retaliation for a nuclear attack. The assumption was that no one would use them. There was always the possibility that false warnings of incoming ICBMs would result in the nuclear button being pushed, thus setting off Armageddon. There were many false warnings during the Cold War. President Ronald Reagan was very concerned about a false warning resulting in mass death and destruction. This is why his principal goal was to end the Cold War, which he succeeded in doing. It did not take successor governments long to resurrect the Cold War.

    The new US nuclear posture is a reckless, irresponsible, and destabilizing departure from the previous attitude toward nuclear weapons. The use of even a small part of the existing arsenal of the United States would be sufficient to destroy life on earth. Yet, the posture review calls for more weapons, speaks of nuclear weapons as “usable,” and justifies their use in First Strikes even against countries that do not have nuclear weapons.

    This is an insane escalation. It tells every country that the US government believes in the first use of nuclear weapons against any and every country. Nuclear powers such as Russia and China must see this to be a massive increase in the threat level from the United States. Those responsible for this document should be committed to insane aslyums, not left in policy positions where they can put it into action.

    President Trump is being blamed for the aggressive US nuclear posture announced today. However, the document is a neoconservative product. Trump, perhaps, could have prevented the document’s release, but under pressure as he is by the accusation that he conspired with Putin to steal the US presidential election from Hillary, Trump cannot afford to antagonize the neoconized Pentagon.

    The neoconservatives are a small group of conspirators. Most are Zionists allied with Israel. Some are dual-citizens. They created an ideology of American world hegemony, specifying that the chief goal of US foreign policy is to prevent the rise of any other power that could serve as a constraint on US unilateralism. As neoconservatives control US foreign policy, this explains US hostility toward Russia and China and also the neoconservatives’ use of the US military to remove governments in the Middle East regarded by Israel as obstacles to Israeli expansion. For two decades the US has been fighting wars for Israel in the Middle East.

    This fact proves the power and influence of the insane neoconservatives. It is certain that people as insane as the neoconservatives would launch a nuclear attack on Russia and China. The Russian and Chinese governments seem to be completely unaware of the threat that the neoconservatives pose to them. I have never experienced in my interviews with Russians and Chinese any awareness of the neoconservative ideology. Possibly, it is too insane for them to grasp.

    Ideologues such as the neoconservatives are not fact-based. They are chasing their dream of world hegemony. Russia and China are in the way of this hegemony. Having learned the limits of US conventional military power—after 16 years the US “superpower” has been unable to defeat a few thousand lightly armed Taliban in Afghanistan—the neoconservatives know that conventional invasions of Russia or China would lead to the total defeat of US forces. Therefore, the neoconservatives have elevated nuclear weapons to a First Strike, usable, arsenal that in the neoconservative dream of world hegemony can be used to destroy Russia and China.

    Ideologues who divorce themselves from the facts create a virtual world for themselves. Their belief in their ideology blinds them to the risks for themselves and others that they impose on the world.

    It is clear enough that without the utterly corrupt Obama Department of Justice (sic) and FBI, the utterly corrupt Clinton-controlled Democratic National Committee, and the utterly corrupt American and European presstitute media working to destroy Trump’s presidency by framing him up as “a Russian agent,” President Trump, understanding that the Pentagon’s posture review would worsen, not normalize, relations with Russia, would have deep-sixed the demonic document that threatens all life on earth.

    Thanks to the American liberal/progressive/left, the entirely of the world is faced with a far more likely nuclear demise than ever threatened us during the Cold War with the Soviet Union.

     

    By its collaboration with the military/security complex and the corrupt Hillary DNC, the liberal/progressive/left has forever discredited itself. It is now seen by every thinking person worldwide as an insane propaganda ministry for the neoconservatives’ plan to use nuclear weapons to eliminate constraints on US unilateralism. The liberal/progressive/left has endorsed “hegemony or death.”

    They will get death. For all of us.

  • Super Bowl LII: Most Rooting For The Eagles

    The Eagles and the Patriots will be going head to head tomorrow to compete for Super Bowl LII.

    Historically, the Patriots have pedigree, with five wins in total.

    The Eagles, very much playing up to their underdog tag, are looking to win their first, having been beaten in 1981 and 2005 – the latter a narrow loss at the hands of the Patriots.

    The American public seems to be rooting for them, too.

    Infographic: Super Bowl LII: Most Rooting for the Eagles | Statista

    You will find more infographics at Statista

    As Statista’s Martin Armstrong points out, in total, 45 percent of Morning Consult survey respondents said that they’d like to see the Eagles triumph, to the 26 percent backing the Patriots.

    When Super Bowl LII is kicked off on Sunday, February 4, more than a hundred million Americans will be watching.

    Can Tom Brady carry his Patriots to yet another victory or will the Philadelphia Eagles finally get their hands on the Vince Lombardi Trophy?

    As the following infographic nicely illustrates, it is not only the biggest game of the year, but also a, albeit unofficial, national holiday.

    Infographic: Super Bowl LII | Statista

    You will find more infographics at Statista

  • Match.com Dating Site Is Reporting Fake Active-User Numbers

    Yesterday, we highlighted a story that pulled back the curtain on the shady world of media sites paying for traffic – a practice that countless social-media influencers and AdSense scammers have employed for years to help monetize their respective platforms.

    As it turns out, IBT Media, the publisher of Newsweek and the International Business Times, reportedly schemed to buy fraudulent traffic in order to help secure a major ad contract from a US government agency. A group that investigates fraudulent web traffic initially published the findings, which comport with a story from Buzzfeed news about IBT India.

     

    Match

     

    Now, Thinknum, a FinTech company that analyzes web traffic, has published a report on its blog alleging that SpeedDate.com, one of the 45 web properties owned by Match.com, misleads users by publishing fake engagement data on its homepage.

     

    Random

     

    When the company’s analysts tried to verify the high level of activity (after all, the site regular advertises more than 2,500 singles “online now” – a huge number in many parts of the US) they discovered something disturbing in the website’s header files: A random number generator (highlighted in purple in the image above).

    So we looked deeper – why wasn’t SpeedDate.com registering on our active users counts? Perhaps it’s because they don’t use Facebook login like their other properties, making it difficult for us to track activity? Perhaps it’s because they’re under the radar?

    Or perhaps it’s because they lie?

    When our engineers took a deeper look at SpeedDate.com to figure out how we could track activity – after all, 3,297 Singles Online Now is a lot, and we should be tracking this rising star of digital dating – we found something curious in their header files.

    A random-number generator.

    What’s perhaps even more galling is how the site is “monetized” – instead of relying solely on advertising traffic, real human users must pay for the service.

    You may think this isn’t a big deal, but in an environment in which dating sites are exceedingly difficult to navigate, difficult to use, and sketchy on details, a company as big at Match shouldn’t be commiting a sin as fundamental as making up its usage numbers.

    Perhaps SpeedDate.com is just a placeholder for something bigger. Maybe it’s a relic that Match is no longer feeding. That said, it still entices hapless singles to sign up, give out personal data, and get matched up with users that either don’t exist, or haven’t been using the site in years.

    Oh – and to “verify your profile” you need to enter credit card information and get billed $0.99. After all, there are thousands of singles waiting to meet you, right?

    Right?

    To be sure, the author of the Thinknum post said the company isn’t sure what’s up with Speeddate.com these days, or if they’re even still active as a business. In 2008, they came under fire for some Facebook login shenanigans that got them banned from the social network. Regardless, their site is active – and they’re accepting signups.

     

  • The FISA Memo, Obama, And The Election that Almost Wasn't

    Authored by Tom Luongo,

    “Round up the usual suspects,” will be as far as the Democrats will be willing to go in the wake of the FISA memo’s release. There is nothing in that memo that anyone following the Special Counsel Robert Mueller’s investigation doesn’t already know.

    All the memo does is corroborate the bread crumbs left behind by a drip feed of leaks, counter-leaks and good ol’ fashioned investigative journalism.  Since the memo is based on actual evidence that the FBI admits is real but will not allow us to see, the memo itself can be taken as fact.

    The FBI has the evidence.  They’ve showed it to the House Intelligence Committee.  Both agree on the facts.  So, by extension, the memo is all the evidence we need.

    Put that in your DNC-scripted talking point pipe and blow it out your ass.

     

    Conclusions Matter

    Now that the timeline and paper trail have been determined the real implications of the memo and its facts can be discussed.  I’m no longer interested in the game of cut and thrust to stop the truth from coming out.

    I’m only interested now in the conclusions we can draw from the memo itself.

    And those conclusions are chilling.

    The out-going Obama administration, at the highest levels in coordination with the media, conspired to create news stories that supported a FISA warrant based on politically-motivated opposition research to undermine the newly-elected President of the United States.

    Moreover, it knowingly omitted material facts to the court not once, but four times, to keep that surveillance warrant open in service of this operation.  A warrant the FBI deputy director, Andrew McCabe, testified under oath to Congress that was key to its issuance.

    They knew the dossier on Trump, compiled by Michael Steele, was unverifiable. They hid its origin and motivation from the court.  The information from this warrant and the details of the dossier were used to move public opinion and Congress into supporting Robert Mueller’s investigation.

    But, to what end?

    To disgrace and force from office the President of the United States.  Thus, these people, and the leadership of the Democratic Party, President Obama himself and Hillary Clinton’s staff all conspired to criminally disenfranchise more than 60 million Americans who voted for Donald Trump.

    To say that this is bigger than Watergate is like calling World War II a minor kerfuffle.

    What About the Voters!?

    Think about this for one second and you know what I’m saying.

    All of these people are guilty, at a minimum of corruption, conspiracy and fraud.  I’m no legal scholar, so I’m sure the list of offenses is longer than one of Hillary Clinton’s tirades after someone criticized her latest pantsuit atrocity.

    This ultimately opens all of these organizations up to the biggest civil rights class action lawsuit in the history of this country.  The Obama administration and the Democratic Party used opposition research to paint a false narrative of corruption in the Oval Office to discredit the election.

    How many riots and street demonstrations did we see in 2017 as outraged and triggered liberals ran around smashing in windows and beating people up because of their delusion based on a lie?

    How many hours of lost productivity did the country suffer because of FBI complicity in an operation to overturn a legal election?

    How many millions in property damage?  Destroyed careers?

    What about the direct victims of this disgusting display of government corruption taken to its logical conclusion?

    Why is Michael Flynn nearly bankrupt after being hounded by Mueller for months only to get a nothing guilty plea on the thinnest of procedural offenses?

    When the corruption is this venal isn’t it our right under the Constitution to petition our government for a redress of grievances?  Who do we sue?

    Because there’s material harm here and someone should be held responsible.  This began under Obama’s watch.  He set this whole process in motion.  High ranking members of his cabinet are directly implicated by the facts in the memo.

    And the memo is just the beginning of the discovery phase of this very public trial.

    Government on Trial

    But, I want more than that.  I want it all out in the open. And I want those responsible, those for whom the titles, salaries, benefits and power we bestow on them to do our work, to stand up and be accountable.

    And if they are too venal, feckless and narcissistic to admit these things, then we’ll drag them through the most embarrassing of show trials.

    And that means stripping them of their wealth, power and privilege.

    It means turning off their house organs in the media; outing the enablers, leakers, trolls and spooks.

    It means releasing everything, unredacted, in the name of national security.

    It means reminding them of just how much all of that depends on our consent, not theirs.

    Because if we don’t demand these things, then next time there won’t even be the pretense of an election.

  • Uma Thurman Says Her Assault By Weinstein Was Like "A Bat To The Head"

    After months of telling inquiring reporters that she would share her “Weinstein story” when she felt ready Uma Thurman – one of the actresses most closely associated with the Weinstein brothers’ Miramax film production studio – has finally opened up to the New York Times about her history of rape and abuse at the hands of Harvey Weinstein.

    Thurman explains she waited for two reasons: She was worried she “might cry” because of the intensely emotional subject matter, and she also felt guilty for being both a victim and an enabler of Weinstein’s predation. The two worked on a series of immensely popular films together, beginning with the 1994 blockbuster “Pulp Fiction”. Weinstein even introduced her to former President Barack Obama at a fundraiser he hosted for the former president at his house

     

    Weinstein

    After more than two decades in the film industry, Thurman is worried that her behavior inadvertently set a precedent that other women followed – willingly and naively walking into the web of a predator.

    “The complicated feeling I have about Harvey is how bad I fell about all the women that were attacked after I was,” she told me one recent night, looking anguished in her elegant apartment in River House on Manhattan’s East Side, as she vaped tobacco, sipped white wine and fed empty pizza boxes into the fireplace.

    “I  am one of the reasons that a young girl would walk into his room alone, the way I did. Quentin used Harvey as the executive producer of “Kill Bill”, a movie that symbolizes female empowerment. And all these lambs walked into slaughter because they were convinced nobody rises to such a position who would do something illegal to you, but they do.”

    Thurman, like fellow Weinstein victim Rose McGowan, accused her former agency, Creative Artists Agency, of abetting Weinstein’s predatory behavior.

    The agency has issued a pubic apology. And Thurman says she feels conflicted about her status as being both a victim and a part of the system that turned a blind eye to this culture of victimization.

    Like McGowan, Thurman’s history of being assaulted by powerful men in Hollywood began when she was a teenager and just starting her career.

    One night when she was 16, Thurman went out in Manhattan and met an actor nearly 20 years her senior. The two went back to his Greenwich Village brownstone for a nightcap.

    “I was ultimately compliant,” she remembers. “I tried to say no, I cried, I did everything I could do. He told me the door was locked but I never ran over and tried to grab the knob. When I got hoe I remember I stood in front of the mirror and I looked at my hands and I was so mad at them for not being bloody or bruised. Something like that tunes the dial one way or another, right? You become more compliant or less compliant, and I think I became less compliant.”

    Turning to the subject of Weinstein, Thurman explained how he and his first wife, Eve, befriended her in the aftermath of “Pulp Fiction” – the movie that launched Thurman to stardom.

    In a story that by now has become familiar to anybody following the #MeToo movement, Thurman explained how Weinstein groomed her, spending hours discussing film and her career.

    Then, one day, they were arguing over a script in a Paris hotel room, when – as Thurman tells it – Weinstein’s infamous bathroom came out.

    “I didn’t feel threatened,” she recalls. “I thought he was being super idiosyncratic, like this was your kooky, eccentric uncle.”

    Her first attack occurred later at the Savoy Hotel in London.

    “It was such a bat to the head. He pushed me down. He tried to shove himself on me. He tried to expose himself. He did all kinds of unpleasant things. But he didn’t actually put his back into it and force me. You’re like an animal wriggling away, like a lizard. I was doing anything I could to get the train back on the track. My track. Not his track.”

    The next day, she received a bouquet of flowers from Weinstein with a note that read “you have good instincts.” Thurman says she was repulsed.

    After that, Thurman soured on Weinstein, but reluctantly continued their working relationship, seeking to minimize her contact with him. Eventually, her repulsion to Weinstein impact her relationship with director Quentin Tarantino. After twice being told about Thurman’s assault, Tarantino confronted Weinstein, who eventually offered Thurman what she described as a “half-assed apology.”

    But Tarantino’s increasingly demanding requests of Thurman during the shooting of “Kill Bill” eventually led Thurman to sour on the director. Following a near-fatal accident on the set of “Kill Bill”, Thurman says her resentment finally boiled over and she began to despise Tarantino, who in turn began to resent her.

    Weinstein is back in Arizona for rehab. He has reportedly been spotted around Los Angeles following the dozens of accusations, and it’s believed that at least one of the many law enforcement agencies that are investigating him for potential sexual assault charges will soon move forward with an arrest.

     

     

  • Video Captures Cruise Missile Strike On Militants That Shot Down Russian Fighter Jet In Syria

    The Russian Ministry of Defense has released footage showing a precision strike against terrorists in the northwest Syria province of Idlib, following the downing of an Su-25 jet. The pilot, Roman Nikolaevich Filippov safely ejected – only to be killed by militants on the ground, according to the Ministry. 

    Earlier, Ebaa Agency released a video of the moment the Russian Su-25SM was shot down by MANPADS over Saraqib, in Idlib. According to Ebaa, the AlQaeda affiliated Hay’at Tahrir al-Sham (HTS) backed by Qatar, was responsible. The MANPADS was probably an FN-6 delivered through Turkey, the agency speculated.

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    Russia promptly responded: The aerial night-vision footage shows a barrage of cruise missiles hitting ground targets, which are believed to have killed around 30 terrorists. 

    More footage reveals a heavy cluster bomb attack on the village of Maasaran, near the site of the downed Su-25:

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    As we reported earlier, the Su-25 warplane was the first Russian fighter jet downed above Syria since 2015. A Russian defense ministry official confirmed the plane was shot down, stating “The plane was flying around the de-escalation zone of Idlib.”

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    The extremist group Tahrir al-Sham has claimed responsibility for the downing of the Ruissian Su-25, according to Reuters – while another militant group, Jaysh al-Nasr, took credit as well – posting pictures and videos celebrating the downed aircraft to its twitter account. 

    The group posted a video with an unknown date containing footage of a 23mm Anti-Aircraft gun ostensibly used to shoot down the Russian jet. 

  • How Do You Hide Stolen Cryptocurrency?

    The anonymous nature of digital wallets continues to stymie investigators in last week’s theft of 58 billion yen ($530 million) worth of NEM cryptocurrency from a Tokyo exchange, the biggest cryptocurrency heist in history.

    Authorities know which user accounts were affected by the Jan. 26 hacking, and the accounts holding the pilfered funds can be immediately identified because the virtual coins are traceable. And, as the Nikkei writes, if the Coincheck exchange case were a regular bank robbery, identifying the bank accounts holding the stolen money would let law enforcement easily return the funds to victims.

    But individuals who open a bank account must identify themselves, and no such requirement exists for opening a digital wallet. Anyone can obtain an anonymous digital wallet as easily as walking into a store and paying cash for an actual wallet.

    That helps explain why Coincheck and the NEM Foundation, the international organization that manages and promotes the currency, are having trouble identifying the owners of the wallets and demanding the restoration of funds.

    The foundation, which tags the NEM coins, could rewrite the blockchain virtual ledgers and forcibly return the stolen funds to Coincheck. But the NEM group has pledged never to rewrite blockchain records, so even those “transactions” resulting from a hack will remain valid.

    The Tokyo Metropolitan Police Department had received communication logs maintained by Coincheck as of Thursday. The logs are being analyzed for any violation of Japanese anti-hacking laws, but the investigation is expected to encounter challenges similar to those in past cybercrime cases.

    In 2015, servers belonging to the state-run Japan Pension Service sustained a cyberattack in which computer viruses were used to obtain names, identification numbers and other data belonging to some 1.25 million people. The next year, travel agency JTB suffered a data breach affecting 6.79 million customers. In both cases, the hackers may have infiltrated systems via offshore servers, but no suspects have been named to date.

    When Mt. Gox went bankrupt in February 2014 after a massive amount of cryptocurrency went missing from its exchange, it took about a year and a half for authorities to arrest CEO Mark Karpeles, who was suspected of falsifying account data. Investigators went as far as crunching data in servers located in the U.S.

    Meanwhile, on Saturday, the infamous Coincheck exchange said it was preparing to announce a timeframe when yen withdrawals can begin. All yen deposits registered to customer accounts are being stored in a customer-specific account in a major financial institution, the exchange said adding that cryptocurrencies registered to customer accounts have been transferred out of hot wallets and are being stored in cold wallets, etc. And Google translated in its entirety:

    As we are announcing at the release on January 30, 2018, we are currently undergoing verification and verification of technical safety etc. accompanying Japanese yen withdrawal, and we are preparing for resumption We are. Based on the confirmation / verification that we are doing with the cooperation of outside experts, we will inform you of the timing of resumption of Japanese yen withdrawal.

    The Japanese yen held by the customer in the account is preserved in the customer exclusive account of the financial institution. Also, with respect to the virtual currency (BTC / ETH / ETC / LSK / FCT / XMR / REP / XRP / ZEC / LTC / DASH / BCH) which the customer has in the account, evacuate from the hot wallet, We keep it.

    We are sorry for the inconvenience for a while, thank you for your consideration.

    Meanwhile, someone is half a billion richer following the Coincheck theft, and nobody has any clue who it is.

  • Nunes: FISA Memo Just "Phase One," Now Targeting State Department In "Phase Two"

    Devin Nunes (R-CA) said that the investigation leading up to the four-page FISA memo released on Friday was only “phase one,” and that the House Intelligence Committee is currently in the middle of investigating the State Department over their involvement in surveillance abuses. 

    “We are in the middle of what I call phase two of our investigation, which involves other departments, specifically the State Department and some of the involvement that they had in this,” said Nunes. 

    “That investigation is ongoing and we continue work towards finding answers and asking the right questions to try to get to the bottom of what exactly the State Department was up to in terms of this Russia investigation.”

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


    Glenn Simpson, Christopher Steele

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

    The [soccer] episode burnished Steele’s reputation inside the U.S. intelligence community and the FBI. Here was a pro, a well-connected Brit, who understood Russian espionage and its subterranean tricks. Steele was regarded as credible. Between 2014 and 2016, Steele authored more than a hundred reports on Russia and Ukraine. These were written for a private client but shared widely within the State Department and sent up to Secretary of State John Kerry and to Assistant Secretary of State Victoria Nuland, who was in charge of the U.S. response to the Ukraine crisis. Many of Steele’s secret sources were the same sources who would supply information on Trump. One former State Department envoy during the Obama administration said he read dozens of Steele’s reports on Russia. The envoy said that on Russia, Steele was “as good as the CIA or anyone.” Steele’s professional reputation inside U.S. agencies would prove important the next time he discovered alarming material, and lit the fuse again.

    Aside from the infamous 35-page “Trump-Russia” dossier Steele assembled for opposition research firm Fusion GPS (a report which was funded in part by Hillary Clinton and the DNC), Congressional investigators have been looking into whether Steele compiled other reports about Trump – and in particular, whether those other reports made their way to the State Department, according to The Examiner

    they are looking into whether those reports made their way to the State Department. They’re also seeking to learn what individual State Department officials did in relation to Steele, and whether there were any contacts between the State Department and the FBI or Justice Department concerning the anti-Trump material.

    It will be interesting to see how the State Department – and in particular Secretary of State Rex Tillerson – responds to “phase two.”


    Secretary of State Rex Tillerson

    Watch the entire Nunes interview here: 

  • The 1% Gets A Scare – More To Come?

    Authored by John Rubino via DollarCollapse.com,

    Most Americans have spent the last few years pressed up against the proverbial bakery window, watching the 1% enjoy a life of ever-increasing wealth and seemingly total indifference to the multitudes who aren’t favored by zero interest rates, big trust funds and political/corporate connections.

    The one consolation for the have-nots has been that, by owning few stocks and bonds, they would suffer less when those bubble markets did what bubbles always do, which is burst.

    Friday was a small but satisfying taste of that eventuality.

    From Bloomberg:

    World’s Richest People Lose $68.5 Billion in Stock Selloff

    The fortunes of the world’s 500-richest people dropped by $73.9 billion Friday as equity markets swooned with investor worries about the pace of interest rate hikes in the U.S. Warren Buffett led the declines, shedding $3.3 billion to end the day at No. 3 on the Bloomberg Billionaire Index with $90.1 billion.

    The chart shows about $100 billion of play money evaporating in the past week. Not enough to seriously inconvenience most of the people on Bloomberg’s billionaires list, but still a nice reversal of fortune versus the average person with a house, small bank account and not much more – who didn’t lose a thing.

    As for whether Friday was just a blip in an ongoing “secular bull market” or a sign that fundamentals are at last gaining the upper hand on “liquidity,” that remains to be seen. Longer-term though, there can’t be much doubt that today’s stock and bond valuations are higher than they’ll be during the next downturn.

    Here’s a chart from John Hussman’s latest (Measuring the Bubble) that illustrates the point.

     

    The adjusted price/earnings ratio on US stocks is now higher than before both the Great Depression and the dot-com bust.

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