Today’s News 5th November 2017

  • Washington Stomps On Civil Liberty

    Authored by Paul Craig Roberts,

    The insouciant American electorate is so inattentive that it routinely elects enemies of civil liberty to represent the public in Congress. Last Wednesday Rep. Adam Schiff (D, CA), Rep. Trey Gowdy ( R, SC), Sen. Dianne Feinstein (D, CA), Sen. Mark Warner (D, VA), Rep. Jackie Speier (D, CA), Sen. Tom Cotton (R , AR ), and Rep. Joaquin Castro (D, TX) tried to intimidate executives from Facebook, Twitter, and Google into blocking all digital dissent to the anti-Trump/Russian line taken by the DNC and military/secrurity complex and to serve as spy agencies for the CIA.

    Two of the above – Gowdy and Cotton – are Republicans who have aligned themselves with the attack on Russia and Republican President Trump. What unites the members of the two parties is that they want a police state. Jackie Speier demands to know from Google why Google hasn’t “shut down RT on YouTube.” Joaquin Castro wants messages linked to Russia turned over to the US government. Trey Gowdy wants false statements blocked, which would mean that the entire print and TV media in the US would be shut down along with Congress, John Brennan, Robert Mueller, and James Comey. Gowdy does not know that the First Amendment guarantees free speech and leaves it up to the public to decide what is true and what is false.

    You tell me.

    What kind of insouciant people are capable of electing representatives who do not respect the Bill of Rights?

    Is a country whose government does not respect its own Constitution a democracy? Is such a country an exceptional, indispensable country?

    Or is it a completely corrupt entity whose government no longer has the slightest allegience to the Bill of Rights and the US Constitution?

    What is the quality of an electorate that sends those with a police state mentality to represent them in the government that has power over them?

    Are we witnessing the destruction of democracy by the electorate?

    Is the failure of the American people staring us in the face?

    Are you amazed that it is the executives of Facebook, Twitter, and Google, and not the members of Congress who have sworn to uphold the Constitution of the United States, who point out to US Representatives and Senators that their demands for censorship and spying are unconstitutional?

    What is the liberal/progressive/left, which believes that good resides in government and evil in the private sector, to make of this?

    Is the hatred of dissent so great that nothing else is important?

    Here is a report on Wednesday’s hearings by the House and Senate Intelligence (sic) committees on “extremist” views (via Global Research's Andre Damon)…

    Lawmakers Demand Tech Companies Censor Journalists and Conduct Mass Surveillance

    Wednesday’s hearings by the House and Senate Intelligence committees on “extremist” political views served as the occasion for members of Congress to urge technology companies to flagrantly violate the US Constitution by censoring political speech, carrying out mass surveillance, and muzzling journalists in pursuit of the government’s geopolitical aims.

    The hearings revolved around allegations, promoted ceaselessly in recent months by the intelligence agencies, leading figures within the Democratic Party, and newspapers such as the New York Times, that social opposition to the political establishment results from “fake news” promoted by Russia.

    As Democratic Congressman Adam Schiff put it, “Russia” promoted “discord in the US by inflaming passions on a range of divisive issues” and sought to “mobilize real Americans to sign online petitions and join rallies and protests.”

    The basic problem, however, as Schiff put it, is “not just foreign.” The algorithms used by Facebook and Twitter have the “consequence of widening divisions among our society.” Schiff complained:

    “What ends up percolating to the top of our feeds tends to be things we were looking for,” as opposed to US government propaganda disseminated by the establishment media, which he referred to as “true information.”

    Congressman Adam Schiff

    In line with Schiff’s assessment, members of Congress who participated in the hearings spent the bulk of their time demanding that the companies censor such “fake” news, which they equated with the writings of exiled journalist Julian Assange and other political dissidents.

    It is a testament to the decay of American democracy that it was left to the representatives of Facebook and Twitter, who have been broadly accused of violating users’ privacy for their own financial gain, to inform members of Congress about the ABC of constitutional law.

    In an exchange that embodied the total contempt for freedom of speech that pervades the ruling elite, South Carolina Representative Trey Gowdy demanded that Facebook and Twitter block their users from making inaccurate statements about the current day of the week.

    “Can I ‘say today is Thursday’,” the South Carolinian demanded. “What are you going to do with that?” Gowdy asked which constitutional amendment protects the right of people to make such statements, totally oblivious that almost all false statements are protected under the First Amendment.

    Colin Stretch, Facebook’s general counsel, fighting back a skeptical smile, replied:

    “There is Supreme Court precedent on that…”

    Facebook General Counsel Colin Stretch

    Gowdy, befuddled, demanded: “On which side?” Stretch answered:

    “That it is, in most cases, protected.” He continued: “On Facebook, our job is not to decide whether content is true or false.”

    Although the representatives of the technology companies largely played along with the narrative of “Russian meddling” in American politics, their resistance to the most flagrant censorship demanded by the government piqued the ire of the senators leading the witch-hunt.

    “I don’t think you get it,” fumed Senator Dianne Feinstein, who said the past year had seen “a cataclysmic change” in American politics. This is “the beginning of cyber warfare,” she declared, and technology companies “have to really take a look at that and what role you play.”

    Senator Mark Warner, for his part, complained that his accusations had been “frankly blown off by the leaderships of your companies and dismissed.”

    Earlier this month, Google removed Russia Today (RT), a Russian-sponsored TV station and online news outlet that reports stories largely censored by the mainstream press, from its list of “preferred” channels on YouTube. Feinstein took issue with Google’s statement that it revoked RT’s status as a preferred channel for non-political reasons, and demanded to know why Google had not acted against RT earlier.

    Google’s general counsel Kent Walker replied:

    “We have carefully reviewed the content of RT to see that it complies with the policies that we have against hate speech, violence, etc. So far, we have not found violations.”

    California Democratic representative Jackie Speier asserted that RT “seeks to influence politics and fuel discontent in the United States.” She asked:

    “Why have you not shut down RT on YouTube? … It’s a propaganda machine, Mr. Walker, the intelligence community says it’s an arm of one of our adversaries.”

    The clashes continued. Senator Tom Cotton demanded to know why Twitter refused to turn its platform over to the CIA in order to conduct mass surveillance. He asked:

    “Do you see an equivalency between the Central Intelligence Agency and the Russian intelligence services?”

    Sean Edgett, Twitter’s general counsel, replied:

    “We’re not offering our service for surveillance to any government.”

    Cotton likewise demanded that Twitter censor WikiLeaks’ editor Assange.

    “The current director of the CIA, Mike Pompeo, as well as this committee, has labeled WikiLeaks a non-state hostile intelligence service who aids hostile foreign powers like the Kremlin,” he said. “Yet, to my knowledge, Twitter still allows him to operate uninhibited.”

    Receiving a reply from Twitter general counsel Edgett that the company applies its policies “without bias,” Cotton retorted:

    “Is it biased to side with America over our adversaries?”

    In yet another incitement for technology companies to violate the Constitution, this time the Fourth Amendment, which prohibits unreasonable searches and seizures, Texas Democratic Congressman Joaquin Castro asked:

    “Are you also intending to turn over to the committee any kind of direct messages” on accounts suspected of being linked to Russia?

    When Edgett pushed back that this would be possible only through legal channels, Castro responded:

    “Certainly you’re not making the argument that a Russian account, a fakely created account, has some protection of privacy here.”

    Edgett replied:

    “Some users may end up being fake. Others will be real.”

    The most surprising element of the hearings, however, was the extent to which Walker, Google’s general counsel, sought to separate Google’s search tools from the social networks operated by Facebook and Twitter when it comes to “fake news.”

    In reference to a question regarding fake news, Walker interjected:

    “I think there’s a distinction between say Google search, whose goal is to provide accurate, relevant, comprehensive information and social network concerns,” such as those related to Twitter and Facebook. “We think the heart and soul of the products is to try to provide useful and, to the extent we can, accurate information to users.”

    This was in addition to his prepared testimony, where he noted:

    “At Google News, we use fact check labels to spot fake news. At Google search, we have updated our quality guidelines and evaluations to help surface more authoritative content from the web.”

    Based on the stated goal of fighting “fake news,” Google has implemented sweeping changes to its search algorithm that has led search traffic to 13 leading left-wing, progressive and anti-war sites to plunge 55 percent. Search traffic from Google to the World Socialist Web Site has fallen by 74 percent, and the site has been blocked from Google News.

    Wednesday’s testimony makes clear the political motives behind Google’s actions. Rather than seeking, as it publicly claims, to provide “true” and “authentic” content, Google is acting as the proxy of the US government and its agencies to muzzle its critics and political opponents.

  • Donna Brazile Says Clinton Campaign Officials Made Her Feel Like "Patsey The Slave"

    The Democratic Party's nominal support for "identity politics" has once again been exposed as little more than hollow virtue-signaling…

    By now, it’s become clear that the Democratic party establishment installed Donna Brazile has the head of the DNC expecting her to be an obedient stooge who would turn a blind eye to the endemic corruption and mismanagement inside America’s oldest major political party. Unfortunately for them, Brazile had no intention of keeping quiet when she discovered that Obama’s negligence had left the party in debt, effectively allowing the Clinton to play a deciding role in doling out resources, setting strategy and myriad other issues.

    A year after Trump’s upset victory over Clinton poleaxed the Washington establishment and smug Democratic elitists who felt it was their candidate’s god-given right to effortlessly slide into office despite being one of the most unpopular major-party candidates in recent memory, Brazile is speaking out in a new book, excerpts from which have been published in Politico and the Washington Post.

    In one detail printed today by WaPo, Brazile recounts how Clinton’s top aides repeatedly disrespected and demeaned her, which she equated to being treated like a slave.

    Brazile alleges that Clinton’s top aides routinely disrespected her and put the DNC on a “starvation diet,” depriving it of funding for voter turnout operations.

     

    As one of her party’s most prominent black strategists, Brazile also recounts fiery disagreements with Clinton’s staffers — including a conference call in which she told three senior campaign officials, Charlie Baker, Marlon

     

    Marshall and Dennis Cheng, that she was being treated like a slave.

     

    “I’m not Patsey the slave,” Brazile recalls telling them, a reference to the character played by Lupita Nyong’o in the film, “12 Years a Slave.” “Y’all keep whipping me and whipping me and you never give me any money or any way to do my damn job. I am not going to be your whipping girl!”

    Over the past two days, Brazile has revealed how former DNC Chairwoman Debbie Wasserman Schultz effectively ceded control of the party to the Clinton campaign, which looted funds from state party organizations and restricted the money flowing into the DNC after agreeing to pay off most of its debt.

    She also revealed that she considered replacing Clinton with Joe Biden after she collapsed during a ceremony at the 9/11 memorial. But most shockingly of all, she said that she feared for her life after the murder of DNC staffer Seth Rich, which she feared may have been planned by nefarious elements from within the party.

  • Is The U.S. Navy Being Truthful With Its Report On Recent Crash Incidents?

    Authored by Duance Norman via Free Market Shooter blog,

    Recently, Free Market Shooter (as well as the US Navy) questioned the cause of a string of crashes involving Navy destroyers and cruisers… all occurring this year:

    Recently, the US military, unable to come up with a cause for the incidents, began investigating something else – “compromised computer systems”:

     

    The military is examining whether compromised computer systems were responsible for one of two U.S. Navy destroyer collisions with merchant vessels that occurred in recent months, Vice Admiral Jan Tighe, the deputy chief of naval operations for information warfare, said on Thursday.

     

    Naval investigators are scrambling to determine the causes of the mishaps, including whether hackers infiltrated the computer systems of the USS John S. McCain ahead of the collision on Aug. 21, Tighe said during an appearance at the Center for Strategic and International Studies in Washington.

     

    The presumption that has been made is that these vessels are being hacked, China is the responsible party, given the proximity of the vessel crashes to the nation, as well as recent incidents where the US and China have butted heads.  But it is worth asking; are these vessels being hacked?  More importantly, if they are being hacked, who is hacking the vessels, and why?

    However, this author did not discount other possible causes for the incidents, including complacent Navy sailors…

    It is also worth noting that US Navy vessels do not broadcast an AIS signal (which can be seen on www.marinetraffic.com) with their respective position, like nearly all other vessels, due to obvious security/defense reasons. You almost never hear news of large commercial ships crashing into each other, which is due not just to AIS, but due to the fact that they actively try to broadcast their position by other means, such as running lights.

     

    Which brings in the possibility of simple human error from US Navy operators as being the cause of these crashes.  Could it be that simple complacency and/or lack of proper training has resulted in these incidents? Given the professionalism of our military, that seems unlikely, but it wouldn’t be the first (and almost certainly won’t be the last) time it has happened.

    …a theme which was commonly brought up in responses to this article after it was posted on The Burning Platform:

    • Here’s a more likely scenario – its driven and manned by a bunch of incompetent sailors, who very well may have gotten there through some kind of affirmative action nonsense, or social promotion, where pople get qualifications on things they aren’t competent enough to handle because no CO wants to get accused of racism or sexism for failing a black/women/whatever person on the oral board for underway watches. I’ve never been in the Navy, but I’ve seen it, many times. People given way more responsiblity that they are competent to handle, and you just sit back and wait for them to do something stupid, while hoping no one gets hurt. Also, they are probably spending more time doing mandated training on SJW type nonsense than learning how to sail their boat.
    • Never attribute something to highly complex malice when it can easily be contributed to stupidity and/or incompetence. Thats how Occam would slice it.
    • A complete breakdown in seafaring culture, from top to bottom. The lookouts either failed or had their reports ignored. The radarmen failed to kep track. The bridge lookouts failed, the officer of the deck failed, and the C/O failed by not ensuring that he had competent people at every position. His C/O failed because he knew that the ship captain was incapable of taut management, and likely knew that many of the junior officers and petty officers were untrained and incompetent.
    • A complete failure of culture. God help them if they become hard targets in a shooting engagement.
    • I’ve worked on vessels in the oil field my whole life and have seen the decline in discipline and accountability. With so many wireless devices it’s almost impossible to keep people focused on their task. If they would disconnect the internet from these vessels and keel hull a few of the captains most of the problem would go away.
    • Hacking, GPS spoofing, etc are all things that should be investigated. However IMO they are unlikely. What seems more likely to me is there is a breakdown of operational discipline.
    • However this was brought on is open for much debate. A large factor that I think contributes, is the shift away from the military from being an instrument of death to our enemies to a global force for good and social engineering experiments.

    And in the case of the USS Fitzgerald and USS John S. McCain, the Navy has ruled that incompetence was indeed the cause of the incidents:

    The collision between Fitzgerald and Crystal was avoidable and resulted from an accumulation of smaller errors over time, ultimately resulting in a lack of adherence to sound navigational practices. Specifically, Fitzgerald’s watch teams disregarded established norms of basic contact management and, more importantly, leadership failed to adhere to well-established protocols put in place to prevent collisions. In addition, the ship’s triad was absent during an evolution where their experience, guidance and example would have greatly benefited the ship.

     

    The collision between John S. McCain and Alnic MC was also avoidable and resulted primarily from complacency, over-confidence and lack of procedural compliance. A major contributing factor to the collision was sub-standard level of knowledge regarding the operation of the ship control console. In particular, McCain’s commanding officer disregarded recommendations from his executive officer, navigator and senior watch officer to set sea and anchor watch teams in a timely fashion to ensure the safe and effective operation of the ship. With regard to procedures, no one on the Bridge watch team, to include the commanding officer and executive officer, were properly trained on how to correctly operate the ship control console during a steering casualty.

    Is the Navy being truthful in its assessment of these incidents?  More than likely, yes.  But it should be acknowledged that the Navy could be “covering up” another cause of the incident, which could be anything from the aforementioned hacking, to problems with the Navy’s Aegis system, as was previously stated on Free Market Shooter:

    A far more likely scenario is that there is a problem with the Aegis system and/or other navigation systems on US naval vessels. The US Navy, known to cover up all sorts of problems in the past, would have every reason to mask the true reason behind these collisions if they are tied to a defective weapons system. Notably, the unreliable nature of the US ground-based interceptor program under questionable test conditions has led many to believe that the system is just another failed defense project sucking up billions of taxpayer dollars.  It is not far-fetched to believe that one of our deployed systems is operating with a serious defect that has been swept under the rug by the DoD.

    It is also worth acknowledging that if hacking indeed was to blame, the Navy would not acknowledge it publicly.  If hacking was the culprit, the Navy would not want the enemy to know that it had isolated the issue and corrected it, allowing the enemy to go along in the belief that they could continue to compromise Navy vessels.

    However, in the cases of all of these US Navy crashes, the simplest explanation is likely the correct one, and the simplest explanation is the one that the Navy provided – a complete breakdown in seafaring culture.  Still, it has to be acknowledged that the Navy could be covering for a far larger problem. 

  • Commuters & Computers: Mapping America's Megaregions

    From California’s Bay Area to the highly-integrated Great Lakes Economy, megaregions are a dominating aspect of human geography and commerce. It should be no surprise then, that 85% of corporate head offices in the US and Canada are overwhelmingly concentrated in the core cities of great megaregions.

    We tend to think of cities as individual economic units, but as they expand outward and bleed together, defining them simply by official jurisdictions and borders becomes difficult. After all, as Visual Capitalist's Nick Routley notes, many of the imaginary lines divvying up the country are remnants of decisions from centuries ago – and other county and state lines exist for more counterintuitive reasons such as gerrymandering.

    What if there was a more data-driven approach to examine America’s urban networks?

    Courtesy of: Visual Capitalist

    COMPUTER, TAKE THE WHEEL

    By ignoring borders and looking purely at commuter data, geographer Garrett Nelson and urban analyst Alasdair Rae looked to map the relationship between population centers in their paper, An Economic Geography of the United States: From Commutes to Mega-regions.

    Researchers used visual and algorithmic approaches to build their map.

    The study used network partitioning software to link together 4 million commutes between census tracts. This gives us a very granular look at the “gravitational pull” of America’s population centers, and helps us better understand the economic links that bind a region together.

    By combining visual and mathematical approaches, and some creative place-naming, the researchers created a map that they hope reflects America’s true economic geography.

    ALGORITHMIC INSIGHTS

    The concept of megaregions is hardly new, and there are already definitions for global megacities that use everything from infrastructure systems to light patterns derived from satellite imagery.

    That said, this research is fine example of using data and an algorithmic approach to look at systems in a new way, unburdened by our political and cultural preconceptions.

    *  *  *

    Interested in more infographics on human geography? There’s just a couple of days left to make the Visual Capitalist book a reality on Kickstarter.

  • "All We Want Is Respect" – NYC's Strippers Are Going On Strike

    Wealthy Wall Street finance types are going to need to find a new way to entertain their wealthy asset-management clients – at least for the time being – because the strippers are going on strike.

    The source of the dispute is a simmering dispute between New York City dancers and a growing cohort of Instagram-famous “startenders” who wear outfits that are almost as revealing as the strippers' outfits, but also promote the club on social media – bringing in a loyal following of customers – while also serving drinks.

    The club owners, not wanting to lose the revenue that the bartenders are bringing in, have stood idly by while the bartenders' influence inside the clubs has grown, while the strippers, who typically pay clubs a house fee to dance, are seeing their nightly earnings dwindle.

    The result? One stripper who spoke to the post said she used to make $1,000 a night. But now she’s pulling in closer to $400.

    “No dancer in New York City is making $1,000 a night anymore."

    Of course, the strike is still in its early stages. But according to the Washington Post, it’s quickly gaining support.

    Panama is a stage name and she declined to provide her real name. She is for real, though, said Mona Marie, the owner of a New York dance studio where many dancers train called Poletic Justice. And, she says, so are their mounting grievances, so much so that some of them have declared a stripper’s strike. It’s unclear how many dancers are participating and what the impact on the clubs has been. The strike is about a week old.

     

    This isn’t your normal labor dispute between employees and employers. It’s between bartenders and strippers, on the one hand, and between strippers and club promoters on the other, who tend to side with the bartenders because, after all, it’s the bartenders who they believe are bringing in the customers via social media.

    As it turns out, the advent of photo-sharing apps like Instagram and Snapchat has violently disrupted the business of being an exotic dancer. To compensate for the drop in their nightly take at NYC clubs, the dancers now travel more because they can earn more money at clubs down South, or clubs in smaller towns where girls from fresh faces can earn more money.

    Because of the club owners’ indifference, many of the best dancers to skip NYC altogether, one stripper said.

    A dancer named Gizelle Marie is one of the strike organizers. “The [New York City] bartenders tell the customers not to tip us. They block us from the customers while we dance or they are sweeping our money off the stage while we dance,” she told The Post. Several videos taken from inside different clubs posted on Instagram appear to support her claim.

     

    Gizelle Marie says most customers can’t tell bartenders apart from strippers anymore because they all basically dress the same and “the club promoters and owners encourage the behavior."

     

    Gizelle Marie got the idea to mobilize the NYC Strippers Strike after she traveled to Washington last month to dance at a club during Howard University’s homecoming.

     

    “I made a lot of money. It made me think to myself that a lot of the great dancers aren’t dancing in New York anymore. They moved away to other cities to work or they just completely stopped,” Gizelle said.

     

    Within a couple days, she posted the word on Instagram and 30 strippers gathered last week at Poletic Justice in the Bronx for a meeting.

     

    Panama said, “The dancers used to be the most respected in the club, and now it’s like the dancers are at the bottom of the barrel. And the dark-skinned dancers are all the way at the bottom of the barrel."

    Among other considerations, the striking strippers are demanding a reduction in house fees and that black dancers also have the opportunity to be hired as bartenders.

    In the past, the dancers have mostly been silent about their issues out of fear, she said. “People were in fear of losing their jobs if they spoke out. A lot of these women have other careers, are parents, are putting themselves through school so that fear factor absolutely played a part in it."

     

    They want their house fees reduced. They want bartenders to pay house fees, too. The black dancers want the opportunity to be hired as bartenders. And they want the bartenders to stop stealing their money.

     

    They wish as well that management would stop pitting the strippers and bartenders against each other. The dancers believe everyone can work together harmoniously if rules are established.

     

    “All we want is respect at the end of the day,” Gizelle Marie said. “If it doesn’t change by us going to the owners we’ll take further matters legally."

    However, the nascent strike is facing one major obstacle: Club promoters’ reaction to the strike ranges from  indifferent to downright hostile.

    Club promoters are not sympathetic to the strippers’ demands. Sean Simmons, promotional director for Aces New York, said the strike is “nonsense.” He said there is no racism in the nightclubs and that he employed “all ethnicities” as dancers and bartenders at his club before it was shut down a couple months ago.

     

    “The whole industry itself has changed,” Simmons told The Post in a brief phone interview. “Some clubs are bartender-driven, but that’s just because the bartenders are beautiful women.” Simmons said that there should be rules and regulations between dancers and bartenders, but said, “Nothing will come from the strike."

    Still, the women plan to keep fighting.

    “No matter how people perceive your work environment, a work environment is a work environment and everybody needs to be respected and treated equally. If there’s something you can do to help or change your establishment, you should do it.”

  • The 'War On Terror' Has Cost American Taxpayers $250 Million A Day For 16 Years

    Authored by Darius Shahtahmasebi via TheAntiMedia.org,

    The U.S. government has spent a staggering $1.46 trillion on wars abroad since September 11, 2001, according to the Department of Defense’s (DoD) periodical “Cost of War” report. As International Business Times reports, this amounts to $250 million a day for 16 years consecutively.

    The newly released version, published by the Federation of American Scientists’ Secrecy News blog, spans war-related activity from the September 11th terrorist attacks through mid-2017.

    According to the report, despite the fact that the war on terror is still ongoing rapidly to this day, Operation Iraqi Freedom (2003-2011) and Operation Enduring Freedom (2001-2014) account for the vast majority of the cost, amounting to more than $1.3 trillion collectively.

    It must be noted that this analysis only covers direct war-related expenses and is certainly on the lower side of such estimates of the cost of American wars to date. For example, in 2014, a report from Congress’ nonpartisan research arm found that the government had already shelled out over $1.6 trillion for the war on terror. That estimate would amount to approximately $337 million per day every single day for that 13-year period.

    Last year, a report released by Dr. Neta Crawford, professor of political science at Brown University, found that spending by the United States Departments of Defense, State, Homeland Security, and Veteran Affairs since 9/11 was even higher, reaching almost $5 trillion.

    That being said, the DoD’s recent report mainly covers the costs of military operational costs, support for deployed troops, and transportation of personnel and equipment. It does not include the expense of veterans’ benefits for troops who served in these wars. The cost of veterans’ benefits alone is projected to be somewhere between $600 billion and $1 trillion. The total also notably does not include “non-DoD classified programs” such as those conducted by the Central Intelligence Agency, which, as we know, has a significant budget of its own.

    Further, war zones where the U.S. military has been actively engaged in recent years, such as Libya and Somalia, did not even receive specific mentions in the report. If $250 million a day for a 16-year period already sounds far too much to be spending on death and destruction, one can be assured that the true financial cost of the war on terror is, in reality, much higher.

    As International Business Times explained, the war on terror has become America’s costliest war since World War II:

    “According to the Congressional Research Service, the only war in U.S. history to cost more than the Global War on Terror is World War II, at more than $4.1 trillion in present dollars. Direct war-related expenses from the Vietnam War cost $738 billion in today’s dollars.”

    As StockBoardAsset.com reports, glancing at the American empire, there are nearly 800 military bases in more than 70 countries and territories abroad. 

    To maintain this global force,  the US Senate approved a $700 billion military bill this year. The amount eclipses $549 billion military spending cap established by 2011 Budget Control Act. More evidence fund flows are increasing, as the narrative is being set with America’s next enemy in the crosshairs.

  • In Shocking Purge, Saudi King Arrests Billionaire Prince Bin Talal, Dozens Of Others In Cabinet Crackdown

    In a shocking development, Saudi press Al Mayadeen reported late on Saturday that prominent billionaire, member of the royal Saudi family, and one of the biggest shareholders of Citi, News Corp. and Twitter – not to mention frequent CNBC guest – Al-Waleed bin Talal, along with ten senior princes, and some 38 ministers, has been arrested for corruption and money laundering charges on orders from the new anti-corruption committee headed by Crown Prince Mohammed bin Salman, while Royal princes’ private planes have been grounded.

    Among those fired and/or arrested are the head of National Royal Guards, Miteb Bin Abdullah, the Minister of Economy and Planning, Adel Fakeih, and Admiral Abdullah bin Sultan bin Mohammed Al-Sultan, the Commander of the Saudi Naval Forces.

    As the local press further adds, the supreme committee chaired by Crown Prince and billionaire stops “on charges of money laundering.”

    al-Waleed bin Talal is perhaps best known not only for his periodic CNBC appearances, but for his recurring on and off spats with president Trump:

    According to al Arabiya, among those sacked and/or arrested are Moteib Bin Abdullah, Minister of the National Guard, and Prince Khalid bin Ayyaf has been appointed as his replacement. A second Royal Order was issued to relieve Minister of Economy and Planning, Adel al-Faqieh, from his duties, and the appointment of Mohammed Al Tuwaijri as Minister of Economy and Planning.

    According to a Royal Decree issued by King Salman on Saturday the anti-corruption committee is chaired by the Crown Prince with the membership of: Chairman of the Monitoring and Investigation Commission, Chairman of the National Anti-Corruption Authority, Chief of the General Audit Bureau, Attorney General and Head of State Security.

    As Saudi analysts were quick to point out, the purge by the Saudi King means that King Abdallah’s last remnants (Riyad firmer gov. & head of Nat. Guard); media moguls; SAGIA & financial policy officials have been purged.

    As Bloomberg notes, changing the head of the National Guard, an institution that’s been controlled by the clan of the late King Abdullah, “is not like changing the minister of oil,” said Kamran Bokhari, a senior analyst with Geopolitical Futures and a senior fellow with the Center for Global Policy. “I wouldn’t be surprised if this leads to greater fissures within the royal family.”

    Arabiya adds that King Salman also issued sacking and replacement orders for Admiral Abdullah bin Sultan bin Mohammed Al-Sultan, the Commander of the Naval Forces, is to be terminated and be retired; his replacement is Vice Admiral Fahd bin Abdullah Al-Ghifaili, to be promoted to the rank of admiral and be appointed as Commander of the Naval Forces.

    Additionally, Minister of Economy and Planning Adel al-Faqieh was replaced by Mohammed al-Tuwaijri, SPA said, quoting a royal decree. Commander of the Saudi Navy, Abdullah al-Sultan, was replaced with Fahad al-Ghafli. The king also replaced Minister of Economy and Planning Adel Fakeih withMohammad Al Tuwaijri, his deputy.

    Al Tuwaijri, formerly vice minister for economy and planning, had already played a key role in shaping Saudi economic and fiscal policy over the past year. Before joining the government in May 2016 he was Middle East chief executive for HSBC. He’s served as a frequent spokesman for the government’s economic reform plan on TV and with Western journalists.

    King Salman also issued an decree forming an anti-corruption committee headed by the crown prince. Its powers include the ability to trace funds and assets, and prevent their transfer or liquidation on behalf of individuals or entities, along with the right to take any precautionary actions until cases are referred to relevant investigatory or judiciary authorities, according to a government statement.

    The committee’s formation was deemed necessary “due to the propensity of some people for abuse, putting their personal interest above public interest, and stealing public funds,” the Royal Order said.

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    Some more cynical observers noted how MBS is quickly learning from XIi Jinping “how to get rid of enemies under justification of “corruption commission” & place “friendlies” in high places.”

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    Others arrested include Walid bin Talal; Khaled Tuweijri; AlWalid Ibrahim; Turki Bin Naser; and others.

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    Putting the arrests in context, the heads of the main three Saudi owned TV networks were arrested, Alwalid Bin Talal (Rotana), Walid Al Brahim (MBC), Saleh Kamel (ART)

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    As Bloomberg adds, Saudi King Salman appointed a former HSBC banker to head the country’s economy ministry and removed one of the royal family’s most prominent princes from as head of the National Guard. Separately, a number of Saudi princes and former ministers were arrested by authorities hours after the announcement of a new anti-corruption committee, with sweeping powers and headed by Crown Prince Mohammed bin Salman, the Saudi-owned Al Arabiya news service reported.

    Prince Miteb, son of the late King Abdullah, was replaced as minister of the National Guard by Prince Khaled Ayyaf, according to a royal decree carried by state-run media late Saturday. Before his ouster, Prince Miteb was one of the few remaining senior princes to have survived a series of cabinet reshuffles that promoted allies of the crown prince, who is the king’s son and heir to the throne.

     

    King Salman has sidelined other senior members of the royal family to prevent any opposition to the crown prince. Prince Mohammed, 32, replaced his elder cousin, Muhammed bin Nayef, as crown prince in June, a maneuver that removed any doubt of how succession plans will unfold following the reign of King Salman, now 81.

    While details remain scarce about this “Saturday of the long Saudi knives” – which some have suggested may be a countercoup attempt –  DPA confirms the Al Arabiya report that three senior state officials were sacked.

    Salman relieved Prince Moteib bin Abdullah of his post as minister of the National Guard, replacing him with Khaled bin Ayaf, the official Saudi news agency SPA reported. Additionally, Minister of Economy and Planning Adel al-Faqieh was replaced by Mohammed al-Tuwaijri, SPA said, quoting a royal decree. Commander of the Saudi Navy, Abdullah al-Sultan, was replaced with Fahad al-Ghafli.

    No official explanation was given for the sackings.

     

    In recent months, the Saudi monarch has carried out a string of reshuffles appointing young people in senior state posts. In June, Salman ousted his nephew as the crown prince and appointed his son Mohammed to become the first in line to succeed him. The monarch on Saturday ordered the creation of an anti-corruption committee led by the crown prince amid a rumoured crackdown on suspected tainted officials and royals. Mohammed, 31, is seen as the driving force behind opening up the ultra-conservative country to the outside world and weaning its economy off oil.

    Furthermore, there is speculation that all private flights and VIP departures out of Saudi Arabia have been suspended temporarily, similar to what happened following the last “gentle coup” in June when Prince Mohammed (MBS), 32, replaced his elder cousin, Muhammed bin Nayef, as crown prince in June, a maneuver that removed any doubt of how succession plans will unfold following the reign of King Salman, now 81.

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    According to the AngryArab blog, the removal of Prince Miteb bin Abdullah as head of the National Guard, means that “this is the first time that the National Guard is not in the hand of Abdullah or his son.

    That put all apparatus of the military-intelligence network in the hands of Muhammad bin Salman.  News that Al-Walid bin Talal has been arrested and accused of money laundering.  This could be a service to Trump, who hates Al-Walid: the two fought it out on twitter during the campaign although Al-Walid tried to reconcile with Trump after his election but to no avail. 

    Bin Talal’s arrest and the government reshuffle caps off a bizarre day for Saudi newsflow, which started with the resignation of Palestinian prime minister Saad al-Hariri, who announced he was quitting due to fears of an assassination plot, allegedly organized by Iran, followed shortly after by the Saudi defense forces intercepting a ballistic missile as it was about to strike the capital Riyadh.

    To summarise today’s even more bizarre Saudi news day:

    • Trump urges Aramco IPO
    • Lebanon PM resigns
    • Saudis intercept missile
    • Major cabinet reshuffle; 3 Saudi princes – who run the anti-graft committee – arrested for money-laundering
    • A total of 11 princes, >30 ministers arrested on corruption

    This is a developing story.

  • Donna Brazile Says She "Feared For Her Life" After Seth Rich Was Killed

    Perhaps the most shocking revelation contained in the excerpts from former DNC Chairwoman Donna Brazile’s book was, unsurprisingly, buried in a Washington Post overview of the various allegations (and frankly, we’re surprised the Post, given its status as a protector of the Washington establishment, deigned to publish it).

    In the aftermath of Wikileaks’ decision to publish a cache of emails stolen from the DNC’s servers, Donna Brazile says she became increasingly paranoid about both possible Russian efforts to sway the election. Surprisingly, she says top Democrats initially instructed her not to discuss her concerns with others.

    But even more than the Russians, Brazile says she feared possible retribution from shadowy elements within the campaign and the Democratic Party who might blame her for the leak. Her fears only intensified, she says, after the mysterious shooting of former campaign staffer Seth Rich, who the authorities said was killed during a robbery, though many so-called conspiracy theorists have speculated about a possible Democratic plot to kill Rich for his role in leaking the stash of DNC emails to Wikileaks. Brazile's anxiety eventually spiraled out of control, to the point where she feared for her own life while serving as interim chairwoman of the DNC.

    Brazile describes her mounting anxiety about Russia’s theft of emails and other data from DNC servers, the slow process of discovering the full extent of the cyberattacks and the personal fallout. She likens the feeling to having rats in your basement: “You take measures to get rid of them, but knowing they are there, or have been there, means you never feel truly at peace.”

     

    Brazile writes that she was haunted by the still-unsolved murder of DNC data staffer Seth Rich and feared for her own life, shutting the blinds to her office window so snipers could not see her and installing surveillance cameras at her home. She wonders whether Russians had placed a listening device in plants in the DNC executive suite.

     

    At first, Brazile writes of the hacking, top Democratic officials were “encouraging us not to talk about it.” But she says a wake-up moment came when she visited the White House in August 2016, for President Obama’s 55th birthday party. National security adviser Susan E. Rice and former attorney general Eric Holder separately pulled her aside quietly to urge her to take the Russian hacking seriously, which she did, she writes.

    While she doesn’t elaborate on her reasons for suspecting that Rich’s death may have been a homicide, just the fact that Brazile says she, too, suspected that something nefarious might’ve been afoot is reason enough to take a second look at Rich’s death. Of course, if it’s true that Rich was killed as punishment for leaking the emails, then that would of course invalidata most of the evidence supporting the Russia interference narrative that has been propagated by the Democrats and their partners in the intelligence community.

  • Will 'RussiaGate' Result In Social Media Regulation?

    Authored by Andrew Korybko via Oriental Review,

    Whether preplanned or inadvertent, one of the most likely and far-reaching consequences of the fake news RussiaGate scandal is that Facebook and other social media giants might soon come under strict regulation by the state.

    The artificially contrived and “deep state”-driven RussiaGate scandal has been inflated to epic proportions and has already resulted in the unexpected suicide of the US’ soft power, but this never-ending conspiracy theory is now poised to affect the rest of the world in a completely different way due to the likely “regulation” that Washington might soon impose on social media giants like Facebook. “Traditional” media has long been clamoring for the American government to do something about the astronomical rise of social media, which has poached millions upon millions of people away from newspapers and TV stations and redirected them to their smartphones instead. From the perspective of social media and many of its users, however, these people weren’t “poached”, but liberated from their prior status as a captive audience to conventional influence techniques and allowed to roam freely in cyberspace as they searched for alternative non-mainstream interpretations of current and past events.

    The rise of social media coincided with that of Russia’s publicly funded RT and Sputnik media outlets, whose reporting and analyses soon went viral all over the internet because they satisfied the crucial information desire that so many people were craving for years. Their explosive popularity led to them gaining a sizeable following among Western audiences, who voluntarily shared their content online and contributed to what Facebook describes as “organic growth”, or the natural trending of non-advertised posts. While posing a challenge to Establishment narratives all across the world, neither RT nor Sputnik were seriously viewed as  “threat” by the US and its allies because they had yet to be blamed for affecting any real-life change outside of the internet “matrix” of clicks, likes, and shares.

    That all changed during the 2016 US election, however, since the Mainstream Media’s monopoly on information was wielded in such a blatantly and obviously biased nature against Trump that countless Americans began countenancing what would have previously been unthinkable to many of them just a year prior, and that’s trawling foreign-based media outlets in order to get a more accurate sense of the truth that their own country’s media barons were suppressing. This certainly says a lot about the deep distrust that was already prevalent among many Americans towards their own government, but it hit its climax the more that the Mainstream Media began concocting openly fraudulent “news” stories about Trump in a bid to derail his candidacy, with this effort becoming unquestionably clear when compared with the flowery coverage given to anything that Clinton said or did. As is now known, Americans rebelled against the Establishment by voting Trump into office, and the “deep state” was left scratching its head about how this could happen.

    The author explained the domestic dynamics at play in his November 2016 article right after the election titled “Dear Foreign Friends, Here’s Why Trump Won (From A Clevelander)”, but the general idea is that the Democrats’ weaponization of identity politics miserably backfired as Americans sought out a radical solution to bring balance to their “deep state”-destabilized country. Nevertheless, the Establishment couldn’t bring itself to recognize the obvious, take the loss, and move on to fight another battle later on, hence why they decided to continue pressing the cringe-inducingly ridiculous narrative that “Russian trolls” somehow swayed the election due to their social media activity, and hinting that there might even be a whiff of outright collusion between Presidents Trump and Putin in organizing this movie-like conspiracy.

    This narrative is convenient for many geopolitical reasons that are outside the scope of this analysis, but the domestic benefit that was expected to be derived from this storyline is that “traditional” media and the Establishment finally had the pretext that they were looking for to “regulate” social media. Bringing Facebook, YouTube, Twitter, and others into compliance with already existing American laws about revealing the source of election-related advertisements is one thing, but pressing these platforms to restrict the activity of Russian publicly financed media outlets like RT and Sputnik, as well as speculatively “shadow banning” some of their staff and supporters, is a bridge too far into dystopia, as is doing so on the US governments’ double-standard FARA witch hunt which alleges that the two are “foreign agents”. As a result, it appears as though the “good ‘ole days” of “freewheeling” across Facebook and sharing whatever content one finds enjoyable is soon coming to an end as Washington begins to “regulate” social media on the basis of “safeguarding democracy”.

    Of course, the real reason is that some vested power interests also have a stake in supporting their decades-long allies in the “traditional” media against their new social media rivals, to say nothing of the self-evident imperative in suppressing non-mainstream news and analyses through the US’ War on Russian Media. The forthcoming “regulation” might even go further than what’s presently being observed, as there’s a chance that Washington could seek to label social media platform like Facebook as being “media companies” in their own right, which would then instantly force them to comply with the existing legislation that their “traditional” media counterparts have had to contend with for years. In a sense, this would “level the playing field” between “traditional” and social media, but it could also destroy the very essence of social media itself. Not only that, but if the US comes to consider Facebook and Google as “monopolies”, then they could be broken up and “regulated” even further.

    What’s terribly ironic about all of this is that the US government’s international stance has always been in favor of “internet freedoms”, routinely attacking Russia, China, and Iran for implementing national security-based legislation aimed at thwarting the risk that Color Revolutions and Hybrid Wars could dangerously recruit across social media, but now all of a sudden “the land of the free” is doing the same thing as the countries that it regularly smears as “dictatorships”, though without any convincing reason and depending solely on a trumped-up fake news conspiracy theory. As is typical, the ruling Establishment and their “deep state” supporters condescendingly believe that their true intentions are invisible to the naked eye because of their presumption that the populace is stupid and politically unaware, though the very fact that their “perfect candidate” was defeated by a “dark horse” like Trump totally disproves this notion.

    The reality is that most Americans, and the rest of the world at large, see the US government’s “regulation” of social media for what it actually is, and that’s a dictatorial power grab which crushes any remaining doubt that “the land of the free” is anything but, and that the “freedom of speech” is only allowed if one is either supporting the Establishment or behaving as its “controlled opposition”. The number one thing that “American Democracy” can’t accept is the free flow of information and interpretations that challenge the prevailing state-supported narrative, which in and of itself negates the very basis of what the world always thought that “American Democracy” was supposed to be about, and this powerful revelation proves that the US government’s accusations that its geopolitical rivals are “authoritarian” was never anything more than a psychological projection of its own self.

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Today’s News 4th November 2017

  • The Economic End Game Continues

    Authored by Brandon Smith via Alt-Market.com,

    In November of 2014 I published an article titled 'The Economic End Game Explained'. In it I outlined what I believed would be the process by which globalists would achieve what they call the "new world order" or what they sometimes call the "global economic reset."

    As I have shown in great detail in the past, the globalist agenda includes a fiscal end game; a prize or trophy that they hope to obtain. This prize is a completely centralized global economic structure, rooted in a single central bank for the world, the removal of the U.S. dollar as world reserve currency, the institution of the SDR basket system which will act as a bridge for single a global currency supplanting all others and, ultimately, global governance of this system by a mere handful of "elites."

    The timeline for this process is unclear, but there is some indication of when the "beginning of the end" would commence. As noted in the globalist owned magazine The Economist, in an article titled "Get Ready For The Phoenix," the year of 2018 seems to be the launching point for the great reset. This timeline is supported by the numerous measures already taken to undermine dollar dominance in international trade as well as elevate the International Monetary Fund's SDR basket. It is clear that the globalists have deadlines they intend to meet.

    That said, there have been some new developments since I wrote my initial analysis on the end-game strategy that I think merit serious attention. The end game continues, faster than ever before, and here are some of the indicators showing that the "predictions" of the globalists at The Economist in 1988 were more like self-fulfilling prophecies and 2018 remains a primary nexus point for a re-engineering of our economic environment.

    Using The East To Dismantle The Petrodollar

    As I mentioned in last week's article, 'Lies And Distractions Surrounding The Petrodollar,' there has been silence and often disinformation in the mainstream when it comes to the quite open and obvious international pivot away from the dollar as the defacto purchasing mechanism for oil. This trend is only set to accelerate in two months as China begins fulfilling oil contracts in the Yuan instead of the dollar.

    The problem is that even in the alternative media there is a continuing myth that Eastern nations are angling to "break away" from the international order. I often see the argument presented that the loss of the petrodollar can only be a good thing for the world. I am not here to comment on whether the end of oil-denominated in dollars is a good or bad thing. I am here, though, to point out that there is absolutely no indication whatsoever that major eastern powers like Russia and China are acting to undermine the existing globalist system.

    On the contrary, China and Russia remain, as ever, heavily partnered with the IMF as well as the Bank for International Settlements, and their ties to international banking monoliths like Goldman Sachs and JP Morgan are long established.

    Eastern political and economic officials have consistently called for a new reserve system supplanting the dollar, this is true. But what so many analysts seem to overlook is that they ALSO call for that new system to be dominated by the IMF.

    The delusion that the financial world operates on is that the IMF is "controlled" by the U.S. It is not. It is controlled by international bankers, who have no loyalties to any specific country. Once one understands this fact, the systematic sabotage of the U.S. makes perfect sense, as well as the collusion between China, Russia and the IMF. America is a sacrificial appendage of the globalist edifice and is being torn down piece by piece in order to feed the creation of something new and perhaps even more sinister.

    As George Soros proclaimed back in 2009, the "new world order" would rely in part on China as a replacement economic engine for the globalist machine and depend far less on a diminishing United States. China would serve as a smaller engine, but a replacement engine none the less.

    China is more than happy to oblige the globalists with a concerted  and incremental program of de-dollerization. But this does not mean that the end-goal is a "petroyuan." No, the goal is for the IMF to assert the dominance of the SDR basket system as a reserve hub. And, China is now the flagship market for the SDR after its recent induction into the fold. There will be no single reserve currency after the dollar is brutalized. At least, not until all currencies are homogenized through the SDR basket and finally replaced with a single global currency unit. Until then, the IMF or the BIS will dictate nation-to-nation trade and monetary exchange.

    It only follows that this highly-volatile rebirth of the global financial order would begin in part with the dollar's loss of petro-status. The oil trade is the one defining element that gives the dollar a fundamental edge over all other currencies. It is the closest thing we have to commodity backing for the dollar and it is an advantage no other currency in the world can yet boast. There are many ways to destroy the dollar, but the BEST method would be to end its petro-status.

    The Global Currency Unit Is Already Here

    One argument I used to hear often from naysayers on global currency was that there "is no monetary unit with enough liquidity to replace the dollar." Of course, these people have no understanding of the SDR basket and how it could be used to envelop and absorb most if not all currencies into a single reserve mechanism. That said, I understand the confusion. When people think of currencies, they think of physical tickets of measurement; they want to see a piece of paper with symbols, or, they want to at least see a brand name for the product, which is what all currencies really are.

    When The Economist in 1988 called for a global currency to launch in 2018, they were perhaps not aware of the exact form the destructor would take. Even in 2014 I was not fully convinced we had enough evidence on what that unit of measurement would be or look like. Today, it is clear as crystal — the one world currency system will not only be a cashless system, but it will also be based on digital blockchain technology.

    As I examined in my article 'The Globalist One World Currency Will Look A Lot Like Bitcoin,' while some politicians and banking moguls publicly attack blockchain-based products like Bitcoin or Etherium, in the background they are actually heavily invested in these systems and are even building their own. With central banking mascots like Ben Bernanke becoming keynote speakers at blockchain conferences, it is not exactly an elusive secret that the global banks love blockchain tech.

    Even major elitist corporations like Amazon appear ready to adopt blockchain products as currencies.  So, one needs to ask the question:  If the blockchain and Bitcoin are such a dire threat to the centralization of the establishment, why are they rapidly laying all the groundwork necessary for blockchain systems to replace paper currencies?

    What is interesting to me is that even in the highly vigilant world of alternative economics, which is well aware of the trend towards a global currency system, blockchain systems are still revered as if they will save us from central bank tyranny. Very few people have noticed that The Economist call for a 2018 one world monetary framework has arrived slightly early; it has been right under our noses for several years. With blockchain-based methods of exchange, a replacement structure for the dollar and all other national currencies is not very far away.

    The Federal Reserve Implosion Program Continues

    I remember back before 2008 when the media almost never treated actions at the Federal Reserve as major news.  In fact, I remember back when the average American had never even heard for the Federal Reserve, and some believed the very existence of the institution was a "conspiracy theory".  Now, the nomination for the new Fed chair is at the top of the news feeds, but for all the wrong reasons.

    The changing of the Fed chair is absolutely meaningless as far as policy is concerned.  Jerome Powell will continue the same exact initiatives as Yellen; stimulus will be removed, rates will be hiked and the balance sheet will be reduced, leaving the massive market bubble the Fed originally created vulnerable to implosion.  Equities in particular display the behavior of an out of control bullet train similar to the 2006/2007 bubble, or even the delusional exuberance prominent before the crash of 1929. 

    All of this optimism is dependent on two things – dumb blind faith that all investors will continue to act in perfect concert to always "buy the dip", and, continued faith that central banks will forever step in to obstruct and reverse any market correction.

    An observant person, however, might have noticed that central banks around the world seem to be acting in a coordinated fashion to remove stimulus support from markets and raise interest rates, cutting off supply lines of easy money that have long been a crutch for our crippled economy.  The Bank of England raised rates this past week, as the Federal Reserve indicated yet another rate hike in December.  The Europeans Central Bank continues to prep the public for coming rate hikes, while the Bank of Japan has assured the public that "inflation" expectations have been met and no new stimulus is necessary.  If all of this appears coordinated, that is because it is.

    Fed policy is not dictated by the Fed chair, and it is certainly not dictated by Donald Trump. As former chairman Alan Greenspan openly admitted, the central bank does NOT answer to government, it is an autonomous policy making machine.  Fed chairs are as easily replaced as lawnmower parts; they are mascots for the banking system, nothing more.  Once they are "nominated" by the president, they take their orders from another source entirely, and I would even question the validity of the nomination process and how the original list of candidates is chosen.  For the real puppeteers at the Fed, one would need to look to an organization outside the U.S., called the Bank for International Settlements.

    Many Subtle Changes Add Up To Unprecedented Instability

    I think it is vital for people to consider time when it comes to economics. Changes we think were abrupt during historic moments of crisis were often not abrupt at all. Almost all financial crisis "events" were preceded by years if not decades of growing but subtle cracks in the foundation. If you were to travel back 10 years ago and explain to the average person (or the average mainstream economist) what is happening today, he would probably scoff indignantly. Yet today these things are accepted as commonplace, or ignored as unimportant.  Time and short attentions spans are the bane of free societies.

    The skeleton of the "new world order" economy is right in front of us. The triggers for explosive change have already been planted. What concerns me is, when these changes come to fruition and crisis follows, will the masses even notice?

  • "It's Okay To Be White" Signs Found At Maryland High School

    The ‘Politically Incorrect’ thread on 4chan has done it again.

    Sparking media attention surrounding a white nationalist movement to post signs in public areas including academic institutions that say, “It’s okay to be white”.

    Readers of the blog, organized on social media and used the cover of Halloween to post “It’s okay to be white” across various academic institutions in the United States.

    One of the most publicized stories is coming from a Maryland High school this morning of an unidentified man posting signage on numerous doors early Wednesday morning.

    School officials at Montgomery Blair High School in Silver Spring, Maryland removed the signs before students arrived. Security footage from the school was released on Thursday showing someone in a grey hoodie and blue jeans posting the signs on as many as 10 exterior doors.

    “We are taking this seriously and are investigating this incident. Our research so far has indicated that this may be part of a concerted national campaign to foment racial and political tension in our school and community,” Johnson said.

     

    He also said, “I want you to know that Montgomery Blair is a very smart, diverse and inclusive community and we will not fall victim to attempts to divide us”.

    Posted on 4chan, the call to action was to bait the politically correct leftist media…

    Video shows someone who is triggered by an “It’s okay to be white” sign ripping it down from a pole.

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    “It’s okay to be white” signs showing up in Alabama

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    More signage at University of Maryland

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    Bottomline: The Divided States of America is heading for a very bad day, as the population continues to be fragmented. More evidence that social tensions have not abated, but are compressing and the next ‘Charlottesville event’ is around the corner.

  • All Of The World's Money And Markets In One Visualization

    Millions, billions, and trillions…

    When we talk about the giant size of Apple, the fortune of Warren Buffett, or the massive amount of global debt accumulated – all of these things sound large, but they are actually extremely different in magnitude.

    That’s why, as Visual Capitalists' Jeff Desjardins explains, visualizing things spatially can give us a better perspective on money and markets.

    How Much Money Exists?

    This infographic was initially created to show how much money exists in its different forms. For example, to highlight how much physical cash there is in comparison to broader measures of money which include saving and checking account deposits.

    Interestingly, what is considered “money” depends on who you are asking.

    Are the abstractions created by Central Banks really money? What about gold, bitcoins, or other hard assets?

    A New Meaning

    However, since we first released this infographic in 2015, “All the World’s Money and Markets” has taken on a different meaning to us and many others. It’s a way of simplifying a complex universe of currencies, assets, and other financial instruments in a way that people can understand.

    Numbers represented in the data visualization range from the size of the above-ground silver market ($17 billion) to the notional value of all derivatives ($1.2 quadrillion as a high-end estimate). In between those two extremes, we’ve added many other familiar measures, such as the GDP of California, the value of equities, the real estate market, along with different money supply metrics to give perspective.

    The end result? A visually pleasing, but enlightening new way to understand the vast universe of global assets.

    Courtesy of: Visual Capitalist

    *  *  *

    To get “All the World’s Money” in book or poster form, go to the Kickstarter page now. Deadline: Oct. 31, 2017

  • What To Do If All Hell Breaks Loose During Tomorrow's "Antifa Uprising"

    Authored by Daisy Luther via The Organic Prepper blog,

    Tomorrow is November 4th, the date that has been bandied about by wannabe Communists and people who hate the President since last summer as the starting date of their uprising.

    Cities across the country have planned events (find the list of locations here) and I’ve gotten photos from people in small towns all over the place of signs with the ominous warning, “November 4th It Begins.”

    Now, before we delve into prepping for this, please know that there is every chance this is a tempest in a teapot. It’s most likely that anywhere from 20 to 200 people will show up with their signs, chant mean things about the President, maybe throw a rock through a window, and go home. If you aren’t near these locations, you probably won’t even know it’s going on unless you check the news. So, while you should be prepared for anything (as usual), you shouldn’t be afraid.

    But…considering the fact that this is on every media outlet everywhere (the NY Times actually allowed it to be promoted with a full-page ad on November 1), the possibilities of all hell breaking loose should at least be considered.

    I’ve cited before Newton’s Third Law of Physics which states “For every action, there is an equal and opposite reaction.” From Antifa, the threats of violence are becoming more extreme. And if this gets crazy, there WILL be a reaction. 

    A lot of folks are sick and tired of being pushed around, threatened, and censored by these ironically named Anti-Fascists. You need only check out the comments section on any article about the potential event to know that some fed-up Americans intend to push back and counter-protest. Hard. I  have talked to more than one member of the military who says, “Bring it on.” Tensions have the potential to boil over.

    If your goal is to be out there in the thick of things because you believe it is your obligation to do so, this article probably isn’t for you and I offer you my very best wishes for your safety.

    If you are planning to avoid any conflict and focus on keeping your family away from trouble, you can be prepared for the possibility that civil unrest erupts. By planning ahead, we can avoid the fear, panic, and confusion that leads people to rush to the store and clear the shelves like a horde of hungry locusts.  We can stay away from the angry masses, the rioters who will use any excuse to steal, and the hungry people who are determined to feed their kids no matter who stands in their way.

    Whether the next few days lead to pandemonium or even martial law to crack down on unrest, a prepared mindset, a defense plan, and a well-stocked home can help to keep you and your family out of harm’s way. My personal goal is the safety and security of my family. This is my primary responsibility.

    In her article Anatomy of a Breakdown, Tess Pennington wrote:

    “When you take the time to understand how a breakdown behaves and how it progresses, only then can you truly prepare for it.

     

    This glimpse into a systemic breakdown is based on an isolated, limited disaster or event where emergency responders have been deployed. I must emphasize that all bets are off if the event is wide spread, affecting multiple tens of millions of people simultaneously.”

    Spend today getting ready, just in case. Here are the most vital things that you can do to be prepared for civil unrest.

    Get home

    In a perfect world, we’d all be home, watching the chaos erupt on TV from the safety of our living rooms.  However, reality says that some of us will be at work, at school, or in the car when unrest occurs.  You need to develop a “get-home” plan for all of the members of your family, based on the most likely places that they will be.

    • Devise an efficient route for picking up the kids from school.  Be sure that anyone who might be picking up the children already has permission to do so in the school office.
    • Keep a get-home bag in the trunk of your car in case you have to set out on foot.
    • Stash some supplies in the bottom of your child’s backpack – water, a snack, any tools that might be useful, and a map.  Be sure your children understand the importance of OPSEC. (Here’s a school kit that won’t get your kid expelled, but in this situation, your children should NOT be encouraged to set off on their own.)
    • Find multiple routes home – map out alternative backroad ways to get home as well as directions if you must go home on foot.
    • Find hiding places along the way.  If you work or go to school a substantial distance from your home, figure out some places to lay low now, before a crisis situation.  Sometimes staying out of sight is the best way to stay safe.
    • Avoid groups of people.  It seems that the mob mentality strikes when large groups of people get together.  Often folks who would never ordinarily riot in the streets get swept up by the mass of people who are doing so.
    • Keep in mind that in many civil disorder situations the authorities are to be avoided every bit as diligently as the angry mobs of looters. Who can forget the scenes of innocent people being pepper sprayed by uniformed thugs in body armor just because they happened to be in the wrong place at the wrong time?

    Stay home

    Once you make your way home or to your bug-out location … STAY THERE.

    By staying home, you are minimizing your risk of being caught in the midst of an angry mob or of sitting in stalled traffic while looters run amok.  In most scenarios, you will be far safer at home than you will be in any type of shelter or refugee situation. (Obviously, this isn’t true in all cases – you must use common sense before hunkering down.)

    This is when your preparedness supplies will really pay off. If you are ready for minor medical emergencies and illnesses, a grid down scenario, and a no-comm situation, you will be able to stay safely at home with your family and ride out the crisis in moderate comfort.

    Be sure you have a supply of the following:

    • Water
    • Necessary prescription medications
    • Food and an off-grid way to cook it (Do NOT rely on mail order stuff for an event starting tomorrow – get your supplies locally)
    • Or food that requires no cooking
    • First aid supplies
    • Lighting in the event of a power outage
    • Sanitation supplies (in the event that the municipal water system is unusable, this would include cleaning supplies and toilet supplies)
    • A way to stay warm in harsh winter weather
    • Over-the-counter medications and/or herbal remedies to treat illnesses at home
    • Survival and first aid manuals (hard copies in case the internet and power grid are down)
    • Alternative communications devices (such as a hand-crank radio or a ham radio) so that you can get updates about the outside world
    • Off-grid entertainment:  arts and craft supplies, puzzles, games, books, crossword or word search puzzles, needlework, journals

    Be prepared to defend your home

    Sometimes despite our best intentions, the fight comes to us.  Even though we stay home, something about our place draws the attention of an unsavory person or group.  Defense is two-fold.  Your best defense is avoiding the fight altogether. You want to stay under the radar and not draw attention to yourself.

    The extent to which you strive to do this should be based on the severity of the unrest in your area. Some of the following recommendations are not necessary for an everyday grid-down scenario but could save your life in a more extreme civil unrest scenario.

    • Keep all the doors and windows locked.  Secure sliding doors with a metal bar.  Consider installing decorative gridwork over a door with a large window so that it becomes difficult for someone to smash the glass and reach in to unlock the door.
    • Put dark plastic over the windows. (Heavy duty garbage bags work well.)  If it’s safe to do so, go outside and check to see if any light escapes from the windows. If your home is the only one on the block that is well-lit, it is a beacon to others.
    • Don’t answer the door.  Many home invasions start with an innocent-seeming knock at the door to gain access to your house.
    • Keep cooking smells to a minimum.  If everyone else in the neighborhood is hungry, the meat on your grill will draw people like moths to a flame.
    • Keep pets indoors. Sometimes criminals use an animal in distress to get a homeowner to open the door for them. Sometimes people are just mean and hurt animals for “fun”.  Either way, it’s safer for your furry friends to be inside with you.
    • Remember that first responders may be tied up.  If the disorder is widespread, don’t depend on a call to 911 to save you – you must be prepared to save yourself.  Also keep in mind, as mentioned earlier in the article – the cops are not always your friends in these situations.
    • Don’t be drawn outside. Sometimes, thugs will try to engage people by damaging their car or property outside.  Going outside, you will likely be outnumbered.  In most cases, you’ll be better off just calling the insurance company the next day.

    If, despite your best efforts, your property draws the attention of people with ill intent, you must be ready to defend your family.

    • Many preppers stockpile weapons and ammunition for just such an event.  When the door of your home is breached, you can be pretty sure the people coming in are not there to make friendly conversation.  Make a plan to greet them with a deterring amount of force.
    • Have a safe room established for children or other vulnerable family members.(Here are instructions – you may be able to put something together quickly, depending on your home.)
    • Plan an escape route.  If the odds are against you, devise a way to get your family to safety.
    • Have a plan to deal with a fire. Fire is often used in situations like this. Be sure to have well-maintained fire extinguishers in case of a small blaze.

    What about a martial law event?

    While many of the officers involved most likely just want to resolve the situation and go home to their families, the methods that are often used are not methods most of us wish to encounter.

    In a highly charged situation like this, police and military are trained to use the most efficient methods to speedily shut down a conflict. These methods can include tear gas, sound cannons, and outright physical assaults on citizens. It’s important to note that fear can be a powerful motivator when deciding how much force is appropriate when addressing a threat. Cops are just as subject to fear as the rest of us. 20 cops with shields and batons would be quite reasonable to fear an angry mob of hundreds of shouting people.

    Your safety when interacting with officials during a martial law situation does not rely on the intentions of police officers and military. It really doesn’t matter if they are trying to crush your rights under a jack-booted heel, or whether they are trying to benevolently keep people safe and re-establish peace and harmony.

    Here are some suggestions to help keep you safe when dealing with cops and soldiers.

    • Avoid crowds. If you are in the midst of a crowd, you’ll be considered part of the crowd and treated exactly like everyone else in that group. If they get tear-gassed, so will you. It’s guilt by association. If the crowd is violent, and you are part of the crowd, you will also be considered violent, and you’ll be dealt with accordingly. Legally, you are actually guilty if you are part of a group that is violent.
    • Be polite. If you have to interact with officers, be courteous. You won’t restore the Constitution by arguing with them or threatening them. It’s fine to assert your rights – you don’t have to allow them to search your house without cause, for example, but do so civilly. Belligerence will get you nothing but a beat-down.
    • You don’t get to explain. In a highly charged situation, the cops probably aren’t going to listen to you when you try to explain that you’re just taking that baseball bat in your hand over to your nephew’s house so he can hit some balls in the backyard. No matter how innocent your intentions are, if you’re walking like a duck, you’re going to be treated like a duck. Training will kick in, and perceived threats will be immediately neutralized by whatever means the cops find necessary.
    • Stay home. It really isn’t worth risking your physical safety to go see what’s going on.

    Underneath the uniform, cops are human.  I’m not justifying the brutality, the methods they sometimes use, or the assaults on journalists. Cops are just as likely to be swept up in a herd mentality as protesters and rioters are during a high-stress situation. By understanding this, you can be better prepared.

    *  *  *

    Every civil unrest scenario is different.  You must make a personal plan based on your environment, your neighbors, and the type of situation that is occurring in your area.  By thinking ahead, you’ve already improved your family’s chances of surviving unscathed.

  • Do Not Break Your iPhone X

    With the iPhone X, Apple’s re-designed anniversary iPhone, official launch today, we saw the familiar images of people lining up in front of Apple Stores around the world to be among the first ones to get their hands on the new device.

    Despite the X’s lofty price – it starts at $999 for the smaller 64 GB model, making it the most expensive iPhone to-date – it’s safe to say that Apple could sell a lot more units on Friday than it can possibly produce by then. When the iPhone X became available for pre-order last Friday, it was sold out within minutes and the estimated delivery time currently stands at 5 to 6 weeks.

    But, as Statista's Felix Richter notes, to all those quick or lucky enough to get an iPhone X anytime soon, our advice is: do not drop it.

    Infographic: Do Not Break Your iPhone X | Statista

    You will find more statistics at Statista

    According to Apple’s official support website, the company’s latest smartphone is just as expensive to repair as it is to acquire.

    Repairing the screen alone will set you back $279 or nearly twice what you pay for a new iPhone 8 screen. If you’re unlucky enough to break more than just your screen, you’ll be out $549 to get your phone fixed.

    Oops…

  • Kyle Bass Interviews Mark Cuban: "AI Will Help The FANG Stocks Crush Bitcoin"

    Entrepreneur and TV personality Mark Cuban is one of the most visible businessmen in America (present occupant of the Oval Office aside) – though whether his reputation is warranted or not is open to debate. LIke Trump, he is a master of self-promotion – he authored a popular business book – the aptly titled “How To Win At The Sport Of Business” (Cuban owns the Dallas Mavericks) – and is one of the hosts on a popular network reality TV show, “Shark Tank.”

    And in an interview Kyle Bass for RealVision Television, Cuban shares his opinions on artificial intelligence and ICOs, which our readers know are two of the most-overhyped tech trends of the year.

    But first, Cuban and Bass warm up with some small talk about parenting, where Cuban readily shares his strategy for raising kids to not become, in his words, “entitled jerks.”

    MC: It's like, you want something? You have to earn it. It may be doing math. Like, with my 8-year-old, it's math for money. You have to answer math questions to earn $1 or $5.

     

    With my middle daughter, it's reading a non-school book. So, I'll give her a history book or a biography. And she'll make $20. If it's over 300 pages, she can make more.

     

    And then my oldest daughter is a challenge. My 14-year-old, that's a whole different beast. All those things worked up until this year.

     

    So, we're working through trying to figure out what kind of jobs she can do. So, the point being that, I want them to recognize like I did growing up, that you have to earn what you're going to get and that it's just not going to be waiting for you. And so, whether that amount is $5 million like I have now or $10 million when they get to 30, then who knows? We can adjust. But it's I think now is really where it matters and the habits that I get them into now are important.

    While Shark Tank doesn’t pay as well as some of his other ventures, Cuban says doing the show is a labor of love. He says he enjoys hearing stories from parents about how watching shark tank inspired their kids to become more entrepreneurial.

    In one notable aside, Cuban confirmed what many dedicated “Shark Tank” fans have probably suspected for years: The producers intentionally pick some of the more outlandish pitches (remember Cougar Energy? The energy drink shot marketed toward tired, single, middle-aged woman?) to inject a little excitement into the show.

    Though sometimes the silliest pitches can yield surprisingly strong returns, Cuban said.

    MC: Yeah. Because it's TV, right? So, I invested in a guy – so when I first did the show – I came on as a guest 7 years ago. And there was a guy that did a little dance – I want to draw a cat for you, right? And I gave him $25,000 for a third of his company, and all we did was draw stick figures of cats. And he charged $10 a pop. And people were buying them. And so, literally, I got probably a 50% return of my $25,000 investment.

     

    And also, on top of that, I got hired to do 10 cats at $1,000 apiece by somebody because the silliness of it is what sold. But I made the investment, not because I wanted to draw cats, right, but because he was really good at SEO. And so sometimes you see somebody who doesn't really know how to manifest their skill set. So, you start with them here, and we did some things there, and then we took his creativity and pushed him into other areas. And now he's on to bigger and better things, which is great by me.

    Bass then moved on to asking Cuban a few questions about how he manages his $3.3 billion.

    Cuban said he doesn’t think about investing strictly in terms of monetary return. When he chooses companies to invest in, he thinks in terms of the company’s overall impact.

    Moving on, Bass asked how Cuban how he thinks about passing on his wealth to his children.

    Cuban says he’s considering a similar approach to Warren Buffett whereby he leaves either $5 million or $10 million to each of his children in his will, with conditions so they don’t receive the money until they’re thirty. Cuban often speaks about how his teenage work experience selling garbage bags and delivering newspapers helped prepare him for life as an entrepreneur.

    Cuban: So, when I wrote my will initially, it was $5, and not till they were 30, right? So that I wanted them to go through life. And I know my wife, if she outlives me – probably will – she'll fill in the blanks like she does today, right? Like, my kids want money today, it's like, how are you going to earn it? I'm not that dad that says here's a present, right, here's a bank account, here's a debit card, just use it, or whatever– no. Here's your Amazon account. Not at all.

    Their conversation soon turned to global central bank policy, and how aggressive money printing by the largest CBs has helped distort the global cash-to-GDP ratio, which now stands at around 170%, compared to historical levels of just 40%…

    KB: Yeah. So, when we think about– global cash balances today are the largest they've ever been. So when I think about what happened is – the first QE that happened in the US, and Europe, and Bank of Japan, Bank of England had to fill a hole, right? There was there was a hole.

     

    Given the global financial crisis – global financial institutions were insolvent. They had to print that money. They had to inject it-

     

    MC: No question.

     

    KB: – in the banks. And that's something that you and I would have done if we were running these institutions. Whether or not we agree with expanding fed balance sheets, we'd have to do it. So, the second part was the part that felt good, the part where we started to see some growth, and started to see cash getting distributed. And the interesting thing is it was fed policy was unintentionally distributed to the wealthy because the wealthy are the only people that could use leverage and assets, and they don't spend it right away.

     

    MC: And because of this drop in the stock market, people who could afford to lease got out of the market. And because so many people lost their homes, whatever savings you had, you used to try to save your house and to try to reimagine your life, if you will, and recreate your

     

    KB: Exactly right.

     

    MC: And so, you've got a greater disparity in standards of living, and that's where we are today.

    However, this excess liquidity created by the central banks will eventually evaporate as advances in artificial intelligence and automation trigger a deflationary spiral as they push more humans out of the labor market.

    Cuban believes that – for better or worse – automation will change the world, and that companies should be proactive about engaging in it.

    Ultimately, this trend will benefit tech stocks like Amazon and Apple. The biggest tech companies, Cuban said, are going to continue to swell in size, influence and profitability.

    KB: – so innovational that we've had good deflation. But I think now, when you look at the price of just about anything in life, it's going up. My view –

     

    MC: See, I would disagree. Right. I think artificial intelligence is going to change everything, everything, 180 degrees. I've been in the tech business. I started selling PCs in 1982, right? I started selling local area networks – we were the first companies – my first start-up in 1983. I sold that, and then I started trading just tech. I started a hedge fund – started just trading tech stocks – sold that within 90 days. And then we started streaming, then first hide – all these things have happened that have changed how we do business, changed how we lived our lives, changed everything, right, the internet. But what we're going to see with artificial intelligence dwarfs all of that.

     

    KB: And you think it will be deflationary?

     

    MC: Yes. Because there's going to be –

     

    KB: Because it displaces jobs?

     

    MC: A lot of jobs.

     

    KB: OK. That's not good.

     

    MC: Well, you can make arguments, right – it's not a question of how it plays out over 100 years. It's a question of how plays out over 10 years, 20 years, right? Who knows what exactly – But I can tell, at the beginning, which jobs are going to be displaced. I can tell you the real estate is going to be displaced. I've talked to major companies that, they're asking me, Mark, we're going to have all this extra real estate in all these towns. What are we going to do with it? Do you have any ideas? And I'm talking to them about –

     

    KB: Because they're going to be centralizing their operations?

     

    MC: Just fewer people.

     

    KB: Fewer people.

     

    MC: Yeah. Just fewer people. So, the concept of you calling in to make an appointment to have somebody pick up your car to get your oil changed, right– someone will still drive to get your car, but there's going to be no people in transacting any of it.

     

    KB: That's terrible.

     

    MC: It is what it is.

    Cuban says he agrees with Vladimir Putin’s assessment that whichever country wins the AI innovation race could wind up controlling the world.

    KB: Or best professors, for that matter. They're pulling them out of school.

     

    MC: Exactly right. And so, Vladimir Putin says the winner in AI controls the world. China puts together a future plan saying whoever dominates in AI– and they're subsidizing Tencent, Alibaba, et cetera, right?

     

    KB: They know it's a race.

     

    MC: It is a race. We cut our Office of Technology and Science to one person who was an assistant to Peter Thiel. That's where we stand. So, we talk about infrastructure jobs, robots are built in Germany, and they're getting bought by Chinese companies. In some respects, I think some Japanese companies bought as well. We don't build robots here very well, right? I just invested in my first robotics company, Hirebotics that puts robots into companies. They're in Kansas City, I think it is, now.

     

    But they lease and rent and sell robots into all these different types of circumstances to replace people, right? But I had to learn. I'm not saying it's a good thing or a bad thing. It's going to happen with or without me. But I wanted to learn what was going on. Those building up a robotics industry here, investing in our AI industry here, that's the new infrastructure. Because if we don't do it, and China or Russia win those wars, we're SOL. We're out of luck, right?

     

    And so, when we talk about the price of assets going up – if you're talking about intellectual assets, if you're hiring, like we were just saying, the price is skyrocketing. Montreal has become the center of the universe for computer vision. It's not US-based schools that are dominating any longer in those areas. We've got lots more kids – MIT, all different schools, right? And kids are starting to realize there's a place for them to go. And I'm out there telling people, the first trillionaire is going to come from somebody who comes up with something – 

    Asked for his opinion on digital currencies, Cuban likened the inherently deflationary bitcoin to a work of art that appreciates as it ages.

    But in Cuban's view, the biggest tech stocks will eventually outperform bitcoin as they master the ability to innovate while also achieving massive scale.

    KB: It's just a digital asset that's a collectible? Yeah.

     

    MC: Right? And in this particular case, it's a brilliant collectible that's probably more like art than baseball cards, stamps, or coins, right, because there's a finite amount that are going to be made, right? There's 21.9 million bitcoins that are going to be made. And if enough people hold and don't sell, and enough people borrow to buy, just like we saw in the stock market. Because look, as much as a share of stock is ownership in a company, that's the all-time lie, right? You have no authority, no ownership.

     

    KB: Unless you control it.

     

    MC: Yeah. Unless you're the controlling shareholder, or you are willing to spend a lot to make a lot of noise.

     

    MC: It depends on what my expertise would be, right? I mean, I always tell people to  focus on what you know. And if you don't know, just put it in an SPX cheap fund, right? And maybe, now, I might say, OK, put 5% in Bitcoin or Ethereum, just red or black, right? Because it's like artwork, but it has –

     

    KB: A finite amount of artwork.

     

    MC: There's a finite amount of artwork, right, or baseball cards. But yeah, I would just tell people an SPX fund. Because I think the job of America is still business. And I think, whatever benefits will come from AI or whatever, is going to–

     

    KB: Filter into –

     

    MC: Yeah. And I think the FANG stock's are going to crush them. My biggest public holding is Amazon.

    …Before the conversation turned to ICOs. Cuban insists ICOs are “an opportunity” though he says he avoids the “speculative” side of the market….which is confusing because the market is a massively speculative bubble where products are rare and “pitches” are legion.

    KB: And then, when you move into ICOs, how do you think about ICOs? You mentioned
    to me, it's a seat license.

     

    MC: Yeah. That's exactly right. ICO tokens really are an opportunity – there's two there's two different ways to look at ICOs, right – one, as a quote unquote, "investment vehicle," which I don't, right? Again, that's just a scarcity play. It's like it's like an IPO in some respects. It's just, if the float is small, and you can convince enough people on the road show to buy, it's going up, right?

    In summary, Cuban is categorically bullish about AI and ICOs, which is unsurprising. After all, he’s a tech guy who made his fortune selling broadcast.com to Yahoo in what turned out to be an ill-fated acquisition for the once-mighty internet giant. Still, if one has billions of dollars to invest in projects based on their purported “impact”, so-called “opportunities” in the ICO market are never in short supply.

  • Scientists Look For A Cure For Politically Undesirable Behavior

    Via GEFIRA,

    The ‘Free World’ has taken on where the Soviet scientists and psychiatrists left off.

    German and American scientists of renowned Universities in Bonn and Lübeck do research on treatment for politically undesirable behaviour like their Soviet colleagues from the infamous Serbsky Central Research Institute in Moscow. In the Soviet Union people who protested the system had to undergo psychiatric treatment.

    Vladimir Bukovsky, a world-known dissident survived one and described it. The same will be the fate of the so called Free World’s citizens if they fail to conform to the idea of a multi-cultural society. The powers that be have given a signal, and obliging, complaisant scientists are already busy working on bettering our collective and individual psyche. Apart from homophobia and Islamophobia, xenophobia is another psychiatric condition that needs to undergo therapy…hormonal therapy.

    Throughout history, the world has been torn by two opposing factors that face each other with daggers drawn. These are natural biological, and unnatural forces, or reality and dystopia. It is natural for a human being to want to possess things and work as little as possible; to counter it, dystopian socialists, communists or Christian heretics came up with an idea of a society governed by the principle: From each according to his ability, to each according to his needs.

    It was supposed to work. And it failed miserably everywhere it was installed and implemented, from Cuba to East Germany, to the Soviet Union, to North Korea. 

    The human being, an evolutionary extension of the animal world, is endowed with certain indelible features at the genetic level. Group loyalty and fear of aliens are among them. Man cannot survive alone. Mankind is not a biologically monolithic, homogeneous family. Rather, it is made up of human groups (clans, tribes, nations, races) that as a result of their long development are moving apart from each other. Biology is the basis on which human communities create culture and ultimately civilization, not the other way round.

    Human groups, which have come into being as a result of living separately from each other for ages and so have developed incompatible cultures and religions, compete for resources i.e. for survival. Since man cannot make it through life on his own, he is a part of a group (clan, tribe, nation). In order for the group to function well and safeguard its (and simultaneously its members’ survival success), each group member is equipped with two psychological mechanisms (i) in-group loyalty and (ii) out-group enmity.

    Group members collaborate, and support each other even to the point of sacrificing themselves for the whole. That’s the origin of altruism. Defection to another group means weakening one’s own group and strengthening the alien group, which has always been regarded as the gravest mortal sin: treason. (Dante’s hell has Judas Iscariot in its centre, which is the severest punishment for it). Altruism towards members of the out-group is something between in-group loyalty and defection. Its exuberant instances are technically referred to as pathological altruism.

    The phenomenon can be compared to the rivalry among soccer teams. The team’s (survival) objective is to win the cup. The prize will be shared by all team members. In order to achieve it, each one of them has to cooperate with the others: no cooperation with members of any other, opposing, team is thinkable. A team’s player may want to sacrifice his personal career for another player from the same team by helping him to score as many goals as possible and thus becoming the team’s star, or by fouling the opposite team’s player and thus risk being sent out of the playground (death), thus enhancing the chances of his team’s win, but the same will not make things easier on the playground for any member of the opposing team. Helping members of the other team means lessening the chances for winning the cup (survival) of one’s own team and, ultimately one’s own chances.

    If my well-being and survival depends on that of the group that I am a member of, and, conversely, if my group’s survival is contingent on the cooperation, altruism and self-sacrifice of its members, including me, then in-group loyalty is in high demand whereas out-group (pathological) altruism is detrimental. That’s evolutionary mechanism. That’s game theory. That’s common sense. Everybody knows it. So do social engineers.

    Since social engineers have come up with the idea of building new, multi-racial, multi-national, multi-religious, multi-cultural societies, they have encountered the natural barrier: xenophobia, which is another name for in-group loyalty and out-group avoidance. Xenophobia is a biological mechanism imprinted at the genetic level that carries a survival advantage. It tells an individual to create bonds with members of the same group and be on his guard against aliens. To put it in plain language: xenophobia is practised at the very basic personal level each time parents warn their offspring to be wary of strangers: not to open the door to them, not to trust them. So modern social engineers have a problem. They need to overcome this deeply rooted biological barrier.

    A sign has been given, most probably followed by substantial grants and other financial incentives, and so scientists got down to work to find a cure for xenophobia. One of the research teams included psychologists and psychiatrists from Bonn, Tulsa, and Lübeck scientific institutions. Urged by the increasing globalization and the mass migration of peoples, as they say, the mentioned scientists, who otherwise dutifully recognize the evolutionary advantage of the in-group loyalty/out-group exclusion, nevertheless set themselves a task of demonstrating whether oxytocin can enforce the acceptance of aliens and reduce xenophobic out-group rejection. To this end they devised experiments in which subjects were asked to donate a certain amount of money to people in need, either compatriots or refugees. Before the experiment the subjects were screened for the level of xenophobia. During the experiment the subjects were either allowed to act on their own, or were exposed to peer pressure or were administered oxytocin intranasally. It turned out that (i) refugee-directed donation among the subjects scoring low on xenophobia were significantly increased by oxytocin, whereas (ii) oxytocin alone was not enough in the case of the subjects scoring high on xenophobia: their out-group avoidance (or parochial, as it is patronizingly named, altruism) could only be overcome by the orchestrated operation of oxytocin and peer pressure.

    The conclusions are obvious.

    Citizens of host countries must be forced to accept the influx of aliens whether they like it or not. If they do not comply then, in the name of high-flown ideals of universal brotherhood of men, they will be forced either by peer pressure or by oxytocin or by both.

    Oxytocin suits this purpose very well as this hormone raises the emotional well-being, it so to say oh-so humane. Like Aldous Huxley’s soma in his book Brave New World. The human being with his biologically-driven likes and dislikes is not to be tolerated, he must be changed. By ideological interaction or by chemistry. He must not be left alone. He must accept what he does not like not merely passively. He must be made to like what he previously disliked.

    There was systematic political abuse of psychiatry in the Soviet Union, based on the interpretation of political opposition or dissent as a psychiatric problem. The ‘Free World’ has taken on where the Soviet ‘scientists’ left off.

  • This Chart Warns America's Opioid Crisis Is About To Get Worse

    The simple chart below from the United Nation’s Office on Drugs and Crime beautifully illustrates the next leg up in America’s opioid crisis. 

    If you thought today’s situation was bad – think again. Afghanistan, the world’s largest producer of opium just logged a record crop harvest this year doubling last year’s production. Some how – some way, Afghanistan’s opium will find its way into a neighborhood near you.

    According to VOANEWS,

    Last year, poppies were cultivated on 201,000 hectares, yielding 4,700 tons of opium, up 46 percent from 2015.

     

    Sources told VOA’s Pashto service more than 10,000 tons of opium were produced this year. Opium then can be refined into heroin.

     

    The U.N. Office on Drugs and Crime estimated that opium accounted for some 16 percent of the country’s Gross Domestic Product last year, including more than two-thirds of the entire agricultural sector.

     

    In addition to fueling insecurity, violence and insurgency, the drug production is discouraging private and public investment, a UNODC report said.

    This is a bad sign for President Trump who opted to call the opioid crisis a ‘public emergency’ rather than a full-blown ‘national emergency’.

    Highlights from Trump’s opioid crisis speech: 

    • In 2016, more than two million Americans had an addiction to prescription or illicit opioids.
    • Since 2000, over 300,000 Americans have died from overdoses involving opioids.
    • Drug overdoses are now the leading cause of injury death in the United States, outnumbering both traffic crashes and gun-related deaths.
    • In 2015, there were 52,404 drug overdose deaths — 33,091 of those deaths, almost two-thirds, involved the use of opioids.
    • The situation has only gotten worse, with drug overdose deaths in 2016 expected to exceed 64,000.
    • This represents a rate of 175 deaths a day.

    Visualizing Afghanistan’s opium production verse America’s opioid overdose deaths…Notice the correlation?

    The opioid epidemic ‘getting worse instead of better,’ public health officials warn…

    As President Trump embarks on a twelve-day, five nation Asia tour, we the American people trapped state-side, should batten down the hatches for the next wave of opioids set to flood America’s streets.

    Perhaps, while President Trump is in China, he could talk to the Chinese about fentanyl, otherwise if left ignored – expect synthetic opium in a neighborhood near you.

  • "He's A Pedophile": More Shocking Testimony Of Kevin Spacey's Criminal Sexual Behavior Emerges

    Though Netflix pulled the plug this week on House of Cards after actor Kevin Spacey admitted to sexual assault on a 14-year old, it appears that Spacey's character Frank Underwood – a Machiavellian figure who wielded power by any means possible – may be a truer reflection of Spacey's actual personality and behavior than many in the film industry would care to admit. Yesterday multiple cast and crew members of the now defunct Netflix series came forward to tell CNN that Spacey created a "toxic" atmosphere on set in which his aggressive sexual behavior was something, as one camera assistant said, "everybody saw" – but which few formally complained about for fear that their careers would end. 

    The CNN story was published the same day that yet another man has come forward to say he had a sexual relationship with Kevin Spacey at the age of 14 – which included an attempted rape – while Spacey was an adult working on Broadway. Similar to now substantiated allegations against powerful movie mogul Harvey Weinstein, the floodgate of accusations has now opened against Spacey, and it is likely that more will continue to emerge in the coming weeks. Both embattled figures, who were until very recently among the most powerful in Hollywood, now say they are "seeking treatment" in isolation as accusations are quickly turning into police investigations in different parts of the globe. 


    Kevin Spacey/WireImage via Vulture

    And in the midst of this week's fallout, it's not only Netflix that has quickly dropped Spacey, but the International Academy of Television Arts & Sciences announced that he will not be honored at the 2017 International Emmy Founders Award, having this week revoked his reward. But also like Weinstein, who appears to have assaulted women over a period of multiple decades, Spacey's behavior was apparently known all around Hollywood, to the point that it was referenced in a punchline in a 2005 episode of "The Family Guy".

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    Meanwhile, the testimonies from the House of Cards cast and crew couldn't be more shocking. One detailed account given to CNN from an unnamed former production assistant appears to have taken place in Maryland, near the House of Cards filming location:

    The former production assistant who spoke with CNN said Spacey sexually assaulted him one afternoon when the assistant was assigned to drive to an offsite location to pick up Spacey and bring him to the "House of Cards" set, which is located about 30 miles outside of Baltimore.

     

    The production assistant says that when he and Spacey were just minutes away from the set and while the car was moving, Spacey, who was driving, put his hands down the production assistant's pants. The production assistant told CNN that the touching was nonconsensual.

     

    "I was in a state of shock," he said. "He was a man in a very powerful position on the show and I was someone very low on the totem pole and on the food chain there."

     

    The production assistant asked that what happened next in the car not be described, for fear that it would identify him.

     

    Once they had arrived on set, the production assistant says he helped the actor take his belongings from the car to Spacey's trailer on set. While the two men were in the trailer, the production assistant says, Spacey cornered him, blocked his exit and made inappropriate contact with him.

     

    "I told him, 'I don't think I'm ok with this, I don't think I'm comfortable with this,'" the production assistant said. That's when the actor became "visibly flustered," fled the trailer, got in his car and left for the remainder of the day, according to the production assistant.

    But perhaps just as scandalous is the behavior of the show's supervisors after the man issued a complaint. The production assistant told CNN that a supervisor merely told him to ensure that he's never alone with Spacey on set, after which the sexual harassment stopped long enough for him to slowly feel comfortable driving Spacey to the set once again. "I have no doubt that this type of predatory behavior was routine for him and that my experience was one of many and that Kevin had few if any qualms about exploiting his status and position," and the production assistant continued to tell CNN, "It was a toxic environment for young men who had to interact with him at all in the crew, cast, background actors."

    Other crew members had similar stories of aggressive and unwanted physical touching which came to define the way Spacey interacted with young male employees on the set: "He would put his hands on me in weird ways," one crew member said. "He would come in and massage my shoulders from behind or put his hands around me or touch my stomach sometimes in weird ways that in normal everyday conversation would not be appropriate."

    When asked why the crew member didn't complain to management, he said he feared that his career would be over: "That's the worst part about this whole thing. I would love to be able to speak out about this kind of stuff and not fear." But it seems such fear permeated the environment on set, and made everyone afraid to speak on what might not even be defined as an "open secret" as it appears to have been normalized by a management team which consistently looked the other way for fear of upsetting their powerful and legendary starring actor.

    As yet a further House of Cards crew member told CNN:

    "All the crew members commented on his behavior," the former camera assistant said. "What gets me is we have to sign sexual harassment paperwork before the start of the show and apparently [Kevin Spacey] doesn't have to do anything and he gets away scott-free with this behavior." CNN confirmed that Spacey was given guidelines regarding sexual harassment in the workplace.

     

    Colleagues never complained because they were afraid of losing their jobs, the former camera assistant said.

     

    "Who is going to believe crew members?" he said. "You're going to get fired."

    According to one female employee Spacey couched his behavior in terms of "games" and "play fights" which would routinely take place with young males and would be quite out in the open. "It was very known that Kevin was inappropriate, and males I worked with complained to me about how they felt uncomfortable," she told CNN. "Kevin does this thing which was play fights with them in order to touch them," which specifically involved him approaching "multiple people" to "say hello, greet them, shake their hand and pull their hand down to his crotch and touch their crotch. I have friends say he reached up their shorts on set."

    In response to the allegations of Netflix management turning a blind eye while essentially giving Spacey free reign, Netflix issued the following statement

    "Netflix was just made aware of one incident, five years ago, that we were informed was resolved swiftly. On Tuesday, in collaboration with MRC [Media Rights Capital, which produces the series], we suspended production, knowing that Kevin Spacey wasn't scheduled to work until Wednesday. Netflix is not aware of any other incidents involving Kevin Spacey on-set. We continue to collaborate with MRC and other production partners to maintain a safe and respectful working environment. We will continue to work with MRC during this hiatus time to evaluate our path forward as it relates to the production, and have nothing further to share at this time."

    MRC also told CNN in a separate statement that they have implemented "an anonymous complaint hotline, crisis counselors, and sexual harassment legal advisors for the crew" – though clearly it seems all too little too late. 

    On the other side of Atlantic in the UK, multiple employees and cast members of the Old Vic theater in London, where Spacey was artistic director from 2004-2015, have similarly come forward with multiple allegations – this to the point that the Old Vic has announced its own confidential complaints process for any victims. 

    Meanwhile, another man has come forward with chilling details involving Kevin Spacey's early career on Broadway when the actor was in his 20's living in New York City. He told Vulture in a bombshell interview published the same day as the CNN investigation that Spacey "groomed" him while a minor at the age of 14 for a sexual relationship after the two met at a youth acting workshop that Spacey led. 

    The full interview contains lengthy and shocking lurid details of the victim's account, and concludes with the following bombshell assertions of the victim: 

    I would call him a pedophile and a sexual predator. When I turned 25, I looked at every 14-year-old boy I could see, to try to understand what those men had seen, because I still on some level thought I had been a tiny adult…

     

    He is a pedophile. When you look at his statement, you realize also he’s profoundly narcissistic. He thinks this is about being caught that he’s gay. And then he is spinning it, right? “Oh, people like gays now. So I’ll throw them that. I’ll say I’m gay and I will betray my whole community and do something else that conflates pedophilia with male homosexuality.” That’s great. Thank you for that. And that was probably the thing that made me want to talk more than anything else. How repulsive that was.

    During the time period, the victim who remains unnamed for fears over his safety (though Vulture says it thoroughly collaborated multiple aspects to the story), says that he fled Spacey's apartment after the then 24-year old Broadway actor tried to rape him.

    Meanwhile, when it comes to legal terms and the question of whether a formal investigation against Kevin Spacey can take place, though some states don't have a statute of limitations on child sexual assault crimes, New York's is one of the least favorable toward victims in the country (both Anthony Rapp – the first to come forward, and the latest victim who spoke to Vulture – appear far beyond the NY statute of limitations for filing criminal charges).

    However, the latest revelations from House of Cards crew members were obviously more recent in time, and thus are subject to formal police investigation and prosecution. And though we can image that any average citizen would certainly be aggressively pursued by criminal prosecutors, it remains to be seen if Hollywood's celebrity elite will be held to the same standards.

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Today’s News 3rd November 2017

  • The Intrigue At The Heart Of The Beijing-Riyadh-Washington Triangle

    Authored by Valentin Katasonov via The Strategic Culture Foundation,

    Saudi Aramco (the Saudi Arabian Oil Company) is the world’s largest petroleum business. It owns more than 100 oil and gas fields in Saudi Arabia with reserves of at least 264 billion barrels of oil, which is estimated to be approximately one-fourth of the world’s known reserves of this raw material. The company’s production figures do not give the full picture, as data exists only for a few years. But as an example, in 2013 Saudi Aramco produced 3.4 billion barrels of crude oil. Analysts calculate that every year the Saudi company extracts about twice as much oil and gas, in terms of barrels of oil equivalent, as the largest US company ExxonMobil. Interestingly, Saudi Aramco never appears in the rankings of the world’s largest oil producers, since it does not publish financial information such as profit, sales, assets, or market capitalization. Therefore America’s ExxonMobil and Chevron, China’s Sinopec and PetroChina, the Anglo-Dutch company Royal Dutch Shell, Great Britain’s BP, and France’s Total top the rankings. But everyone knows perfectly well that these leaders in the global oil industry are mere dwarfs compared to Saudi Aramco.

    Saudi Aramco’s management set off a real bomb in early 2016 when they announced their plans to privatize part of the company through a stock market IPO. The proposal was to sell shares in Saudi Aramco equal to about 5% of the company. But an estimate of the company’s potential market price is needed in order to understand how much this would be in absolute terms. Almost the next day after the announcement of the potential sale of part of the company (in January 2016), the global media published a stunning evaluation by the independent oil analyst Mohammad Al Sabban, a former senior adviser to the Saudi Arabian oil ministry. He estimated the company’s worth at $10,000,000,000,000 (ten trillion USD). For comparison I should add that in 2016 the largest US oil company, ExxonMobil, barely exceeded $350 billion in share capital. And yes, It’s true that later on some of the hype in the assessments died down and more rational numbers were cited, most often $2 trillion. This meant that Saudi Arabia would be able to rake in approximately $100 billion from the sale of 5% of the company. But the company’s biggest trump card isn’t even the current record levels of oil production, but rather the reserves of hydrocarbon raw materials at Saudi Aramco’s disposal. And that’s a number that none of the companies named in the rankings of the global oil industry can even begin to approach.

    At present, Riyadh adjusts and verifies the data on the hydrocarbon reserves in the fields owned by Saudi Aramco. Financial reports are painstakingly drafted in the needed formats for a public offering of shares. The company is being restructured to optimize the way it is organized and managed. And finally, a crucial step was taken to lower the taxes on the company’s profits. The traditional tax rate has been 90%, but this year it was set at 50%, which roughly corresponds to the level at which the leading Western oil companies are taxed. Lowering the tax rate raises dividends and makes the company a more attractive target for investment.

    But beginning in early 2017, the estimates of Saudi Aramco’s market value have unexpectedly begun to decline. Appraisals began to surface that claimed the company’s share capital was only worth $1.5 trillion, then $1 trillion. The consulting firm Wood Mackenzie estimated Saudi Aramco’s worth at $400 billion overall, bringing it closer to US-based ExxonMobil. And suddenly Western consultants began talking about the need to “discount” the value of the Saudi company, since it is state-owned, and in the securities markets all government issues are by convention sold “at a discount.” They point out that although Saudi Aramco currently pays 50% of its profits in taxes, since the government owns the company anyway it could restore the 90% tax rate tomorrow with a simple stroke of the pen. There is also the fear that oil prices could be low for the next few years, and Saudi Aramco might not be able to generate big profits. But none of that can remotely explain why the valuations of the Saudi company have dropped so precipitously in the past year.

    Analysts blame this on the pressure Washington is putting on Riyadh, for reasons that have as much to do with the currency market as the oil market. And the pressure coming from Washington is, in turn, a response to the pressure also being exerted on Riyadh by China, which wants to buy oil from Saudi Aramco in renminbi instead of dollars. China is currently the world’s biggest oil importer, knocking the US out of its former first-place position. China is also the Saudi oil industry’s biggest customer, and Beijing does not want to pay extra for that black gold using American currency. A number of oil exporters that sell to China have already partially or entirely transitioned to settling their accounts in renminbi. Topping that list are Nigeria and Iran. Russia has also recently begun to sell some oil to China for renminbi (although only small percentage as yet).

    Saudi Arabia, however, is heavily dependent on the US and has thus far refused to settle its accounts in renminbi. And that rebuff is costing the country dearly: Beijing is gradually finding other suppliers to take Riyadh’s place. The Saudis used to be China’s biggest foreign supplier of oil, but recently Russia has squeezed them out for that number-one spot. If this continues, Saudi Aramco might lose its Chinese market altogether.

    Riyadh now finds itself caught between a rock and a hard place. It’s hard to imagine what Saudi Arabia could be hit with from across the Atlantic, should it sell even one barrel of oil for Chinese currency. After all, that would be a direct challenge to the petrodollar, which was born right there in Saudi Arabia in the 1970s, midwifed by the negotiations between Henry Kissinger and King Faisal.

    Washington has sternly warned Riyadh to refrain from any ill-considered move to replace the dollar with the renminbi in its transactions with China, lest other players in the oil market follow suit (oil might then be traded for rubles, rupees, rials, etc.) And tomorrow that epidemic of transitioning to national currencies could infect other commodity markets. Incidentally, this year Beijing will begin to trade oil futures priced in renminbi on its commodity exchanges and claims that this is only the first step.

    Voices have already been heard within the US president’s entourage that suggest blocking the listing of Saudi Aramco shares on the New York Stock Exchange. Signs have emerged of an organized campaign to short-sell the Saudi oil company. In light of that development, Riyadh has announced that it will put off its share listing until a later date. But its problem isn’t going to go away – Saudi Arabia will still have to make a choice between the dollar and the renminbi.

    Although Beijing is upping its pressure on Riyadh, it is also simultaneously offering to directly buy out 5% of Saudi Aramco, while allowing the Saudis to forgo the usual ritual of listing shares on Western stock markets. And China is prepared to shell out a “fair” price (about $100 billion). The Chinese government has already announced that it is forming a consortium of energy and finance companies, plus China’s sovereign wealth fund, in order to purchase a “chunk” of the Saudi company. The Chinese media reports that that consortium is ready to become a cornerstone investor in Saudi Aramco.

    Beijing’s winning move in its chess game against Washington has neutralized the US threat to disrupt the sale of Saudi Aramco, while simultaneously pushing Riyadh toward a decision to transition Saudi oil sales to the renminbi.

    And so the plot thickens inside the Beijing-Riyadh-Washington triangle of intrigue.

  • Visualizing How Billionaire Investors Hedge Against Geopolitical Black Swans

    Investors must always be comfortable with the idea that the market bears risk.

    Sometimes this risk flies under the radar and isn’t as pronounced as it probably should be. However, as Visual Capitalists's Jeff Desjardins notes, in other cases, the topic of risk can catapult to the forefront of discussion. There can be specific events or signals unfolding that give investors the jitters – and during these times, investors will make adjustments to their portfolios to avoid getting caught off guard.

    HOW BILLIONAIRES ARE HEDGING

    In the following infographic from Sprott Physical Bullion Trusts, we explain the particular geopolitical risks that have the world’s most elite investors concerned today – and what moves they are making to protect themselves from black swans.

    Courtesy of: Visual Capitalist

    The world isn’t predictable at the best of times – but after unanticipated occurrences such as Brexit and the election of Trump in 2016, the geopolitical tea leaves are getting even more difficult to read.

    The world is approaching a major inflection point and the intense amount of global angst we’re experiencing now stems from deep, structural forces that have been building over decades.

    – Reva Goujon, VP Global Analysis of Stratfor

    According to Reva Goujon, VP Global Analysis of Stratfor, we are experiencing the perfect storm of “-isms”: nationalism, nativism, protectionism, and isolationism.

    As a result, the following potential geopolitical risks are at the top of the agenda for experts and top investors:

    Domestic risks:
    Unpredictability of the Trump administration, government inaction, a trade war with China, and NAFTA renegotiations

     

    International risks:
    Economic nationalism, further “exits” from the EU, Russia and China seeking to assert authority, terrorism, escalation of Middle East conflicts, and North Korea’s nuclear ambitions

    ELITE INVESTORS TAKING ACTION

    With these risks perceived to be on the table, some of the world’s most elite investors like Ray Dalio and Warren Buffett are taking action. Here’s what they are up to:

    Ray Dalio

    Ray Dalio, the founder of the world’s largest hedge fund, Bridgewater Associates, had this to say:

    When it comes to assessing political matters we are very humble.

    -Ray Dalio, Aug 2017

    Dalio’s advice: to stay liquid, stay diversified, and not be overly exposed to any particular economic outcomes. He also recommends a 5%-10% position in gold.

    Warren Buffett

    The Oracle of Omaha has a similar but very different perspective.

    No one can tell you when these traumas will occur – not me, not Charlie, not economists, not the media.

    – Warren Buffett, Feb 2017

    With this in mind and with equities expensive, the seasoned value investor holds onto piles of cash to prepare for potential buying opportunities. Berkshire Hathaway now has $99.7 billion in undeployed cash, the most in the company’s history.

    Bill Ackman

    Billionaire hedge fund manager Bill Ackman took a position in “out of the money” call options on the VIX.

    This will protect against stock market risk.

    – Bill Ackman, Aug 2017

    David Einhorn

    The billionaire founder of Greenlight Capital says he is keeping gold as a top position.

    The (Trump) administration comes with a high degree of uncertainty.

    – David Einhorn, Feb 2017

    Howard Marks

    Lastly, the famous value investor Howard Marks warned his clients to move into lower-risk investments to protect against future losses.

    The uncertainties are unusual in terms of number, scale and insolubility in areas including secular economic growth; the impact of central banks; interest rates and inflation; political dysfunction; geopolitical trouble spots; and the long-term impact of technology.

    – Howard Marks, July 2017

     

  • Sorting Out The Russia Mess

    Authored by Robert Parry via ConsortiumNews.com,

    The U.S. mainstream media finally has its 'smoking gun' on Russia-gate – incriminating information from a junior Trump campaign adviser – but a closer look reveals serious problems with the 'evidence'…

    Tomb of the Unknown Soldier outside the Kremlin wall, Dec. 6, 2016. (Photo by Robert Parry)

    Russia-gate special prosecutor Robert Mueller has turned up the heat on President Trump with the indictment of Trump’s former campaign manager for unrelated financial crimes and the disclosure of a guilty plea from a low-level foreign policy adviser for lying to the FBI.

    While longtime Republican fixer Paul Manafort, who helped guide Trump’s campaign to the GOP nomination in summer 2016, was the big name in the news on Monday, the mainstream media focused more on court documents related to George Papadopoulos, a 30-year-old campaign aide who claims to have heard about Russia possessing Hillary Clinton’s emails before they became public on the Internet, mostly via WikiLeaks.

    While that would seem to bolster the Russia-gate narrative – that Russian intelligence “hacked” Democratic emails and President Vladimir Putin ordered the emails be made public to undermine Clinton’s campaign – the evidentiary thread that runs through Papadopoulos’s account remains tenuous.

    That’s in part because his credibility has already been undermined by his guilty plea for lying to the FBI and by the fact that he now has a motive to provide something the prosecutors might want in exchange for leniency. Plus, there is the hearsay and contested quality of Papadopoulos’s supposed information, some of which already has turned out to be false.

    According to the court documents, Papadopoulos got to know a professor of international relations who claimed to have “substantial connections with Russian government officials,” with the professor identified in press reports as Joseph Mifsud, a little-known academic associated with the University of Stirling in Scotland.

    The first contact supposedly occurred in mid-March 2016 in Italy, with a second meeting in London on March 24 when the professor purportedly introduced Papadopoulos to a Russian woman whom the young campaign aide believed to be Putin’s niece, an assertion that Mueller’s investigators determined wasn’t true.

    Trump, who then was under pressure for not having a foreign policy team, included Papadopoulos as part of a list drawn up to fill that gap, and Papadopoulos participated in a campaign meeting on March 31 in Washington at which he suggested a meeting between Trump and Putin, a prospect that other senior aides reportedly slapped down.

    The ‘Email’ Breakfast

    But Papadopoulos continued his outreach to Russia, according to the court documents, which depict the most explosive meeting as an April 26 breakfast in London with the professor (Mifsud) supposedly saying he had been in Moscow and “learned that the Russians had obtained ‘dirt’ on then-candidate Clinton” and possessed “thousands of emails.” Mainstream press accounts concluded that Mifsud must have been referring to the later-released emails.

    Former Trump foreign policy adviser George Papadopoulos.

    However, Mifsud told The Washington Post in an email last August that he had “absolutely no contact with the Russian government” and described his ties to Russia as strictly in academic fields.

    In an interview with the U.K. Daily Telegraph after Monday’s disclosures, Mifsud acknowledged meeting with Papadopoulos but disputed the contents of the conversations as cited in the court papers. Specifically, he denied knowing anything about emails containing “dirt” on Clinton and called the claim that he introduced Papadopoulos to a “female Russian national” as a “laughingstock.”

    According to the Telegraph interview, Mifsud said he tried to put Papadopoulos in touch with experts on the European Union and introduced him to the director of a Russian think tank, the Russian International Affairs Council.

    It was the latter contact that the court papers presumably referred to in saying that on May 4, the Russian contact with ties to the foreign ministry wrote to Papadopoulos and Mifsud, reporting that ministry officials were “open for cooperation,” a message that Papadopoulos forwarded to a senior campaign official, asking whether the contacts were “something we want to move forward with.”

    However, even an article in The New York Times, which has aggressively pushed the Russia-gate “scandal” from the beginning, noted the evidentiary holes that followed from that point.

    The Times’ Scott Shane wrote: “A crucial detail is still missing: Whether and when Mr. Papadopoulos told senior Trump campaign officials about Russia’s possession of hacked emails. And it appears that the young aide’s quest for a deeper connection with Russian officials, while he aggressively pursued it, led nowhere.”

    Shane added, “the court documents describe in detail how Mr. Papadopoulos continued to report to senior campaign officials on his efforts to arrange meetings with Russian officials, … the documents do not say explicitly whether, and to whom, he passed on his most explosive discovery – that the Russians had what they considered compromising emails on Mr. Trump’s opponent.

    “J.D. Gordon, a former Pentagon official who worked for the Trump campaign as a national security adviser and helped arrange the March 31 foreign policy meeting, said he had known nothing about Mr. Papadopoulos’ discovery that Russia had obtained Democratic emails or of his prolonged pursuit of meetings with Russians.”

    Reasons to Doubt

    If prosecutor Mueller had direct evidence that Papadopoulos had informed the Trump campaign about the Clinton emails, you would assume that the proof would have been included in Monday’s disclosures. Further, since Papadopoulos was flooding the campaign with news about his Russian outreach, you might have expected that he would say something about how helpful the Russians had been in publicizing the Democratic emails.

    Hillary Clinton at the Code 2017 conference on May 31, 2017.

    The absence of supporting evidence that Papadopoulos conveyed his hot news on the emails to campaign officials and Mifsud’s insistence that he knew nothing about the emails would normally raise serious questions about Papadopoulos’s credibility on this most crucial point.

    At least for now, those gaps represent major holes in the storyline. But Official Washington has been so desperate for “proof” about the alleged Russian “election meddling” for so long, that professional skepticism has been unwelcome in most media outlets.

    There is also another side of the story that rarely gets mentioned in the U.S. mainstream media: that WikiLeaks founder Julian Assange has repeatedly denied that he received the two batches of purloined Democratic emails – one about the Democratic National Committee and one about Clinton’s campaign chairman John Podesta – from the Russians. While it is surely possible that the Russians might have used cutouts to pass on the emails, Assange and associates have suggested that at least the DNC emails came from a disgruntled insider.

    Also, former U.S. intelligence experts have questioned whether at least one batch of disclosed emails could have come from an overseas “hack” because the rapid download speed is more typical of copying files locally onto a memory stick or thumb drive.

    What I was told by an intelligence source several months ago was that Russian intelligence did engage in hacking efforts to uncover sensitive information, much as U.S. and other nations’ intelligence services do, and that Democratic targets were included in the Russian effort.

    But the source said the more perplexing question was whether the Kremlin then ordered release of the data, something that Russian intelligence is usually loath to do and something that in this case would have risked retaliation from the expected winner of the 2016 election, Hillary Clinton.

    But such questions and doubts are clearly not welcome in the U.S. mainstream media, most of which has embraced Mueller’s acceptance of Papadopoulos’s story as the long-awaited “smoking gun” of Russia-gate.

  • Anbang? Evergrande? Or Does HNA's Bond Sale Mark The Beginning Of China's Minsky Moment?

    We know… there are several candidates to choose from. For example…

    It might be Anbang – the acquisitive insurance behemoth – see “Anbang Just Became A ‘Systemic Risk’: Revenues Crash As Its Chairman Is “Detained”

    It might be China Evergrande – the developer of “ghost” properties and described by J Capital’s, Anne Stevenson-Yang as “the biggest pyramid scheme the world has yet seen” – see “Stevenson-Yang Warns ‘China Is About To Hit A Wall”.

    Or…it might be HNA. The highly-leveraged Chinese conglomerate, which has been on an overseas acquisition binge, is paying more for a 363-day dollar loan than serial defaulter, Argentina, paid on a 100-year loan earlier this year.

    HNA has $28bn of short-term debt coming due before the end of June 2018, most of which has been accumulated during the last two years. As Bloomberg reports, HNA Group Co., which once symbolized China’s insatiable appetite for overseas assets, is offering to sell the country’s most expensive short-term dollar bond ever as it tries to refinance a wall of maturing debt amid government scrutiny. The company is marketing a 363-day bond at nine percent which is expected to price Thursday to refinance offshore debt, according to a person familiar with the offering, who isn’t authorized to speak publicly and asked not to be identified. The previous record was Herun Holdings Ltd.’s eight percent notes sold in September…

    See the interview on the HNA bond offering with Bloomberg’s Lianting Tu.

    Like Anbang, HNA has over-extended itself buying overseas assets as Bloomberg explains…

    The sale is the latest indication that HNA’s $40-billion-plus acquisition spree since last year, where it became the largest shareholder in companies such as Deutsche Bank AG and Hilton Worldwide Holdings Inc., is catching up to the company as it accumulated about $28 billion in short-term debt. HNA’s interest expenses doubled in the first half, when it paid more than any other non-financial company outside of the U.S. and Brazil, according to data compiled by Bloomberg.

     

    "Nine percent is really high for one year," said Warut Promboon, managing partner at credit research firm Bondcritic. "Basically, it tells you that the worry is real." 

    As we discussed in our July piece "It Feels Like An Avalanche": China's Crackdown On Conglomerates Has Sent A "Shock Wave" Across Markets”, HNA is suffering from the backlash of an insanely out-of-control acquisition strategy and a crackdown by the Chinese Government’s on outbound investment (A.K.A. DOLLAR FUNDING SHORTAGE) and corruption. Beginning with Anbang, the authorities have targeted each of the “famous four” Chinese conglomerates, the other three being HNA, Dalian Wanda Group and Fosun International.

    By issuing offshore (dollar) bonds with less than a year to maturity, HNA has found a way to circumvent the government’s restrictions on outbound investment – although this is probably not what officials had in mind. Bloomberg explains…

    Bonds due in a year or less, which do not need government approvals, started to appear earlier this year after the National Development and Reform Commission started withholding approvals for offshore debt for some sectors.

     

    A representative of HNA couldn’t immediately comment. HNA was among conglomerates that spearheaded the record $246 billion in outbound acquisitions announced by Chinese companies last year, according to data compiled by Bloomberg. Then the government began restricting capital outflows to protect the yuan from depreciating further.

    Delving into HNA’s metrics, Bloomberg finds that HNA’s interest costs exceed EBIT at the group level, while its subsidiaries rush to refinance existing debt.

    Now, costs are piling up. HNA’s interest expenses more than doubled to a record 15.6 billion yuan as of the end of June, exceeding the company’s earnings before interest and taxes. Its short-term debt ballooned to 185.2 billion yuan, exceeding its cash-pile. The bond offering comes days after HNA’s flagship carrier, Hainan Airlines Holding Co., sold a $300 million 364-day dollar note at a yield of 6.35 percent, higher than the 5.5 percent it offered for a short-term note in June. The carrier has applied for an offshore bond issuance quota from the NDRC, according to people familiar with the matter last Thursday. A unit of HNA is also seeking a loan of about HK$6.4 billion ($820 million) to help refinance borrowings related to a land purchase in the former Kai Tak airport area in Hong Kong.

    In “Hainan’s Bottomless Credit” from 20 April 2016, Bloomberg expressed disquiet about HNA’s financial position – and its borrowing costs have risen as the current bond issue clearly shows. As Bloomberg lamented…

    None of this necessarily matters as long as HNA has the earnings and liquidity to meet its debt payments promptly, and the operating performance to deliver rising profits. Things don't look too hot on that front, though.

     

    Take a look at HNA's quick ratio and interest cover, which gauge its ability to meet short-term liabilities and pay its interest out of income. Both are around or below their respective safety levels of 1 and 1.5 times. Return on assets hasn't cracked above 1 percent throughout the period, suggesting the group would have been better off sticking its money in the bank. HNA's performance metrics leave a lot to be desired…

    In another piece, “A Reverse Rollup From Hell’: China's ‘Boldest Dealmaker’ Faces Margin Call Disintegration” this July, we questioned whether HNA’s practice of pledging its own shares and those of its investments would eventually lead to a catastrophic margin call. From our post.

    …while most Chinese companies pledged "only" their own shares to get loans, a handful of companies also used shares of the acquired companies as pledged collateral. This is precisely what HNA Group did, which now faces not only growing regulatory scrutiny from Beijing that threatens to spook bond investors and raise HNA’s financing costs, but also send its shares plunging as holders are forced to liquidate even as most of the shares pledged to fund its buying spree are already declining, accelerating its demise. And, in a scenario that can only be dubbed as a "reverse rollup from hell" – on steroids and margin – one that would make even Valeant blush and snicker, if the value of its collateral, i.e. stock price, falls enough, HNA will soon be forced to sell its holdings to repay debt, thereby resulting in the disintegration of the company.

    HNA is a private company and, although a breakdown of its share pledges is not available, Bloomberg compiled a detailed look at its exposure (see below) and concluded…

    HNA and its units have pledged at least $24 billion of shares across 15 publicly traded firms, including the Hilton and Deutsche Bank stakes, filings show. HNA-related entities also have pledged billions more of unlisted assets that include shares of holding companies, land-use rights, planes, a golf resort and $289,000 of corporate vehicles. Shareholders pledged a 17 percent stake in the group’s closely held parent, according to government filings obtained by Bloomberg that document the pledges.

    We have two questions:

    • Does paying a 9% yield on a 1-year note signal that HNA is getting close to the catastrophic margin call we alluded to 3-4 months ago?
    • If so, is this what PBoC Governor, Zhou Xiaochuan, was concerned about when he said at the recent Party Congress “If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction, what we call a ‘Minsky Moment”? 

  • How The DPRK Riddle Is Freaking Out The US Establishment

    Authored by Pepe Escobar via The Saker blog,

    The 19th Party Congress has made it very clear that “socialism with Chinese characteristics” – as codified by President Xi Jinping – is China’s road map ahead. Not only does the strategy graphically eschew those much-lauded “Western values”; it will, in Xi’s own words, offer “a new option for other countries and nations who want to speed up their development while preserving their independence.”

    Xinhua even dared to venture, “the 21st century is likely to see capitalism lose its appeal while the socialist movement, led by China, rapidly catches up”.

    To say this won’t go down very well in the West, especially in the US, may be the understatement of the centuryeven considering that the Chinese system is more like “neoliberalism with Chinese characteristics.”

    It’s enlightening to crisscross what happened in Beijing with what was happening in Washington on the eve of President Trump’s trip to Asia, when he will visit China but also Japan, South Korea, Vietnam and the Philippines. Discussion of virtually all the key issues in Asia-Pacific will be on the table.

    Asia-Pacific is where the real action is – geopolitically and geoeconomically. And once again, the number one issue in the intractability stakes will be the DPRK.

    At a recent meeting with top US military and intelligence chiefs Trump, referring to the DPRK, asked to be provided “with a broad range of military options, when needed, at a much faster pace.”

    For his part, Pentagon head Mattis has emphasized that “the US army must stand ready.” He has been extolling his targeted military audience to read T.R. Fehrenbach’s This Kind of War – a history of the 1950-1953 Korean War, and even extracting a chilling quote from it; “You may fly over a nation forever, you may bomb it, atomize it, pulverize it and wipe it clean of life. But if you desire to defend it… you must do this on the ground the way the Roman legions did: by putting your young men in the mud.”

    Yet the real story regarding the Trump meeting is what was taking place behind the scenes involving key business/economic decision makers – call them some of the Masters of the Universe – as revealed to me by a high-level intel source privy to these meetings.

    The conclusions of the debate were then presented directly to Trump, ahead of his visit to Asia.

    The Sudetenland revival

    The source stressed how principals in these meetings were familiar with “key strategists above Mattis who were responsible for most of the major US defense programs in place.”

     They know, for instance, how “we are four generations behind in defensive missiles which seals the Russian airspace” – even though any expert in US Think Tankland persists in total denial.

    The number one concern is about “the present satellite and missile capacity of North Korea to detonate nuclear bombs over the US knocking out the entire electronic infrastructure through an electromagnetic impulse (EMP) attack liquidating 90% of the American population within a year. This concurs with public statements by Putin that tiny countries in the future can obtain the capacity to destroy superpowers.”

    Putin’s comment should be interpreted as this possible DPRK threat being capable of affecting a very advanced nation much more than those in the Global South; a completely different dimension compared to the former MAD concept of mutually assured (nuclear) destruction.

    In his own presentation to Trump, Mattis emphasized the EMP “as a potential horror beyond imagination. Within 24 hours Walmart shelves would have nothing on them.  Food distribution would grind to a halt. Food riots all over the US would take place. 80% of the population would perish according to Mattis.”

    The debate then moved to whether the DPRK already possesses submarine-launched ballistic missiles (SLBMs). According to Heritage’s Bruce Klingner, the DPRK has twenty Romeo class submarines capable of carrying SBLMs (their range is 9,000 miles; the distance from Pyongyang to New York City is 6,783 miles). True, they are old, built in the 1950s. The question is open on how far advanced the DPRK is in miniaturization.

    The debate considered the possibility the EMP threat was “a leak from Mattis to justify war tension, or it so should be interpreted by China and Russia. Mattis said the US would lose 80% of their population based on Pentagon studies, though they did not go that far. Mattis has no strategic sense at all and should be no more than a minor Marine functionary as his ability is very limited.

    Regardless of Mattis’s judgement, the principals agreed that the highest concern is the miniaturization of a hydrogen bomb set off via satellite as an EMP attack – even though that would not be very high above the earth and could, in theory, be knocked out by US ground missiles.

    What was interesting is that this possible DPRK threat invoked the specter of the Sudetenland.

    “The Sudetenland analogy was one of the principals’ way of expressing that WWIII has already started”, according to the source.

     

    “My interpretation was that he was referring to actions of North Korea, and actions in Syria and Ukraine. Those were his words, not mine. You could say Russia occupied Crimea or exerts its influence over Donbass. Or has displaced the US in Iraq and Syria. The main point is that Russia and China are starting to roll back US influence. So the North Korea threat is also part of Sudetenland.”

    What’s clear is that the DPRK drama is further straining US alliances, and not only in Northwest Asia.

    According to the source, a lot of this has to do with a wide perception that US weaponry does not measure up to the Russians and Chinese. And that US interests such as stopping North Korea from reaching the US overrides US considerations of its allies. These alliance structures are falling apart out of sight of the public.”

    In a nutshell, this behind the scenes debate does show how alarmed is the US establishment. It’s unclear what Trump will make of its conclusions as he gets ready to hit the Asia trail.

    Wang Yang to the rescue?

    The ultimate question for the US establishment is how to find some sort of balance in breaking up the Eurasian landmass from the long-term China-Russia strategic partnership embrace. Tactics include mixing a push to resurrect Pilsudski’s http://hungarianspectrum.org/2017/06/29/the-three-seas-initiative-and-donald-trump/

    Intermarium Plan against Russia with countering China by seeking to ally India, Taiwan, Japan and South Korea. This is by now classic Cold War 2.0 – but this time around with China and Russia massively stronger than the alliances attempted against them, and on top of it constituted as a Eurasian peer-competitor strategic partnership.

    Progressive alienation, simultaneously, of China, Russia and Germany (for instance, via US Congress sanctions on German companies over Nord Stream Two), is not only a de facto act of strategic insanity.; this will end up forcing the trio into a solid, long-term realignment in which Washington will be completely alienated from the entire Eurasian landmass to the benefit of the Belt and Road Initiative (BRI) and its spin-offs.

    In their upcoming meeting in Beijing, a plausible scenario is Xi suggesting Trump the possibility of a deal with Kim Jong-un – eventually leading to de facto ending of the Korean War (instead of the current armistice). The process would include multilateral security guarantees (by the US, and endorsed/supervised by Russia and China) and a US no-sanction commitment towards some sort of economic opening if the DPRK freezes for good the testing of nuclear weapons and ICBMs. Xi would be a sort of guarantor of the DPRK. The question is whether Pyongyang would accept it.

    In realpolitik terms there’s not much the Trump administration can do about the DPRK, except work through Beijing and Moscow to defuse the crisis. Some action is underway via the so-called “New York channel”, with Joseph Yun, US negotiator for North Korea, talking to diplomats at the DPRK mission to the UN. A potential, unilateral US attack on the DPRK could trigger the very World War destruction it’s supposed to halt, as China has made it quite clear.

    So all eyes, once again, are on China. Apart from Xi, the man to watch with the emergence of the new 7-member Politburo Standing Committee is Wang Yang – the number four in the hierarchy who now becomes executive vice-premier.

    Wang is the former party chief in both Chongqing and Guangdong, and previously vice-premier in charge of agriculture and foreign trade. He’s the top Chinese official dealing with Washington on economy and trade – and may now have his work cut out for him; to convince Team Trump, via Chinese diplomacy, that to do business with the DPRK is actually a good deal.

    That certainly beats the specter of an EMP inferno.

  • Don't Mention Madoff: JP Morgan Whistleblower Not Fired For Whistleblowing (Allegedly) In Third Trial

    Here we go again, the third trial, following two appeals, in which former JP Morgan Wealth Manager, Jessica Sharkey, claims she was unfairly dismissed after whistleblowing on one of the bank’s clients shortly after the Bernie Madoff scandal came to light.

    The client in question, an Israeli with involvement in the diamond cutting and pre-paid calling card businesses, was a “big fish”, was generating about $600,000 of revenue annually for the bank.

    Sharkey had alleged that the client’s multiple bank accounts and failure to provide sufficient information to satisfy “Know Your Customer” requirements led her to conclude that the bank’s relationship with the client should be terminated.

    It was clear from recent filings that Sharkey wanted to highlight the contemporaneous nature of her dismissal and Madoff’s arrest. However, Judge Cote said "There will be no discussion of Bernie Madoff at this trial," in a pretrial hearing. Cote argued it could unfairly prejudice jurors against the bank. JPMorgan Chase paid over $2.5 billion to settle claims for failing to adequately oversee accounts used by Madoff in his Ponzi scheme. Madoff is currently serving a 150-year sentence.

    Sharkey testified (again) earlier in the week that she was fired in 2009 for whistleblowing on a bank client (“Client A”), who she suspected of fraud and money laundering. According to Bloomberg, JP Morgan and its defendants claimed in court that the Client A issue was irrelevant and Sharkey was primarily fired for lying about another client (“Client H”).

    …her former boss testified.

     

    "In the end, it was the fact she lied to me," Leslie Lassiter told jurors in Manhattan federal court Wednesday. "It’s hard to have somebody working for you who you can’t trust. That’s pretty fundamental in a bank."

     

    Lassiter, a key witness for JPMorgan Chase in its defense of Sharkey’s whistle-blower suit, said she was fired for lying when questioned about contacts with the representative of a different wealthy customer. The client’s office manager called to complain that Sharkey hadn’t returned her calls and to ask if the wealth manager was just "a phantom," according to Lassiter, who is one of three JPMorgan employees named as defendants in Sharkey’s suit, alongside the bank. Lassiter said she assigned the client, referred to in the trial only as "Client H," to Sharkey, who’d been promoted from private banker to private wealth manager in 2008. Client H had about $25 million managed by the bank, she said.

    Lassiter claims that Sharkey lied numerous times and performed some parts of her job poorly, in spite of adding 50 new clients and more than $100 million of assets to JP Morgan’s Wealth Management business. From Bloomberg..

    Lassiter told jurors she asked Sharkey at least a half dozen times whether she’d been in contact with Client H or his office, and that Sharkey gave her reassurances.

     

    "‘Don’t worry, I’m on it. Taken care of,’" Sharkey said, according to Lassiter. Lassiter said she then got a call from Client H’s office manager, known in the trial as "Manager T," who said she couldn’t get her calls returned by Sharkey. Manager T questioned whether Sharkey was a phantom and asked if she needed to pull her boss’s money out of JPMorgan Chase to get her attention, Lassiter testified.

     

    Lassiter then discussed Manager T’s call with Sharkey, in a meeting on July 21, 2009. Sharkey admitted she’d never contacted Manager T, according to Lassiter. Lassiter also faulted Sharkey for a "casual attitude" toward her work and her inability to wrap up required "Know Your Customer" processes on client accounts. Sharkey was fired Aug. 5. Under questioning by Sharkey’s lawyer, Lassiter testified that Sharkey had been promoted to private wealth manager about a year before she was fired. Sharkey was responsible for bringing more than 50 new client relationships totalling more than $100 million in assets.

    On Tuesday, Bloomberg provided more details on Sharkey’s testimony…

    Sharkey claims JPMorgan Chase violated whistle-blower protections in the 2002 Sarbanes-Oxley Act and is seeking back pay, compensation for her emotional distress and reinstatement to her job.

     

    Sharkey told the jury of five women and three men on Tuesday that she was let go after telling superiors she planned to send out letters terminating the bank’s relationship with Client A, who had about $14 million under management.

     

    "I was fired the next day," Sharkey said. Michael Schissel, a lawyer for the bank, sought to undercut Sharkey’s testimony that she suspected Client A of breaking the law. "You never put in writing that you believed Client A was engaged in illegal activities, true?" Schissel asked. "True," Sharkey said.

    The report noted that there was another, albeit unrelated, lawsuit in March this year by whistleblower fired by JP Morgan…

    In an unrelated case, a former JPMorgan private client adviser claimed in a March lawsuit that he was fired for blowing the whistle on potential Dodd-Frank Act violations to upper management.

     

    Bradley Sayre said he was told to toss out notes in his files and destroy fraudulent sales materials while the bank was negotiating a settlement with the Justice Department over fraudulent sales of collateral backed securities. The bank has sought a dismissal of the case, saying Sayre is pursuing the same claims in arbitration.

    While this murky case continues, we can’t say that we are confident that Jennifer Sharkey will prevail. However, at least she hasn’t fallen from any tall buildings.

  • All Of Iraq About To Be Liberated As ISIS Enters The Dustbin Of History

    Submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media

    Iraqi forces continue to advance on al-Qaem, the last "Islamic State" (ISIS) stronghold in Iraq, which will put the last stone over the terrorist group’s grave and on the so-called “Islamic State Caliphate” that so much occupied the world’s headlines over the last few years and indeed, large parts of Iraqi and Syrian territories.

    ISIS is aware that al-Qaem will fall very soon – the city won’t be able to hold for very long. Therefore, many of the group's leaders and militants have fled to the numerous refugee camps which have emerged in the last years – according to intelligence reports – in the Iraqi Anbar desert and the Syrian al-Badiya where ISIS can hide along the tens of thousands of kilometers of sprawling Syrian-Iraqi border areas among refugees.

    ISIS is expected to lick its wounds to try and re-organize its group following the defeat inflicted upon it as indicated by its shrinking territory (which it has occupied since 2014), as well as its shrinking numbers. Many foreign fighters were either killed or mostly left the group, which has remained largely incapable of recruiting new forces. Moreover, ISIS resources have dried up: no more oil and gas fields under its control, no more taxes to be imposed, no more arts and crafts to steal and sell, and no more “donations” from the Arab world.


    Image source: SouthFront

    Furthermore, the terror group has lost its very powerful, efficient, and unique propaganda tools and machine as after the liberation of Mosul and most of Iraq, the liberation of Palmyra, Raqqah, Deir-ezzour, most of al-Badiya, the Syrian Army liberated the city of al-Mayadeen, where ISIS kept its media base. Forces in al-Mayadeen seized a huge stock of ISIS propaganda tools and apparatus, reducing the group’s capability to produce online and offline propaganda.

    Nevertheless, it must be borne in mind that terrorism can never be totally defeated and it is obvious that cells remain active and will always find societies to host it or cover its back. Therefore, ISIS terrorist attacks in Mesopotamia, the Levant, West Africa, Asia and other parts of the world are expected to take place from time to time. This certainly doesn’t mean ISIS is returning or will become strong again, but on the contrary, it will be the group’s way of saying: “You think I am dead, but can still cause harm.”

    Today, the basis of any such “Islamic state” has been destroyed. ISIS has lost the two key cities that formed 'Islamic States' in ancient Islam (in Iraq and Syria), which leaves ISIS in a position of non-return to the era of 2014 when it occupied most of northern Iraq and a big part of Syria. In fact, ISIS has been pushed today into the dustbin of history.

    Many speculations continue to surface about the “challenge Iraq will face to avoid the return of ISIS to the 2014 era.” These speculations and analyses are based on pessimism and a lack of contact among "experts" with the ground and its dynamics as they pontificate while sitting comfortably thousands of miles away from Iraq and Syria. Today ISIS is the enemy of Shias, Sunni, Christians, Yazidi, Kurds and everybody else. Iraqis have experienced ISIS’ way of ruling and won’t allow it to return to occupy territory.

    Concerning reconstruction, yes, this is a real challenge facing every country at war. The whole of Europe (including Germany) suffered for decades from the German occupation and the destruction caused by two World Wars. Lebanon’s economy and infrastructure has still not recovered since the 1975 civil war. Syria, Yemen and Iraq will all suffer the financial burden caused by the devastation of war. All this is not new because war leaves behind destruction of the infrastructure and of homes, and leaves thousands of wounded in continuous need of expensive care, even if the world unites to support reconstruction.

    As for the political outcome in Iraq, the country proved to be outside the Iranian and American sphere of control. Iraq (Baghdad to Erbil) benefited from Iranian military support in 2014 when the US watched and waited for over six months while ISIS was swallowing city after city. But later on, when the US decided to intervene, Iraq benefited from American intelligence information, training and air support to defeat ISIS. Iraq also benefited from good relations with its neighbors like Turkey, Kuwait and Saudi Arabia regardless of the level of animosity between some of these countries and Iran. Baghdad made it clear that its line of policy doesn’t go against anyone and would like to stay out of regional and international disputes. Iraq is further aiming to distance itself from the Middle Eastern rivalries because its national interest comes before all other regional or international interests. Doubtless Iraq can play a role of mediation between the countries of the Middle East, but it will do so only if asked.


    Al-Qaem is the last major Daesh stronghold in Iraq. Image source: @IraqiGovt

    In fact, the head of the Iranian Revolutionary Guard Corps (IRGC) and envoy of the Gran Ayatollah Ali Kaminei, General Qassem Soleimani, offers his country’s support for the unity of Iraq and the defeat of ISIS. Like the US Special Presidential Envoy for Global Coalition to defeat ISIS, Brett McGurk, both have the same objectives and cannot expect that Iraq will adopt their respective policies in the Middle East nor adapt their animosity. Moreover, Baghdad is establishing good relationships with Damascus and is cooperating with the Syrian Army to defeat terrorism which hits both countries, despite the US stand against Syrian President Bashar al-Assad. Also, the Iraqi Prime Minister Haidar Abadi recently traveled to both Riyad and Turkey to promote reconstruction and investment in his country regardless of well-known Saudi and Turkish support of ISIS (known as al-Qaeda in Iraq up to and including 2014).

    Therefore, Iraq won’t be a platform for Iran nor the US to fight their wars on its territory despite the presence of over 5200 US military personnel and the presence of Iraqi groups and organizations close to Iran. These Iraqi groups are today assisting the Popular Mobilisation Forces (PMF) in their war on terror. Some will remain within the PMF and others will detach themselves by the end of this war. These are ideologically linked to Iran’s religious leadership – as are many Shia in the Islamic World – but are Iraqis who won’t act against their country’s interest because they are part of Iraqi society. Actually, as there are many Iraqi Kurds faithful to the US in Kurdistan Iraq, there are also Iraqi Sunni faithful to Saudi Arabia. Since Mesopotamia is walking towards democracy, the presence of cultural, religious and political diversity and alliances is only natural.

    There will be no tolerance from Baghdad leadership – after the defeat of ISIS – towards any religious or political group willing to keep its weapon or armed groups outside the military and security institutions. The PMF is like the Counter Terrorism Forces, the Federal Police and the Army, all under the command of the Iraqi Prime Minister who is also the supreme head of the armed forces. Since the war on ISIS, and the creation of the PMU in 2014, it has never fulfilled non-Iraqi agendas regardless of its raised banners in the battlefield.

    In Iraq, there is a new reality everybody should understand: no hostile propaganda can affect the security forces or the political leadership. Mesopotamia will declare a national independence day the moment ISIS occupation of every city is ended. With the end of ISIS, all foreign influence, regional or international, will cease. Iraq is planning to keep many friends and allies and build bridges for a new Iraq.

  • Payrolls Preview: Here Comes The Post-Hurricane Surge

    Submitted by RanSquawk

    The BLS will release the October Employment Report at 08:30am ET on Friday, November 3.  The Street is looking for a veritable surge in hiring following the hurricane-related disruption last month sent monthly payrolls to the first negative print in 7 years. Analysts also expect wage growth to continue rising: Median forecasts looks for 310k nonfarm payroll jobs, with average hourly earnings rising rise to 2.7% Y/Y

    Key forecasts:

    • Non-farm Payrolls: 310k (120k to 420k, Prev. -33k)
    • Unemployment Rate: 4.2% (4.1% to 4.4%, Prev. 4.2%)
    • Average Earnings Y/Y: 2.7% (2.5% to 3.1% , Prev. 2.9%)
    • Average Earnings M/M: 0.2% (-0.1% to 0.8% , Prev. 0.5%)
    • Average Work Week Hours: 34.4hrs (33.4 to 34.6hrs, Prev. 34.4hrs)
    • Private Payrolls: 303k (155k to 405k, Prev. -40k)
    • Manufacturing Payrolls: 15k (5k to 34k, Prev. -1k)
    • Government Payrolls: No forecasts (Prev. 7k)
    • U6 Unemployment Rate: No forecasts (Prev. 8.3%)
    • Labour Force Participation: No forecasts (Prev. 63.1%)

    TRENDS:

    Headline nonfarm payrolls have averaged 148k in the first nine-months of 2017, lower than the 200k average in the first nine-months of 2016, and below the 187k 2016 average. The trend rate has been hit, in recent months, due to disruptions caused by hurricanes Harvey, Irma and Maria. The three-month rolling averages has now slipped to 91k on the back of last month’s 33k decline in payroll growth.

    POTENTIAL REVISIONS TO SEPTEMBER DATA:

    While the consensus view expects the October data to show a bounce back, Societe Generale warns “historical experience after Hurricane Katrina showed that hard-hit industries struggled to spring back in the following month, and that phenomenon may have repeated this October,” adding that “given the extent of the damage and flooding from Irma and Harvey, there may have been some lingering weather effects that hindered job growth.”

    Analysts will be keeping an eye on September’s data following the shock decline of 33k payrolls (consensus looked for 80k payrolls to be added). While most of the drop was due to the leisure and hospitality sectors, the professional and business services sector printed just 13k payroll additions, which SocGen says is 35k below the January to August average.

    WAGES:

    In its latest policy statement, the FOMC noted that “labor market has continued to strengthen,” and going forward “labor market conditions will strengthen somewhat further.” However, it once again reiterated that “market-based measures of inflation compensation remain low.”

    The latest Employment Cost Index data for Q3 – which tends to correlate quite well with wage growth analysts say – bodes well. But although the ECI shows compensation is rising, it has failed to spark any meaningful inflation. “Lower unemployment has not yet fed through to a meaningful acceleration in wage growth,” Capital Economics writes. “Further ahead though, with labour market conditions exceptionally tight, payroll growth will trend lower, and earnings growth may begin to rise more markedly.”

    MARKET INDICATORS:

    CLAIMS: Initial jobless claims were rising going into the September report, on a four-week moving-average basis; but since then, they have been ticking down. The latest data puts the four-week moving-average at 232.5k, down from 267k going into the September report. “Increasingly, it appears that the trend in claims has declined to a new low, consistent with the strengthening in surveys of labor demand,” writes Pantheon Macroeconomics. “Falling claims boost consumers' sentiment, and usually are associated with falling unemployment and a rising quits rate. The labor market continues to tighten.”

    ADP: The ADP reported 235k payrolls were added to the US economy in October, greater than the consensus view which was looking for 200k. The September data, however, was revised lower slightly. “The ADP payroll private employment measure is not the best predictor of the official non-farm payroll employment at the best of times and is even less useful in the aftermath of the hurricane disruption. Accordingly, it’s probably best to ignore the data,” Capital Economics says. “The ADP measure never accounted for the full disruption of the hurricanes in September so, unsurprisingly, the bounce-back in October was minimal. But looking at September and October together, ADP employment increased by a cumulative 345,000,” which suggests that the official NFP number could come in around 378k.

    CHALLENGER JOB CUTS: The survey saw US employers announcing just under 30k job cuts in October, 3% lower than October 2016, and employers have now signalled some 25% fewer job cuts than in the same period last year, Challenger said. The 2017 total YTD stands around 25% lower than the same time last year, the lowest 10-month total since 1997. “Companies are currently holding on to their workforces, but this may be the calm before the storm,” Challenger CEO said. “Another downturn could be on the horizon for early to mid-2018 and with it, the large-scale layoff announcements that typically follow. Adding to this is the possibility that global factors, including Brexit, could usher in a recession,” Challenger added.

    BUSINESS SURVEYS: Markit’s flash composite PMI for October suggests that private sector job conditions saw “a solid increase supported by the steepest rise in payroll numbers at manufacturing companies since June 2015.” However, for the dominant services sector, job creation eased in the month. Nevertheless, Markit noted that “There were also positive developments in terms of staff hiring and business optimism during October, suggesting that private sector firms are gearing up for sustained growth in coming months.” It is slightly more difficult to use the ISM indices to gauge the health of the labour market this month, given the non-manufacturing release is scheduled for release on the day of the NFP release. However, the employment sub-index slipped by 0.5pts, though comfortably remains in growth territory.

    WHAT BANKS DESKS ARE SAYING:

    • Barclays: We expect the October employment report to show a strong rebound in hiring after September data were suppressed by hurricane-related effects. At a decline of 33k last month, we estimate that the storms reduced growth in payroll employment by about 200k. Looking ahead to the October report, we expect nonfarm payrolls to rise by 325k. Our forecast is consistent with a quick retracement of storm-related effects, which is consistent with the signal from initial jobless claims and, indirectly, from other activity data that showed a quicker-than-expected bounce back in activity. Nearly all of this improvement should come in private sector payrolls and we expect private payrolls to rise by 320k, with the remainder coming in government payrolls. Within private payrolls, we look for a significant rebound in services employment and, in particular, leisure and hospitality employment. Elsewhere in the report, we look for the unemployment rate to hold steady at 4.2% and for average hourly earnings to rise by 0.2% m/m (2.6% y/y). We view at least part of last month’s 0.5% m/m rise in hourly earnings as distorted by storm-related factors that either held back hours for salaried employees or reduced the numbers of hourly workers from the survey.
    • BMO: We estimate Hurricanes Irma and Harvey chopped nonfarm payrolls by roughly 160,000 in September. This estimate (based on an equation that includes the number of workers absent due to bad weather) is just shy of the BLS’s tally of actual job losses in Florida and Texas last month (-135,000) relative to this year’s trend. Most workers likely returned to work in October, while other persons were hired for reconstruction efforts. Adding an assumed 160,000 rebound in payrolls to the average gain in the first eight months of the year (just over 170,000) yields a 330,000 increase in October following a 33,000 decline in September. The leisure and hospitality sector should recover most of the 111,000 jobs that were lost in September. Some payback for the astounding 906,000 increase in household survey jobs last month, coupled with a likely pullback in the participation rate, should hold the jobless rate at a 16-year low of 4.2%. Average hourly earnings will simmer down after September’s result (0.5%) was juiced by the loss of low-paying jobs in the hospitality sector. A 0.2% monthly advance would trim the yearly rate to 2.8%, while maintaining a slow upward trend.
    • Capital Economics: We are forecasting a huge 350,000 rebound in payroll employment in October, as the impact of Hurricanes Harvey and Irma is reversed. State level data show that payroll employment fell by 130,000 in Florida and by almost 10,000 in Texas in September, compared to average monthly gains of close to 20,000 for both states. If that shortfall were fully reversed in October, that would add 200,000 to payroll employment. All the indications are that the underlying pace of payroll gains has remained fairly robust. The Markit employment PMIs point to private payrolls expanding by close to 200,000. All told, we are pencilling in a 350,000 rebound in payroll employment, following the 33,000 fall in September. Even so, the unemployment rate probably held steady at 4.2% since the household employment measure is unlikely to rise much following its surge last month. Finally, wage growth was boosted last month as the hurricanes hit low-paid employment hardest. That effect will be unwound in October.
    • Deutsche Bank: With September’s soft CPI print providing a little more ammunition to the Fed’s doves, employment data is crucial to the Fed’s narrative for continued gradual rate hikes. We are expecting a sharp rebound in payroll growth (+250k forecast vs. -33k previous), supported by a dissipation of hurricane effects; low jobless claims during the survey week; and robust supporting evidence of solid job growth from the ISM employment subcomponents. However, there is considerable uncertainty around this expectation. Indeed, after Hurricane Katrina, which exhibited a similar plunge in job growth in the September 2005 print, it took until November 2005 for job growth to return to its earlier trend. Within the other details of the report, average hourly earnings growth should slow (0.1% m-o-m vs 0.5%), which could lower the year-over-year growth rate to 2.6%, down from the post-crisis high of 2.9% in September. This retracement is due both to hurricane effects, which we believe boosted September average hourly earnings growth by at least 4bp, as well as other statistical regularities that we have noticed (e.g., bias tied to when the 12th falls within the survey week and how many work days there are in the month) that also point to a softer average hourly earnings print. We expect the unemployment rate to be unchanged (4.2%) at its lowest level since early 2001. Ahead of Friday’s report, we may potentially sharpen our expectations for job growth depending on ADP employment (+240 thousand vs +136 thousand) on Wednesday.
    • HSBC: Nonfarm payrolls fell 33,000 in September. State level figures show that payroll employment in Florida fell by 127,000. This largely reflected the effects of Hurricane Irma, as many people were unable to work because their workplaces were not open or because they had temporarily been evacuated from their regions. The majority of these workers will have returned to their jobs in October and should therefore add to overall national increase in payrolls for the month. State level figures for Texas suggest that there will be a similar, but much smaller, impact from persons returning to work following Hurricane Harvey. We expect that nonfarm payrolls rose 300,000 in October. This month's release may shed some light on whether the sharp 0.5% rise in average hourly earnings in September was partly distorted by the hurricanes. The September report showed a sharp drop in food services employment which is likely to be reversed in October. Since average wages in the food service industry are lower than the national average, the temporary decline in jobs in this industry may have indirectly boosted the overall average for hourly wages. We expect that average hourly earnings were unchanged m-o-m in October. The y-o-y rate of increase could fall to 2.5%, down from 2.9% in September. In addition, we forecast the unemployment rate rose to 4.3% in October from 4.2% in September.

  • Team Bernie Chimes In: "DNC Corruption Is Bigger Than One Primary"

    Former interim DNC Chairwoman Donna Brazile confirmed what many widely suspected in an essay published in Politico today where she called out former DNC Chairwoman Debbie Wasserman Schultz and former Secretary of State Hillary Clinton for unfairly rigging the 2016 primary against Bernie Sanders.

    In her expose, Brazile described how the Clinton campaign siphoned money from state party chapters, and asserted her control over the DNC by making it financially reliant on her fundraising abilities, even describing the campaign’s actions as “essentially money laundering.”

    The agreement—signed by Amy Dacey, the former CEO of the DNC, and Robby Mook with a copy to Marc Elias—specified that in exchange for raising money and investing in the DNC, Hillary would control the party’s finances, strategy, and all the money raised. Her campaign had the right of refusal of who would be the party communications director, and it would make final decisions on all the other staff. The DNC also was required to consult with the campaign about all other staffing, budgeting, data, analytics, and mailings.

    Brazile’s revelations have revived conversations about whether the party has an obligation to ensure a fair primary (one judge who dismissed a lawsuit against the DNC suggested the organization is actually under no obligation to do so, even confirming that it showed a “palpable bias” toward Clinton).

    Offering their two cents on the issue, a group of former Bernie Sanders’ presidential campaign staffers chimed in on the debate, claiming that “corruption has plagued” the DNC for years and that the problem stretches far beyond the 2016 campaign, according to the Washington Free Beacon.

    Saikat Chakrabarti, who was director of organizing strategy for the Sanders campaign and now runs a group aiming to change the Democratic Party, said he wasn't surprised to hear the admission from Brazile.

     

    "We all knew that the primary was rigged," Chakrabarti said on behalf of Justice Democrats, a group he founded. "But the corruption that plagues the Democratic Party is bigger than one primary—it's become a rot set at the very root of a party [that] claims to be for working people."

     

    Chakrabarti added that the Democratic Party is currently "devoid of message, devoid of money, and devoid of a winning strategy."

     

    "The people want a party that works for the people and wins," he said. "We are sick and tired of wasting money on helping a party that wastes it through incompetence and corrupt negligence."

     

    Justice Democrats says it has seen an uptick in donations—$2,500 an hour—since Brazile's admission broke on Thursday morning. The group currently has a slate of candidates running for office in 2018, many of them challenging Democratic incumbents.

    Of course, despite Brazile’s sanctimonious posturing and her claims that she was ignorant of the control Clinton exerted over the party before taking over as interim chair last summer (Tom Perez has since been named permanent chair), leaked DNC emails revealed that she played a role in tilting the primary in Clinton’s favor by leaking debate questions and town hall topics to her one-time political ally.

    Recent polling shows Bernie Sanders is presently the most popular politician in the country, and he’s an independent candidate. That’s hardly a coincidence. We didn’t need Brazile to tell us how Clinton effectively ran the DNC – the public has widely believed this for years.

    The question now is: Will anything change?
     

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Today’s News 2nd November 2017

  • US Administration Defends Its Right To Start Wars On A Whim

    Authored by Andrei Akulov via The Strategic Culture Foundation,

    The US Constitution says that only Congress can declare war for an extended time but there is a workaround.

    Congress approved the 2001 Authorization for Use of Military Force (AUMF), giving the president the authority to track down and destroy al-Qaeda and the Taliban. The resolution stipulates that “The President is authorized to use all necessary and appropriate force against those nations, organizations, or persons he determines planned, authorized, committed, or aided the terrorist attacks that occurred on September 11, 2001, or harbored such organizations or persons, in order to prevent any future acts of international terrorism against the United States by such nations, organizations or persons.”

    The resolution’s 2002 version gave President Bush the authority to invade Iraq.

    Only 25 percent of the current members of Congress in the House and Senate were present when the current AUMFs were passed.

    Sen. Chris Murphy, D-Conn., and several other Democrats are asking whether a new law authorizing the use of military force should be written.

    They are planning to introduce legislation that would prohibit Trump from starting a pre-emptive war against North Korea, absent an imminent threat or without express authorization from Congress. They call for one without a sunset date, saying that Congress needs to have a voice.

    The deadly incident in Niger last month ignited a push among many members of Congress to update the legal parameters for combat operations overseas. The revelation that the US is at war in Niger, without Congress even knowing, was startling. This is the perfect illustration of the US’s permanent war posture around the world, where battles are waged with little or no public scrutiny and no congressional authorization. All previous attempts to ditch the old authorization and force Congress to craft a new one have failed. For years now, Congress has abdicated its responsibility to debate and vote on US wars.

    This time lawmakers mentioned the possibility of using military force in crises involving North Korea, Iran and Venezuela, as well as the ongoing efforts against multiple militant groups that did not exist at the time the AUMF came into force. The AUMF authorized military actions only against al Qaeda, the Taliban and other perpetrators of the Sept. 11 terrorist attacks.

    During testimony before the Senate Foreign Relations Committee on October 30, Secretary of State Rex Tillerson and Defense Secretary Jim Mattis opposed the idea of rewriting the legislation in force and told the lawmakers demanding a new war authorization that existing laws governing combat operations are legally sufficient.

    The two secretaries explained that the executive branch has the power to launch an attack in certain circumstances where US citizens and national security interests are being imminently threatened. Tillerson and Mattis declined to make precise whether they see North Korea as an imminent threat to be dealt with without congressional approval.

    They also said the AUMF should not be repealed until a replacement is in place. The top officials believe that repealing the law prematurely could signal the United States is backing away from the fight against terrorists. They cautioned senators against imposing restrictions on American military forces using force overseas, should Congress decide to write new AUMF legislation, as it would allow the enemy "to seize the initiative."

    Tillerson and Mattis told the committee that a new war authorization should not have time constraints or geographic constraints. Their view has strong support. Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.) appeared to cast doubt on the need to pass a new AUMF as it would “send the wrong message to our allies and our adversaries that we are not united and committed to victory.”

    Backers of a new AUMF say the 2001 authorization has let presidents wage war wherever they like, without answering to Congress, or the public. According to them, the current law is used as a pretext for using force abroad against the forces that have no relation to the perpetrators of the 9/11 terrorist attacks. Republican Senator Rand Paul believes that Congress has surrendered its war-making power to the White House. In September, he tried to repeal the current authorization, saying it allowed the president to engage in war "anywhere, anytime, anyplace on the globe". There are disagreements about what a new authorization should look like prevent the repeal of the current AUMF or introduction of a new legislation. It seems unlikely that a new law will be introduced to be considered by Congress – at least not soon.

    Meanwhile the AUMF, the open-ended document, is used to justify operations in many countries across the world with neither an exit strategy nor a defined goal. The combat actions are waged in Yemen, Libya, Somalia, Syria, Iraq and Afghanistan. It opened the door for attacks in on Pakistan and Mali and the new drone bases in Niger and Djibouti. There are many more involvements under the veil of “train and assist” missions. US commandos are operating in 137 countries. Drone campaigns are intensified in many countries, especially in Africa. Unmanned aerial vehicles attacks have quadrupled under President Trump. The administration still wants to increase drone strikes and commando raids. The US military presence in other countries is mushrooming.

    In 2013, businessman Donald Trump tweeted, “The president must get congressional approval before attacking Syria — big mistake if he does not!” Having become President, Donald Trump appears to forget his own admonition. Some time ago, the president said he would avoid interventions in foreign conflicts. Instead of investing in wars, he would spend money to build up America's aging roads, bridges and airports. Easily said and easily forgotten.

    The legislation – a writ for war without temporal or geographic limits – allows any president a boundless and unchecked ability to start wars. No checks and balances are in place. A strike can be delivered anywhere anytime without deliberations. Meanwhile, the United States continues to conduct covert endless shadow wars under the radar and beyond any scrutiny. The president is free to launch a war on a whim.

  • World's Longest Bull Market (55 Years) In Australian House Prices Is Over, According To UBS

    This morning, CoreLogic released its monthly report on Australian house prices – the world’s longest running bull market. Finally, measures to tighten credit standards and dissuade overseas buyers (especially Chinese in Sydney and Melbourne) are beginning to bite and price rises ground to a halt last month. From the report…

    Since moving through a peak rate of growth in November 2016, capital gains across Australia’s housing market have been losing momentum, with national dwelling values unchanged over the month of October. For October, conditions were flat across both the combined capital cities and the combined regional areas of Australia, however over the past twelve months growth in the capital cities (+7.0%) has outperformed the regional areas (+4.9%).

     

    CoreLogic head of research Tim Lawless said, “The slowdown in the pace of capital gains can be attributed primarily to tighter credit policies which have fundamentally changed the landscape for borrowers.” 

     

    “Lenders have tightened their servicing tests and reduced their appetite for riskier loans, including those on higher loan to valuation ratios or higher loan to income multiples.  Additionally, interest only borrowers and investors are facing premiums on their mortgage rates which are likely to act as a disincentive, especially for investors who are generally facing low rental yields on investment properties. 

     

    “In fact, the peak rate of growth in dwelling values lines up closely with the peak growth rate for investment lending in late 2016.   We saw the housing market respond in a similar fashion through 2015, and the first half of 2016 as investors faced tighter credit conditions following the announcement from APRA that lenders couldn’t surpass a 10% speed limit on investment lending.”

    The top line in CoreLogic’s summary table below shows that Sydney prices seem to be leading national prices lower.

    Following the release of the data, Bloomberg reports that UBS is calling an end to the boom in Australian housing…

    The housing boom that has seen Australian home prices more than double since the turn of the century is “officially over,” after data showed prices now flatlining, UBS Group AG said.

     

    National house prices were unchanged in October from September, while annual growth has slowed to 7 percent from more than 10 percent as recently as July, CoreLogic data released Wednesday showed. “There is now a persistent and sharp slowdown unfolding,” UBS economists led by George Tharenou said in a report.

     

    “This suggests a tightening of financial conditions is unfolding, which we expect to weigh on consumption growth via a fading household-wealth effect.”

     

    An end to Australia’s property boom will be welcome news for first-time buyers, who have struggled to break into the market after surging prices propelled Sydney past London and New York to be the second-most expensive housing market. Less impressed may be property investors, already squeezed by regulatory lending curbs that drove up mortgage rates.

     

    The cooling housing market may encourage the Reserve Bank to keep interest rates at a record low. A rate hike would be undesirable as it would put further downward pressure on dwelling prices, said Diana Mousina, senior economist at AMP Capital Investors.

    The regulatory crackdown on the insanely loose practice of lending on high loan to valuation ratios is well overdue. This was permitting speculators to use unrealized gains on one property as a down payment on another property, then another property as prices roses, and so on. See our post from last month “Australia Mortgage Market Is Now A $1.7 Trillion ‘House Of Cards.’”

    As we noted at the times, over a decade ago, the U.S. residential housing market was revealed to be perhaps the biggest ponzi scheme ever created as easy financing enabled people to buy/build countless investment properties, that they were in no way adequately capitalized to own, with no money down all based on the premise that the house could be 'flipped' before the first mortgage payment even came due.  It was a classic ponzi that worked great for a while but inevitably turned south when home prices suddenly soured and their was no cash equity backing the trillions of dollars in outstanding mortgage debt. But, if a new report from LF Economics is even directionally accurate, then the bubble currently percolating in Australia could take the residential housing ponzi game to a whole new level courtesy of a 'creative' little product called "cross-collateralized residential mortgages."

    The Australian mortgage market has “ballooned” due to banks issuing new loans against unrealised capital gains of existing investment properties, creating a $1.7 trillion “house of cards”, a new report warns.

     

    The report, “The Big Rort”, by LF Economics founder Lindsay David, argues Australian banks’ use of “combined loan to value ratio” — less common in other countries — makes it easy for investors to accumulate “multiple properties in a relatively short period of time despite high house prices relative to income”.

     

    “The use of unrealised capital gain (equity) of one property to secure financing to purchase another property in Australia is extreme,” the report says.

     

    “This approach allows lenders to report the cross-collateral security of one property which is then used as collateral against the total loan size to purchase another property. This approach substitutes as a cash deposit.

     

    “This has exacerbated risks in the housing market as little to no cash deposits are used.”

    Yes, you read that correctly…Australian housing speculators can literally use unrealized gains in investment properties as a 'cash substitute' for down payments on other investment properties.  Of course, we're not experts at 'the mathematics,' but if you constantly take every dollar worth of equity you accrue and pledge it as collateral toward a new purchase then doesn't that mean the entire system is built on debt and no actual equity at all?

    Earlier this month, the Bank for International Settlements (BIS) released a new working paper“Interest rates and house prices in the United States and around the world”.

    This identified Australia’s 55-year housing bull market – 50 years from 1961-2010 then 2013-2017 without a downswing in between – as the longest in world. The US housing bull market from 1992-2006 was a mere 15 years. This was the BIS methodology.

    Another way to appreciate the persistence of house prices is to contrast the length of their upswings and downswings. We define an upswing (downswing) as a period of house price increases (decreases) sustained in an individual country for three years or more. Based on this definition, periods of upswing accounted for nearly 80% of the advanced economy sample. The up swings lasted on average 13 years; with the longest one, in Australia, still continuing after half a century.

    Here are the results in tabular form – Australia is third from bottom…

    Since 2000, the BIS found that Australia has seen the second largest increase in real house prices, only exceeded by New Zealand – where the new government has just banned foreign buyers from the market.

     

    Our gut feeling is that today’s data signals the beginning of a “Minsky Moment” for the Australian housing market.

  • Why Has The Las Vegas Massacre Disappeared From The News Cycle?

    Authored by Jon Hall via Free Market Shooter blog,

    It is without a doubt, our news cycle – in the age of 24/7 constant-connectedness – moves at a breakneck pace. With so much information and news reaching us, it’s easy to become overburdened and burned out on the world around us and the things taking place. It is true, too, that the mainstream media dictates what stays center in the mind of the public and what is allowed to fade away and be forgotten. It is of the utmost importance we remain aware – however exhaustive it may be – of stories that just don’t add up.

    Enter the Las Vegas shooting; the worst mass-shooting in U.S. history…

    On October 1, 64-year-old Stephen Paddock opened fire on a country music festival from the 32nd floor of the Mandalay Bay hotel, which overlooked the festival venue. Paddock’s onslaught left 58 dead and 546 injured.

    A full month later, and we are still without any answers. Even more worryingly, the Vegas shooting has disappeared from any cable news channel. Even online, discussion over the shooting has all but vanished, save from the more conspiratorial corners of the web.

    Here are the facts:

    The official timeline of the Vegas shooting has changed three times. A week before the attack, Paddock wired $100,000 to an account in the Philippines. Paddock also took cruises to ports in the Middle East. Paddock’s laptop was also missing its hard drive when recovered in his hotel room.

    Despite a month of being told otherwise, it’s now been revealed that police did discharge fire in Paddock’s hotel room upon entrybut why, if Paddock had already killed himself before police breached the room?

    Jesus Campos is the security guard who first reportedly found Paddock as he started his killing spree, and was shot in the leg in the process.  However, he not only disappeared after scheduling several television interviews, but it’s now been revealed Campos reportedly left the country just days after the Vegas shooting.

    Why did authorities let Campos leave the country in the middle of an investigation? How did Campos travel unhindered with a gunshot wound in his leg?

    Not only that, but Campos was said to have been last heard from when he went to a walk-in health clinic… but a spokesperson for UMC Quick Care – the facility Campos supposedly went to – said they had “heard nothing” about Campos visiting them.

    On top of all of that, Campos only re-emerged to do a fluff, softball interview on Ellen. DeGeneres guides Campos along the interview, essentially framing and explaining the timeline of events so Campos didn’t have to. At times, the interview even seems scripted. Don’t take my word for that, I implore you to watch and see if you agree:

    Plainly, things aren’t adding up with the Vegas shooting. Paddock was in an area with extremely heavy surveillance, yet no stills or video of him have been released to the public. No potential motive has been released. Really, no answers to any of the questions that arose in result of the story not adding up have been addressed… instead, the Vegas massacre has vanished from cable news channels and the public mind.

    Another note to add, in just the span of a month, 4 survivors of the Vegas shooting have died. Notably, both Kymberley Suchomel and Danny Contreras both publicly claimed there were multiple gunmen the night of the mass shooting. Dennis and Lorraine Carver died after their Mercedes smashed into a metal gate and exploded into flames. Per CNN:

    The couple’s youngest daughter, 16-year-old Madison Carver, told the Las Vegas Review-Journal that she heard the crash from her bedroom. When she ran outside and down the street to find out what had happened, she recognized her family’s vehicle in flames.

    By the time their daughter heard the crash (which only happened about a half mile from the Carver’s home) and ran down the road to see what had happened, the car was engulfed in flames… Much like everything else pertaining to the Vegas shooting, the story just doesn’t make sense.

    Here we are, a month later – with exactly what we had immediately in the aftermath of the shooting: nothing. No answers, no coverage, no questions… nothing.

    All of us should be asking many questions – if only to ourselves – about why the narrative behind Vegas isn’t adding up…

    Compare the massacre in Vegas to the terrorist attack that happened yesterday in New York. Within hours, we knew the name of the terrorist, had a picture of him, had his history as a refugee in the U.S. under a “diversity visa”, and had a note declaring allegiance to ISIS. We have timelines and what the terrorist was doing in the hours, days before the attack

    …yet in the case of Stephen Paddock, nothing.

    The victims of the Las Vegas shooting – R.I.P.

    We owe it to the victims to not let this simply fade away. We owe it to their memory to ask why the narrative behind the shooting stinks. We owe it to their legacy to question and demand answers from our public representatives when discussion and coverage is being obviously stone-walled. Nary a peep has come from any legacy media concerning Vegas in the past month, and that alone should make you question what’s really going on. You don’t have to delve into conspiracy theories or hack-witted ideas of a hoax. Merely ask yourself…

    Where did the investigative coverage on the Vegas shooting go? Why did the story drop out of the news cycle with so many unanswered questions?

    The worst mass-shooting in America yet and seemingly everyone has shrugged their shoulders, thrown up their hands, and declared indifference until the next one.

  • Nickel Price Surging As Hype Escalates During LME Week

    It’s LME Week and there’s cause for celebration in metal markets. European mining stocks rose to a 4-year high as the nickel price surged more than 5% intraday to a two-year high and rose by the daily limit in Shanghai trading today. Metals used in electronic vehicles, like lithium, cobalt, copper and nickel, are hot right now and a focal point of discussion at the LME gatherings. As Metal Bulletin noted, the 2017 event has seen record attendance.

    The annual LME Dinner week kicked off in a positive note, with record numbers gathering for the exchange’s keynote metals seminar on Monday October 30. “We have over 900 people over the day here…which is a record attendance,” London Metal Exchange chief executive officer (CEO) Matthew Chamberlain said.

    Despite relatively high inventories, big miners and metal traders are becoming increasingly bullish on nickel’s prospects. According to Bloomberg

    Glencore Plc and Trafigura Group Pte are often at loggerheads, but one thing they agree on: the nickel market will be transformed by the rise of electric cars. Nickel sulphate, a key ingredient in lithium-ion batteries, will see demand increase 50 percent to 3 million metric tons by 2030, Saad Rahim, chief economist at Trafigura, said in an interview. While other battery metals like cobalt and lithium have more than doubled since the start of last year, nickel prices have been subdued because of large inventories.

    "When you look structurally, we should start to get bullish now,” Rahim said.

     

    “Are you going to be able to meet that demand when the time comes, given underinvestment in the supply side?”

    Glencore, which was devastated by the downturn in nickel, is also optimistic, as are some of the analysts, as Bloomberg notes…

    (Glencore) told analysts recently that nickel production would need to increase 1.2 million tons by 2030, equal to more than half of current global output, to keep up with demand from the battery industry. Prices are currently more than double what it costs Glencore to mine the metal. It’s a surprising mood change for a market with a disastrous reputation. Nickel was long a thorn for Glencore, which was saddled with unprofitable operations following its takeover of Xstrata. It sold an Australian nickel mine, which Xstrata bought in 2007 for $2.4 billion, for just $19 million in 2015.

     

    “The nickel industry’s been a bit of a dog since about 2007,” Oliver Ramsbottom, a partner at McKinsey & Co. in Tokyo, said by phone.

     

    The battery industry could revive the fortunes of miners more than a decade after nickel collapsed from a peak of $51,600 a ton in 2007

    Despite the hype, Bloomberg cautions that there are still naysayers highlighting elevated inventories and the potential for supply to ramp-up faster than currently expected.

    Still, some analysts are skeptical that the bullish scenarios will play out. Electric cars are still a niche industry and nickel oversupply remains a threat, with current stockpiles four times bigger than since the start of 2012.

     

    Indonesia has authorized its largest producer to export more nickel ore. The Philippines has also discussed ending a ban on open-pit mining, raising concerns that supply will spike.

     

    “For years, the market has completely dismissed the idea that something positive could happen in nickel,” Ingrid Sternby, senior research analyst at Blenheim Capital Management LLP, said in an interview in London. “With the recent announcements about Indonesia and the Philippines, it’s easy to see why the market is still scary enough for people not to want to be involved…

     

    “You can see the tightness ahead in the nickel market, but my concern is that we’re going to see a lot of value destroyed along the way,” said Colin Hamilton, managing director for commodities research at BMO Capital Markets Ltd.

     

    “If the miners really believe in the EV growth story, the thing to do would be to keep the nickel in the ground until the deficit arrives.”

    When assessing the prospects for nickel, it is really two separate markets, nickel alloyed with iron and nickel sulphate used in batteries. Bloomberg expects the latter to progressively trade at a premium to the former.

    About half of global nickel production is in the form of ferronickel or nickel pig iron, which is nickel alloyed with iron, making it suitable for stainless steel. Battery makers, instead, use nickel sulphate, produced by dissolving pure nickel metal in sulphuric acid. One hope is that the pricing of nickel pig iron and the high-grade nickel sulphate will diverge in the coming years, improving the fortunes of miners that can produce battery-quality material.

     

    The global nickel market is heading for a deficit once above-ground stockpiles of battery-grade metal are consumed, according to Wood Mackenzie. The question for miners is how quickly the premium for top-quality nickel will emerge.

    The nickel alloy versus nickel sulphate certainly adds complexity to analysing nickel. However, while the fundamentals for the latter seem very positive, it makes us slightly nervous when record numbers of participants gather at industry jamborees.

    Still, politicians and automakers are increasingly counting on a future of electric cars, attracting traders such as Trafigura.

    “Will we see a real breakout in next 12 months? That’s hard to see, but beyond that, structurally this looks to be going up,” Rahim said.

     

  • China To Send People Who Mock The Country's National Anthem To Prison

    Authored by James Holbrooks via TheAntiMedia.org,

    In an effort to “uphold the respect of the people” for the country’s national anthem and “regulate their behavior while singing or playing” it, as the China Daily writes, China’s government is considering stiffening the penalty for mocking the tune. From the state-run outlet on Tuesday:

    “People who disrespect China’s national anthem could face up to three years in prison if a draft amendment to the Criminal Law is approved.

     

    "Besides a prison sentence, those found guilty could also be put under surveillance or deprived of their political rights, according to the draft, which was submitted on Tuesday to the Standing Committee of the National People’s Congress, the top legislature, for its first reading.”

    The National Anthem Law, which was passed by the Standing Committee back in September and went into effect in early October, lays out for Chinese citizens the situations where playing the song, “The March of the Volunteers,” is appropriate.

    Some of the situations stated in an October 2 article from China’s Xinhua News Agency are “constitutional oath ceremonies, flag raising ceremonies, major celebrations, awards ceremonies, commemorations, national memorial day events, important diplomatic occasions, major sport events and other suitable occasions.”

    The same article says citizens found guilty of mocking the song, including those who “maliciously modify the lyrics [or] play or sing the national anthem in a distorted or disrespectful way,” could be detained for up to 15 days.

    Now, however, it seems the Chinese government feels this punishment isn’t severe enough. In addition to the possible three years behind bars, “those found guilty could also be put under surveillance or deprived of their political rights.”

    What’s more, the law will apply to the semi-autonomous Chinese territories of Hong Kong and Macau, though the manner in which the penalties would be implemented in these regions remains unclear.

    This is significant because, as Anti-Media has reported, there is currently a growing independence movement in Hong Kong, and the local government increasingly bristles at Beijing telling it how to handle its affairs.

    In fact, Hong Kong’s defiant streak, as it relates to China’s national anthem, got the territory in a bit of trouble this week, as Reuters reported:

    “The Hong Kong Football Association (HKFA) was warned by the Asian Football Confederation (AFC) on Tuesday over the conduct of fans who booed the Chinese national anthem last month.

     

    “A small section of supporters jeered during the playing of ‘The March of the Volunteers’ and turned their backs on the Chinese flag ahead of a 2-0 win for the former British colony over Malaysia at Hong Kong Stadium in qualifying for the Asian Cup finals.”

    Incidentally, these new, harsher penalties would also apply to citizens disrespecting the Chinese flag. For the central government in Beijing, it all goes back to the “One China” ideology, which purports that all of China, even semi-autonomous regions like Hong Kong, is subject to the mainland’s rule.

    Zhang Rongshun, deputy director of the Standing Committee’s legislative affairs commission, says it’s about stopping a problem before it gets out of control:

    “In recent years, incidents of disrespecting the national anthem have occurred in Hong Kong, challenging the bottom line of the principle of ‘one country two systems’ and social morality, and triggering rage among Chinese, including most Hong Kong residents. It is urgent and important to apply the national anthem law in Hong Kong to prevent and handle such offences.”

    Amnesty International China researcher William Nee told Agence France-Presse (AFP) on Tuesday that Beijing attempting to force semi-autonomous regions to adopt these harsh penalties “would clearly be out of step with international law.”

    “Besides being incompatible with the right to freedom of expression to begin with,” he said“extending the law to Hong Kong and Macau is also especially worrying. It could be the first step in chipping away at internationally recognised human rights, using mainland China’s nearly limitless and vague concept of national security.”

  • Ding Dong Dandong – First Chinese Corporate Default After Party Congress

    Just over a week ago we highlighted how China’s financial regulator had instructed companies to delay the reporting of bad corporate news until after the Party Congress. As Bloomberg noted…

    China’s securities watchdog has asked some loss-making companies to avoid publishing quarterly results this week as authorities seek to ensure stock-market stability during the Communist Party Congress, according to people familiar with the matter.

     

    The China Securities Regulatory Commission made its requests via the country’s stock exchanges, the people said, asking not to be named as they’re not authorized to talk to the media.

     

    At least 17 Shenzhen-listed companies announced delays to their earnings reports from Oct. 20 to Oct. 24, up from three during the same period last year, exchange filings show.

    Now that the Congress is out of the way, announcements of corporate debt defaults are also reportable it seems.

    The latest relates to Dandong Port Group as the WSJ reports

    A debt-laden port management company in northeast China defaulted on $150 million in bonds, as highly leveraged businesses get squeezed by Beijing’s campaign to weed out risks in the financial system.

     

    Dandong Port Group Co., controlled by a Chinese construction magnate with political ties in the U.S., told bondholders this week that it is unable to repay part of 1 billion yuan in bonds due Monday.

     

    A company statement cited “heavy interest-bearing debt burdens and high short-term payment pressure” and said it is working with underwriters to repay the investors.

     

    The port, located at the mouth of the Yalu River on the border with North Korea, has expanded energetically in recent years to handle soybean imports from the U.S. and coal from Mongolia, even as much of northeast China’s resource-heavy economy struggled. International sanctions on North Korea have pinched some trade, though a company representative said the port halted business with the country in 2010 and so hasn’t been affected by the restrictions.

    The timing of the Dandong default is also noteworthy, coming shortly after PBoC Governor, Zhou Xiaochuan, warning on the sidelines of the Party Congress. Zhou warned about the high level of corporate debt and the risk of a “Minsky Moment.”

    “If we are too optimistic when things go smoothly, tensions build up, which could lead to a sharp correction., what we call a ‘Minsky Moment’. That’s what we should particularly defend against.”

    As WSJ notes, Dandong Port’s default is one of the largest this year…

    “The real market is slowly coming out, after the congress,” said Shen Meng, director at Beijing-based investment bank Chanson & Co. “Dandong Group’s problems reflect the lackluster state of the whole Chinese economy and the northeast region.”

    Defaults, still rare in China, are expected to increase following that congress, which handed President Xi Jinping a second five-year term and endorsed his broad program to make China a rich world power. To do that, Mr. Xi emphasized that the government will sustain a push begun this year to reduce high levels of debt that might pose a risk to the financial system. Money is increasingly tight for Chinese companies as banks respond to government calls to more closely scrutinize borrower business plans and authorities crack down on riskier financing plays. Yields on triple-A rated five-year corporate bonds are at nearly 5%, compared with 3.9% at the beginning of the year. Chinese firms have defaulted on 35 bond payments this year, compared with 78 last year and 23 in 2015, according to data from Shanghai Wind Information Co.

    When asked whether Dandong Port expected the authorities to help, a company representative was non-committal, saying that they have always worked closely with local government. The WSJ provided more details on the default…

    Dandong Port’s 1 billion yuan in bonds, issued in 2014, carried a coupon rate of 5.86% in annualized interest. Though the company made the 58.6 million yuan in interest due Monday, it couldn’t meet payment of principal on the bonds, whose investors exercised an option to sell them to the company early. Dandong’s profits have been sliding, and the firm warned about debt risks last year. The company has more than 40 billion yuan in unpaid debt, including several billion yuan in bonds, according to its half-year statement issued in August. It had a 76% debt-to-asset ratio as of last year.

     

    The company’s controlling shareholder, Wang Wenliang, was replaced as Dandong Port’s legal representative this August, although he remains in control of Dandong Port through two corporate entities, one of which is based in Hong Kong, according to company filings.

    Our question is whether the Dandong default is part of a post-Congress willingness to allow over-leveraged entities in the private sector to go to the wall. If so, we might see a flurry of similar events in the coming months. Alternatively, was the failure (so far) of the authorities to bailout Dandong part of Xi’s ongoing crackdown on corruption?

    Wang Wenliang was implicated in vote-rigging scandal in 2016, as the Journal notes…

    A fixture on lists of China’s wealthiest people, Mr. Wang has surfaced in separate scandals in China and the U.S. in recent years. He was one of several dozen deputies from Liaoning province expelled from China’s legislative body last year in a vote-buying scandal. In the U.S., his political funding and other donations have also been scrutinized. His construction business Rilin Enterprises, for instance, gave $1 million to $5 million to the Clinton Foundation since its founding, according to records published by the organization co-founded by the former candidate Hillary Clinton.

     

    A spokeswoman for Mr. Wang put his total donations to the foundation around $2 million. Also last year, The Wall Street Journal reported the Federal Bureau of Investigation had also examined a $120,000 donation by a U.S. business owned by Mr. Wang to then-Virginia Gov. Terry McAuliffe. Mr. Wang has also donated to U.S. universities including Harvard and at least one think tank, the Center for Strategic and International Studies. There is no sign that any of the donations was illegal. Spokesmen for the recipients and for Mr. Wang have pointed out that he has significant business in the U.S.

    Whatever the reason for allowing the Dandong default, life is getting tougher for the over-leveraged Chinese corporate sector. From Bloomberg’s take on the Dandong default

    Bond yields in China have surged after central bank governor Zhou Xiaochuan voiced concern about high corporate borrowing on Oct. 15. That sparked a 16 basis point jump in the average yield on AA- rated corporate securities this month, set for the biggest increase since May, according to China bond data. Twenty onshore bonds have defaulted this year, compared with 21 in the same period of 2016, according to Bloomberg-compiled data. 

     

    “The rising borrowing costs have eroded companies’ profits and made it more and more difficult to roll over existing debt,” Xu Hanfei and Li Yuze, analysts at China Merchants Securities Co. said in a report Tuesday, commenting on the default.

    In the end, debt will out, even in China.

  • Watch This Orwellian Pentagon Briefing On Syria: "Over 4000 Troops… No, Sorry… Just 500…"

    Whether it's the Middle East, Africa, or Eastern Europe, the familiar pattern of American military expansion goes something like this: first we are promised that US troops are merely in a country for limited "training" missions with "partner" forces; next we are told of "counter-terror" operations which require an increased "footprint"; after which we are assured once again that there are "no boots on the ground" but a "minimal" increase of train and assist missions; finally, US soldiers begin to come home in body bags at which point the 9/11 era AUMF is cynically invoked (Authorization For Use of Military Force).  

    On Tuesday the whole Orwellian cycle of American non-deployment to non-wars (by our politicians' standards) was on display during a single Pentagon press briefing, when Army spokesman Maj. Gen. James B. Jarrard told reporters that 4,000 US troops were deployed to Syria, but then awkwardly attempted to walk back the statement less than 30 seconds later:

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

    Army spokesman: I think it's a little over 4,000 US troops in Syria right now that are supporting efforts against Daesh, and supporting the SDF.

     

    Reporter: So you have 4,000 US troops in Syria, cause I thought that publicly, previously the number was 1,000. So this would be four times – well it was actually 500, but your saying 4000 US troops are currently in Syria?

     

    Army spokesman: I'm sorry I mispoke there – there are approximately 500 troops in Syria.

     

    …[press pool breaks out in laughter…]

    Interestingly, Major Jarrard appeared to have thought carefully as he struggled to articulate the initial "over 4,000" number. Though he begins his response by stumbling over his words, he actually appears firm and confident when he finally asserts the 4,000 number. It is only after the incredulous reporter points out the colossal leap in numbers (compared to previous official Pentagon statements) that the US coalition spokesman quickly walks it back and says, "I'm sorry I mispoke there – there are approximately 500 troops in Syria." 


    American boots on the ground in Syria: 500 or 4000+, or more? Image source: The Arab Weekly

    Though the DoD has long stuck to its official "503 U.S. troops, which mostly covers special operations units", it appears that not even the usually tame and docile Pentagon press pool is buying this, as the reporters broke out into loud laughter, after which long awkwardness and silence followed. 

    And even the Military Times, in its coverage, isn't buying it:

    However, those numbers don’t paint the actual picture of the size and scope of the U.S. footprint in either country. U.S. commanders on the ground have leeway to bring in extra troops for limited periods of time that don’t count towards the total FML.

     

    The current number of troops in Syria is above the FML, Eric Pahon, a Pentagon spokesperson told Military Times. But the number of U.S. boots on the ground in Syria is “not anywhere near” the 4,000 figure Jarrard mistakenly told reporters on Tuesday.

     

    The special operations commander “is only human; he just made a mistake,” Pahon told Military Times.

    Last summer, in a move that angered the US administration, Turkish state media leaked the locations of no less than ten small scale American military bases in northern Syria alone (revelations of US bases in southern Syria began surfacing as well). As the Military Times further acknowledges, these bases – though likely special forces forward operating bases – require a broad support base of US personnel operating in various logistical roles inside Syria. 

    And with the recent US-SDF build up in and around Raqqa after its recent liberation from ISIS, there is no doubt that this support base of US personnel on the ground in Syria has necessarily increased on a significant scale.

    According to Military Times:

    Images of massive convoys carrying coalition trucks and weapons and supplies to Syrian Democratic Forces could be seen on an almost daily occurrence, hinting that U.S. involvement in the Syrian battlefield was much higher than the 503 telegraphed in daily press briefings.

     

    Moreover, U.S. forces have been operating in a number of capacities to include security presence patrols to keep the peace between Turkey and U.S.-backed Kurdish militants. Images of rangers steam rolling through the northern Syria countryside in Stryker vehicles brandishing American flags during the spring was a common sight for several months.

     

    A task force of U.S. Marines has also been providing 24-hour all-weather artillery support to Syrian fighters. And U.S. special operations forces are actively advising and supporting SDF fighters as they continue to take ground from ISIS.

    As we noted previously, even the former senior national security adviser to the Obama administration, Colin Kahl, (among the very architects of Obama's dangerous and disastrous Syria policy) admitted that that the United States has entered a “quagmire” and will inevitably climb “further up the escalation ladder in Syria.” It is perhaps an obvious sign that we have already long been in the midst of a quagmire in Syria (the result of failed regime change plans) when the Pentagon spokesman comically spouts obvious lies, which elicits press pool laughter at the obvious absurdity of it all.

    Of course, the US was already very far up the “escalation ladder” from the moment it attempted to save face regarding the failed regime change war against Assad by investing itself in the war to the point of having to defend its SDF assets on the ground – a "plan B" of sorts: embed with the SDF  (or Kurdish-Arab Syrian Democratic Forces). This "plan B" will no doubt lead to more and more troop deployments, which itself will likely result in more absurdly comical (and tragic) displays of Orwellian Pentagon press briefings.

  • "Are They Trying To Silence Me?" – Arrest Warrant Issued For Rose McGowan As Elites Strike Back

    Authored by Mac Slavo via SHTFplan.com,

    Members of the Hollywood elite have been hammered in recent weeks over sexual abuse claims launched by both, males and females in the industry.

    It all started when actress Rose McGowan claimed that she was sexually harassed by movie producer and political power broker Harvey Weinstein.

    Now, it appears that the elite have had enough and may be sending a message to those who may have information that could expose their sexually abusive transgressions. According to reports, a suitcase belonging to Rose McGowan was found to have tiny traces of narcotics. After further inspection Washington Dulles International Airport officials reportedly determined that there were drugs in the bag, prompting police to issue an arrest warrant:

    Police launched an investigation after they allegedly found traces of narcotics in personal belongings left behind on a United flight arriving at the Washington Dulles International Airport on Jan. 20, the AP reports.

     

    A spokesman for the Metropolitan Washington Airports Authority Police Department, Rob Yingling, told Deadline investigators believe the personal belongings were McGowan’s.

     

    “Our police have attempted to contact Ms. McGowan so that she can appear in a Loudoun County Virginia court to respond to the charge,” Yingling said.

    (Yahoo)

    In a response to the warrant McGowan took to twitter:

    “Are they trying to silence me? There is a warrant out for my arrest in Virginia. What a load of HORSESHIT.”

     

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

    One can’t help but consider the real possibility that the pedophiles and abusers in Hollywood are starting to fight back through whatever means necessary.

     

    Curiously, the incident took place at Washington Dulles airport, a hotbed of sexual abuse and corruption to which big money players in Hollywood have direct connections.

    Actor Corey Feldman recently claimed that he is prepared to name names, but says his life is under threat do to the enormity of the scandal.

  • Papa John's Pulls NFL Ads Due To "Negative Consumer Sentiment"

    Having unleashed on NFL Commissioner Roger Goodell during the Papa John's earnings call this morning

    “The NFL has hurt us by not resolving the current debacle to the players’ and owners’ satisfaction,” Schnatter, who serves as the pizza chain’s chairman and chief executive officer, said on a conference call. “NFL leadership has hurt Papa John’s shareholders.”

     

    “Leadership starts at the top, and this is an example of poor leadership,” Schnatter said.

     

    “This should have been nipped in the bud a year and a half ago,” Schnatter said on the call.

     

    He concluded that “like many sponsors, we’re in touch with the NFL. Once the issue is resolved, we’re optimistic the NFL’s best years are ahead.”

    It appears Papa John's founder John Schnatter was serious about that last line… as ESPN's Darren Rovell reports that "Papa John’s says it has been pulling advertising associated with the NFL."

    While the last few sponsors/advertisers to pull their money from The NFL (here and here) were shrugged off by some, the decision by the major pizza chain – which is a mainstay of almost every commercial break as far as we can remember – will perhaps shock a few more owners.

    Papa John's is deeply rooted in the NFL since it has a deal with the league and 23 of its individual teams, according to Rovell.

    In exchange for pulling current ads, Schnatter said the NFL has given Papa John's additional future spots moving forward.

    Per Jonathan Maze of Nation's Restaurant News, Papa John's founder John Schnatter said sales are down due to "negative consumer sentiment" regarding the company's relationship with the NFL.

    Schnatter also called the NFL "an example of poor leadership," according to Maze.

    This is not the first time that Schnatter has been outspoken. As BI notes, Schnatter came under fire in 2012 for saying that the Affordable Care Act could be "lose-lose" for Papa John's franchisees and employees

    Schnatter argued that Obamacare would cost Papa John's $5-8 million annually and ultimately drive up the price of pizza.

     

    In his 2017 book "Papa: The Story of Papa John's Pizza," Schnatter argued that regulations are steering the US away from the system of free enterprise he believes is crucial to the nation's success.

     

    "America in 2016 is on the path to becoming what Germany was in 1867," Schnatter writes in "Papa." 1867 is the year that Schnatter's great-grandfather immigrated to the US from Germany as a young craftsman seeking work. The US was a land of opportunity where people were free to become successful without fear of attack or government interference.

     

    In January 2017, Schnatter emphasized that he believes that regulation in the US needs to be dialed back to help businesses thrive.

     

    "You've got to have free markets with limited government, with the proper amount of regulation where you don't jam entrepreneurship," Schnatter said.

    It appears the mainstream media would prefer to once again kill the messenger than pay any attention to the message.

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Today’s News 1st November 2017

  • Germany Forced To Pay Consumers To Use More Electricity

    A stormy weekend led to free electricity in Germany, as Bloomberg reports wind generation reached a record, forcing power producers to pay customers the most since Christmas 2012 to use electricity.

    Power prices turned negative as wind output reached 39,409 megawatts on Saturday, equivalent to the output of about 40 nuclear reactors.

     To keep the grid supply and demand in balance, negative prices encourage producers to either shut power stations or else pay consumers to take the extra electricity off the network.

  • Gold vs. Bitcoin: Goldman Sachs Weighs In

    Authored by James Rickards via The Daily Reckoning,

    I write and speak a lot on gold. In contrast – and this surprises some people – bitcoin is my least favorite topic. I’m made my views known many times.

    Still, interviewers love to get into the “gold versus bitcoin” debate. I continually get dragged into discussing bitcoin in interviews on TV, radio and the internet. So I discuss it whether I want to or not.

    From my perspective, you might as well discuss gold versus watermelons or bicycles versus bitcoin. In other words, it’s a phony debate. I agree that gold and bitcoin are both forms of money, but they go their own ways.

    There’s no natural relationship between the two (what traders call a “basis”).

    The gold/bitcoin basis trade does not exist. But people love to discuss it, and I guess Goldman Sachs is no different.

    Goldman Sachs has released a new research report that comes down squarely on the side of gold as a reliable store of wealth rather than bitcoin, which is untested in market turndowns.

    Precious metals like gold are “neither a historic accident or a relic,” said the report.

    It affirmed that gold is more durable than cryptocurrencies because cryptocurrencies are vulnerable to hacking, government regulation and infrastructure failure during a crisis.

    Goldman also reminds us that gold holds its purchasing better than cryptocurrencies and has much less volatility. In dollar terms, bitcoin has had seven times the volatility of gold this year.

    Since Goldman’s research department has not been notable as a friend to gold, the fact that they favor gold over bitcoin is highly revealing in more ways than one.

    I don’t deny that bitcoin has made some people multimillionaires, but I also believe it’s a massive bubble right now.

    I don’t own any bitcoin and I don’t recommend it. My reasons have to do with bubble dynamics, potential for fraud and the prospect of government intrusion.

    So bitcoin evangelists seem to think I’m a technophobe. But I’ve read many bitcoin and blockchain technical papers. I “get it” when it comes to the technology.

    I even worked with a team of experts and military commanders at U.S. Special Operations Command (USSOCOM) to find ways to interdict and disrupt ISIS’ use of cryptocurrencies to fund their terrorist activities.

    I will say, however, that I believe in the power of the technology platforms on which the cryptocurrencies are based. These are usually called the “blockchain,” but a more descriptive term now in wide use is “distributed ledger technology,” or DLT.

    So although I am a bitcoin skeptic, I believe there is a great future for the blockchain technology behind them.

    I’m not telling anyone not to own cryptocurrencies, but you need to do your homework before you do.

  • Iceland's Biggest Volcano Is "Ready To Erupt" As Europe Faces A Disaster

    Authored by Mac Slavo via SHTFplan.com,

    Iceland’s biggest volcano has been rocked by the strongest earthquake since it last erupted in 2014.

    With swarms of earthquakes occurring in the French Alps too, Europe is facing what could be one of the largest natural disasters in history.

    Last week, the 6,591-foot tall Bardarbunga, a “powerful and versatile” volcano, was rattled by the four largest earthquakes since it last erupted in 2014.  The earthquakes, measuring in magnitudes of 3.9, 3.2, 4.7, and 4.7 on the Richter scale, struck the caldera region over several days last weekend. Another magnitude 4.1 earthquake hit the 200km long and 25km wide volcanic system earlier last week and several tremors struck in September.

    Páll Einarsson, a volcanology expert at the University of Iceland, said the latest quakes are part of a series that have been “in progress for two years”. Speaking exclusively to Daily Star Online, he said the volcano is “clearly preparing for its next eruption” within the next few years.

    Fears are spiking even higher when considering the earthquake swarm that has been rocking the French Alps recently.

    The 10,000-year-old volcano spewed out large volumes of sulfur dioxide during its last seven-month eruption which took place between August of 2014 and February of 2015. Although the eruption did not disrupt any flights, the emissions harshly impacted the air quality in Iceland, leading to health consequences across the country.

    In spite of describing the volcanoes activity as “high”, the Icelandic Met Office has yet to issue any warnings about the possibility of Bardarbunga’s eruption. In fact, the warning code remains green; meaning the volcano is in a normal, non-eruptive state, according to the volcano monitor.

    Seven years ago Iceland’s massive Eyjafjallajökull volcano erupted, spewing a choking veil of ash across Europe. Residents worry as memories of the 2014 eruption and the flight chaos caused by the 2010 eruption of the Eyjafjallajökull volcano resurface. 

    The deadly volcanic dust wiped out skies and grounded 100,000 flights, resulting in the economy losing £4 billion.

    Should an eruption of Bardarbunga take place, it’s highly possible that there would be another even more drastic air travel restriction and poorer air quality.

  • Goldman: Global Capex Is Accelerating (But It Might Not Be Good News)

    In “Capex complex: Seeking a revival in global capex”, Goldman Sachs is reversing its bearish stance and getting bullish on global capex prospects.

    Global capex has hit a trough. After three years of declines, aggregate capex for Goldman Sachs’ coverage of c.2,500 companies is set to grow by c.4% yoy in 2017 according to our analyst estimates, in line with c.4% real growth in global GDP and an 8% rise in aggregate sales. However, to call this the beginning of a recovery in ‘growth capex’ seems premature.

    We’ll return to the issue of growth versus maintenance capex below but, at the aggregate level, each of the four constraints Goldman previously identified – low nominal GDP growth, overcapacity, uncertainty and technology – is easing.

    Firstly, our economists expect global GDP to grow at 6.2% yoy this year on a nominal basis, the fastest rate since 2011…Secondly, while global overcapacity persists, it is beginning to dissipate thanks mostly to concerted restructuring efforts in China over the last 12-18 months, in terms of shutting down inefficient and emission-intensive supply in sectors such as steel, coal, chemicals and cement. The third factor is low confidence, stemming from geopolitical and policy uncertainty, i.e. potential turnover in governments, populism, taxation policy, minimum wages and mixed signalling over regulation…Finally, there is technology. Digitisation – including physical devices being replaced by software…However, the ubiquity of technology and the disruptive competition it enables is increasingly pushing incumbents to invest in new types of assets in order to upgrade and catch up to new competition.

    On a sectoral basis, Goldman sees divergent trends for 2016-19E.

    13 global sectors are expected to grow capex over the next three years, while five are set to shrink total spending. This divergence is evident across regions…(for example) US shale producers are expected to continue spending on supply growth (+5%), while Big Oil in Europe pares back (-5%). After years of building out capacity, Chinese utilities are focused on improving utilisation rates and rationalising spending (-7%)…and within sectors; speciality retailers in the West are upgrading to better compete in an omnichannel world (+8%), even as food retailers remain under pressure from discounters and Amazon (0%). Traditional carrier capex is only expected to grow 1% yoy in 2017 and in 2018 as the recent capex cycle comes to an end, but within that, cable and cloud-related capex should continue growing rapidly”

    Which it summarises in a heat map…

    Here’s the difficult bit…

    Picking winners and losers from the analysis is more complex these days, as Goldman laments.

    In the absence of mammoth capital investment upcycles such as the commodity boom, EM infrastructure build-out or a telecom upgrade cycle, identifying capex winners in today’s economic backdrop is a much more nuanced exercise and requires us to delve into sector-specific and company-specific drivers.

    Paraphrasing Goldman’s findings, one problem is that capex is not what it was. For example, it can’t be assumed that investment in excess of depreciation is simplistically equated with “growth capex”. Goldman explains…

    In many sectors, this increase in capex, over and above depreciation, is not expansionary, but defensive in nature; companies are spending more on capex to fight against disruptive competition and counter regulatory costs.

    In the “Spending to defend” category, for example, Goldman lists the following sectors:

    • Auto OEMS;
    • Utilities; and
    • Retail

    On the other side of the “ledger”, Goldman identifies four “buckets of winners” which are.

    • Returns accretive capex;
    • Prudent spenders;
    • Value chain beneficiaries; and
    • R&D winners.

    Companies undertaking “Returns-accretive capex” to drive revenue growth are “relatively scarce”, although, unsurprisingly, Tech features prominently. However, the next statistic in Goldman’s report about concentration in tech spending raised our eyebrows.

    The spike in software and semis capex can be attributed to large tech companies investing to tap new, and often capex-intensive, end markets. With c.US$18 bn between them, four firms – Alphabet, Facebook, Alibaba and Microsoft – will account for c.70% of the growth in capex for our global coverage of 190 software companies between 2016 and 2019E, as they venture into more asset-heavy businesses such as autos, retail and cloud.

    Goldman lists 33 global companies where its analysts expect capex to increase by at least 5% in 2017-19 versus 2015-17 and increase CROCI by 2%.

    In the “Prudent spenders” category, Goldman identifies.

    • Big Oil companies;
    • European telecoms;
    • Chinese utilities; and
    • Subsectors such as Casinos, Tyres, Brazilian beer and Materials

    Goldman’s “Value chain beneficiaries” are capex enablers which benefit from the spending of others (e.g. their customers), no matter what the motivation for that spending is. In this category, Goldman lists eleven companies.

    Finally, there are the “R&D winners”, who are spending on innovation. We were interested to learn that the five biggest R&D spenders globally in 2015 were VW, Samsung, Intel, Alphabet and Microsoft. This category is also plagued by “growth versus defensive” issues and the “quality” of spend. Goldman publishes a list of companies where its analysts are positive based on “R&D strategy and productivity”. High-profile names on the list include Facebook, ASML, Applied Materials and Mazda.

    So, a faster rate of global capex growth is the good news. The bad news is that some traditional sectors are investing to survive and will dilute their return on invested capital in the coming years.

    One of Goldman’s charts sparked another thought.

    This economic cycle is long in the tooth and corporate capex in the chart above betrays more than a little propensity to be pro-cyclical.

  • Trick Or Treat: One Year Later, Is Trump A Blessing Or A Curse To The Deep State?

    Authored by John Whitehead via The Rutherford Institute,

    Has Donald Trump been a blessing or a curse to the architects of the American police state?

    One thing is for sure: a year into his presidency, Trump hasn’t done much to improve the lot of the American people.

    The predators of the police state are still wreaking havoc on our freedoms, our communities, and our lives.

    The government still doesn’t listen to the citizenry, it still refuses to abide by the Constitution, which is our rule of law, and it still treats the citizenry as a source of funding and little else. Police officers are still shooting unarmed citizens and their household pets. Government agents—including local police—are still being armed to the teeth and encouraged to act like soldiers on a battlefield. Bloated government agencies are still fleecing taxpayers. Government technicians are still spying on our emails and phone calls. Government contractors are still making a killing by waging endless wars abroad.

    In other words, the American police state is still alive and well and flourishing.

    Nothing has changed.

    Rather than draining the corrupt swamps of Washington, as he repeatedly promised, Trump and his brand of reality TV politics have merely redirected our attention.

    Trust me, the swamps are still stagnant with corruption.

    Indeed, we are still the unwitting victims of a system so corrupt that it spans all branches of government.

    We are still ruled by an elite class of individuals who are completely out of touch with the travails of the average American.

    We are still viewed as relatively expendable in the eyes of government: faceless numbers of individuals who serve one purpose, which is to keep the government machine running through our labor and our tax dollars.

    We are still being made to suffer countless abuses at the government’s hands.

    We still have little protection against standing armies (domestic and military), invasive surveillance, marauding SWAT teams, an overwhelming government arsenal of assault vehicles and firepower, and a barrage of laws that criminalize everything from vegetable gardens to lemonade stands.

    In other words, despite Trump (or because of him), freedom—or what’s left of it—is still being threatened from every direction.

    Trump has done nothing to wrest control of the government from the Deep State, that shadowy elite group of powerbrokers and corporations who call the shots in Washington.

    Trump has done nothing to prevent the government from continuing to plunder and steal from the American taxpayer. In fact, his administration has paved the way for even more theft in the form of civil asset forfeiture.

    Trump has failed to end the government’s endless wars. To the contrary, he has fallen in line with the military industrial complex.

    Most of all, Trump has proven to be as deaf, dumb and blind as every president before him when it comes to the plight of the citizenry.

    The new boss really is just the same as the old boss.

    We’re still on the losing end of a tug-of-war over control of our country and our lives.

    The Deep State is winning.

    Get ready.

    We’re just a few short years away from the dystopian future depicted in the film V for Vendetta, which is no future at all.

    Written and produced by the Wachowskis, V for Vendetta (2005) provides a powerful visual commentary on how totalitarian governments such as our own exploit fear and use mass surveillance, censorship, terrorism, and militarized tactics to control, oppress and enslave.

    The lesson is this: once a free people allows the government to make inroads into their freedoms or uses those same freedoms as bargaining chips for security, it quickly becomes a slippery slope to outright tyranny.

    In other words, it makes no difference whether it’s a Democrat or a Republican at the helm, because the bureaucratic mindset on both sides of the aisle now embodies the same philosophy of authoritarian government, whose priority is to remain in power.

    So where does that leave us?

    In V for Vendetta, it takes a desperate act of terrorism (V blows up the seat of government on the fifth of November) for the people to finally mobilize and stand up to the government’s tyranny.

    This is what happens when a parasitical government muzzles the citizenry, fences them in, herds them, brands them, whips them into submission, forces them to ante up the sweat of their brows while giving them little in return, and then provides them with little to no outlet for voicing their discontent: people get desperate, citizens lose hope, and lawful, nonviolent resistance gives way to unlawful, violent resistance.

    Do not wait to act until there is no alternative but violence.

    We’ve got to make the government hear us using every nonviolent means available to us: picket, protest, march, boycott, speak up, sound off and reclaim control over the narrative about what is really going on in this country.

    Mind you, the government doesn’t want to hear us. It doesn’t even want us to speak. In fact, it’s done a diabolically good job of establishing roadblocks to prevent us from exercising our First Amendment right to speech and assembly and protest.

    Still we must persist.

    For starters, stop worshipping false idols. Stop waiting for Trump to drain the swamps, or some whistleblower to topple the tyrants, or some other political savior to swoop in and fix all that’s wrong with this country. Stop allowing yourselves to be drawn into divisive party politics. Stop thinking of yourselves as members of a particular political party, as opposed to citizens of the United States. Most of all, stop looking away from the injustices and cruelties and endless acts of tyranny that have become hallmarks of American police state.

    Remember, remember the fifth of November, warns V for Vendetta.

    Why should we remember the fifth of November?

    Because it commemorates a day in history when a desperate vigilante tried to bring about a violent revolution.

    Trust me, no one wants a violent revolution.

    Americans speak reverently of how our founders mounted a revolution to secure our freedoms, but our platitudes gloss over the terrible toll it demanded of them: families torn apart, lives lost and years of misery and hardship.

    As I make clear in my book Battlefield America: The War on the American People, the moral choice before us is clear: it is the choice between tyranny and freedom, dictatorship and autonomy, peaceful slavery and dangerous freedom, and manufactured pipedreams of what America used to be versus the gritty reality of what she is today.

  • Connecticut Becomes Last State To Pass A Budget After 123-Day Battle

    Four months after the beginning of the fiscal year, Connecticut has become the last state in the US to pass a budget after Democratic Gov. Dannel Malloy signed a bipartisan budget bill, but used his line-item veto power to block a section of the nearly 900-page document related to the controversial hospital tax.

    The deal marks the culmination of a bitter struggle between Malloy and lawmakers in both chambers of the CT legislature as they struggled to close a $3.5 billion two-year budget deficit. Fiscal problems have plagued the state since the financial crisis thanks to its overly generous benefits from state employees that have left its pension accounts dangerously underfunded. Malloy was effectively frozen out of the budget negotiations after vetoing a bipartisan budget that was sent to his desk in late September.

    “After 123 days without a budget, it is time to sign this bipartisan bill into law and continue the steady and significant progress our state has made over the past several years,” Malloy said.

     

    “Connecticut’s families and businesses deserve to have a budget in place, one that provides a stable environment to live and work,’’ Malloy said.

     

    “While there are certainly many provisions of this budget I find problematic, there’s also a clear recognition of many of the fiscal priorities and concerns I’ve consistently articulated since January. I appreciate the work of the General Assembly in passing a budget to my desk that I can sign.”

    The budget battle became the longest such stalemate in Connecticut history, surpassing the epic, summer-long fight to create the state income tax that ended on Aug. 22, 1991.

    Connecticut was the last of nearly a dozen states that experienced last-minute budget battles in May and June ahead of the end of the fiscal year. Many of those states – as a senior official at S&P Ratings warned at the time – were struggling with festering budget problems and woefully underfunded employee pension programs that the official characterized as “chronic budget stress.”

    The battles triggered government shutdowns in Maine and New Jersey, and nearly triggered a ratings downgrade in Illinois after the state legislature and Gov. Bruce Rauner blew past a deadline set by the ratings agencies to pass what became the state’s first budget in more than two years.

    Malloy finally expressed his frustration with the drawn-out process, which cast a shadow over his final months as governor after he announced last year that he wouldn’t seek a third term, given his low popularity rating after eight years in office and two tax hikes.

    “There’s nothing in this budget that couldn’t have been done in June or May,’’ he told reporters during a mid-afternoon press conference at the state Capitol. “People in the state of Connecticut are rightly frustrated by how long this has taken.’’

    But according to the Courant, Republican leaders said that it took a veto by Malloy in September and then extensive negotiations for them to get a constitutional spending cap on expenses and a bonding cap on construction projects as part of the final budget deal.

    Republicans also obtained changes to the binding arbitration system and to the “prevailing wage’’ on local construction projects as part of a comprehensive, bipartisan compromise.

    However, the battle isn’t finished just yet. Senate Republican leader Len Fasano said legislators would return to the capitol in the next two weeks to either override Malloy’s line-item veto of the hospital provider tax, or vote on an amendment to fix language regarding the hospital provider tax. In the days before signing the budget, Malloy complained that the budgetary language regarding the hospital tax contained significant flaws – which he characterized as oversights by the bill’s writers – that could cost Connecticut $1 billion over two years. Malloy said that unless language about an increase in the hospital tax was changed, the state risked losing out on hundreds of millions of dollars in federal Medicaid funding.

    However, as Fasano pointed out, lawmakers have been skeptical of these claims.

    Even if Malloy had vetoed the bill, the House and Senate had enough support for the bipartisan budget to force it through.

    Connecticut’s constitution gave Malloy until Wednesday to act on the $41.3 billion two-year spending plan. If no action were taken, the bill would've automatically become law. As the Courant pointed out, the budget closes a $3.5 billion deficit without significant income tax or sales tax increases, but cuts municipal aid, funding for the University of Connecticut and eliminates the property tax credit for many homeowners. It also includes a new surcharge on motor vehicle registrations to fund the operations of state parks. It would raise the state's tax on cigarettes by 45 cents per pack and reduce a tax credit designed to help the working poor. And it would assess a new fee on all rides booked through Uber and Lyft.

    Connecticut has struggled with deteriorating finances for much of Malloy’s tenure in office – a problem made worse over the last year by the departures of three high-profile companies – GE, Aetna and Alexion Pharmaceuticals. Back in May, S&P became the last of the big three ratings firms to cut Connecticut’s debt into single-A territory.

    The budget provides relief for Connecticut’s troubled capital, Hartford, which city officials had warned would’ve been facing a bankruptcy filing by year’s end if it couldn’t secure relief from either its creditors or the state.

    The budget deal greenlighted by the General Assembly Thursday calls for the capital city to receive at least $40 million in additional revenue, half from an account set aside for distressed municipalities, and half through state-subsidized debt payments – meaning that taxpayers across the state are picking up a $20 million tab for Hartford debt relief.

    Despite the relief, city leaders will continue to negotiate with bondholders and employee unions, Mayor Luke Bronin said, according to the Courant.

    While the elimination of the $3.5 billion deficit is an important development, unfortunately it’s not a cure-all: Funding ratios for the state’s public-employee pensions are still among the lowest in the country by market value:

     

  • Tony Podesta Threatens Tucker Carlson After Bombshell Report On Russian Influence Peddling

    Submitted by iBankCoin

    Tony Podesta sent a Cease and Decist letter to “Tucker Carlson Tonight” hours after resigning from his role at the Podesta Group – a D.C. lobbying firm accused by a former executive of pedaling Russian influence along with fellow lobbyist and short-lived Trump campaign manager Paul Manafort.

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    Watch:

    The Cease and Desist letter sent by Podesta:

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    Manfort was indicted over the weekend on 12 counts ranging from tax fraud, money laundering and giving false statements between 2006 and 2015, and is currently under house arrest after turning himself over to the FBI Monday morning – fueling speculation as to whether Tony Podesta’s sudden departure from his firm is connected.

    Of note, Monday's indictment lists "Company A" and "Company B" as firms involved in the investigation – which NBC reports are the Podesta Group and DC public relations firm Mercury Public Affairs.

    Last week Carlson reported that Tony Podesta is a central figure in Special Counsel Robert Mueller’s investigation. Directly after his report, Carlson’s show was contacted by a former long-time executive of the Podesta Group with “direct personal knowledge” of Tony Podesta’s questionable activities, which Carlson divulged the next evening.

    While the nature of Podesta’s threat has not been made public, Carlson later tweeted “We’re confident the Mueller probe will reveal a lot more about Tony Podesta’s lobbying practices in the near future.”

    To review:

    After meeting with the former Podesta Group executive who has been “extensively” interviewed by Robert Mueller’s Special Counsel, Tucker Carlson Tonight relayed several highly troubling aspects of the Tony Podesta’s relationship with business associate and fellow lobbyist, Paul Manafort.

    According to the former Podesta Group executive, Manafort and Tony Podesta were running a Russian influence-peddling racket up and down Washington D.C., bringing a “parade” of Russian oligarchs to congress for meetings. Podesta was also “Basically part of the Clinton Foundation,” meeting regularly to discuss the now-infamous Uranium One deal.

    Highlights, as previously reported (video below):

    • Lobbyist and temporary Trump campaign manager Paul Manafort is at the center of the Russia probe – however the scope of the investigation has broadened to include his activities prior to the 2016 election.
    • Manafort worked with the Podesta Group since at least 2011 on behalf of Russian interests, and was at the Podesta Group offices “all the time, at least once a month,” peddling Russian influence through a shell group called the European Centre for a Modern Ukraine (ECMU).
    • Manafort brought a “parade” of Russian oligarchs to congress for meetings with members and their staffs, however, the Russia’s “central effort” was the Obama Administration.
    • In 2013, John Podesta recommended that Tony hire David Adams, Hillary Clinton’s chief adviser at the State Department, giving them a “direct liaison” between the group’s Russian clients and Hillary Clinton’s State Department.
    • In late 2013 or early 2014, Tony Podesta and a representative for the Clinton Foundation met to discuss how to help Uranium One – the Russian owned company that controls 20 percent of American Uranium Production – and whose board members gave over $100 million to the Clinton Foundation.
    • “Tony Podesta was basically part of the Clinton Foundation.”
    • Believing she would win the 2016 election, Russia considered the Podesta Group’s connection to Hillary highly valuable.
    • Podesta Group is a nebulous organization with no board oversight and all financial decisions made by Tony Podesta. Carlson’s source said payments and kickbacks could be hard for investigators to trace, describing it as a “highly secret treasure trove.” One employee’s only official job was to manage Tony Podesta’s art collection, which could be used to conceal financial transactions.

    Full monologue below: 

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    Follow on Twitter @ZeroPointNow

  • Welcome To The Offended States Of America

    Authored by Daisy Luther via The Organic Prepper blog,

    If you know something is going to upset you, why would you deliberately put yourself in a situation in which you will be angered, saddened, or hurt? There’s no other answer except that you actually want to be offended.

    Why would you go to George Washington’s church if you’re offended by George Washington? Why would you attend the university founded by Thomas Jefferson if you are offended by Thomas Jefferson?

    Why do we live in a world in which the offended people get to make the rules when they deliberately propel themselves into places that are certain to offend them? It’s so blatant of late that I am positive they’re doing it on purpose. We no longer live in the United States of America. We live in the Offended States of America.

    Take George Washington. Wait – I didn’t mean that literally!

    I’ve never seen anything so ridiculous in my life as the historic church founded by George Washington taking down the memorial of George Washington. I was gobsmacked.

    “The plaques in our sanctuary make some in our presence feel unsafe or unwelcome,” the church leaders said, according to The Washington Times. “Some visitors and guests who worship with us choose not to return because they receive an unintended message from the prominent presence of the plaques.” (source)

    Even the Google listing promotes the history of the church.

    And it isn’t like people have no option but to attend Christ Church. This is a map of the other Episcopal churches in the area.

    By my count, there are 21 different churches of that denomination right there in the Alexandria, Virgina area, so, honestly, I don’t think I’m being outrageous when I suggest that there are multiple options to attend an Episcopalian service in a church that George Washington did not found if one is outraged by the existence of George Washington.

    This is even worse than tearing down every last vestige of Southerners who fought in the Civil War. (Here’s why I think that removing Civil War memorials is baloney.) While I don’t think any of those monuments should be removed, at least it makes a smidgeon of sense if they’re in a public place. But these people went to a church famous for its attendance by George Washington and Robert E. Lee and then got mad about it.

    This underlines my belief that there are some people who want nothing more than to find something by which they can be offended. They must actually search out a setting and put themselves into it deliberately so that they can share their outrage with the world. This virtue-signaling, politically correct melodrama is a symbol of everything that is wrong with the world. People get attention from their outrage. They become famous amongst the other virtue-signallers who then jump on the Outrage Express about something that had never even crossed their minds before.

    Our college campuses are rife with it as students are brainwashed by professors promoting violent sedition into resisting perceived “fascism” with the goal of changing our country into a Communist one. You’re worried about fascism, boys and girls? If you somehow succeeded in your overthrow of the Trump/Pence administration, you’d have it in spades in your ridiculously idealized Commie utopia.

    And what about your privilege?

    Everyone is cast in either the role of victim or victimizer. They are either the privileged or the downtrodden. In this tunnel-visioned world, men are privileged as long as they aren’t black, and then they’re probably going to prison through no fault of their own. Caucasian people need to check their white privilege, smart people need to check their cognitive privilege, and holy guacamole, according to this article, there are a metric ton of privileges we need to look out for. In case you aren’t sure if you are part of the privileged class or the victim class, here’s a handy list from the article. This way you can identify your privilege and check it.

    • Ability: Being able-bodied and without mental disability
    • Class: Class can be understood both in terms of economic status and social class, both of which provide privilege. Social class can determine access to opportunities, to participation in politics, and opens up particular educational and vocational doors more easily.
    • Education: Access to higher education confers with it a number of privileges as well. Educational privilege opens a number of doors to higher paying careers (which links it to social class privilege).
    • Gender: Male-identified, masculine individuals still hold a level of privilege over people of other genders. Another word for the systemic operation of male privilege is “patriarchy”.
    • Gender Identity: While often linked to sexual orientation and gender privilege, this is the privilege that comes with having a gender identity (how one identifies and express oneself in gendered terms) that conforms to the gender identity that was assigned at birth and to societal and cultural expectations of such a gender identity.
    • Passing: Passing is the ability to appear to belong to another group. The ability to pass is itself a privilege because it allows an individual to claim the advantages of a more privileged group.
    • Racial: In the West, racial privilege is usually equated with white privilege since power, money, and influence tends to be concentrated among Caucasians in Western Europe and North America.
    • Religious: Religious privilege comes with being a member of the dominant religion in a culture – to have one’s own religious practices and observances recognized as the norm.
    • Sexuality: Heterosexual privilege includes the assumption that everyone is heterosexual which forces Queer people to be constantly undergoing a coming out process in their daily lives…Sexuality privilege also includes sexual practices and sexual history – the media often associates a woman’s worth with her sexual history through the hypersexualization of women, but also by relating a girl’s self-worth to her chastity and the public disparagement of women who are sexually active. This links sexuality privilege to gender privilege as well. (source)

    Welcome to the Offended States of America

    Literally, no one can win because if you win, someone will be offended. We have become a nation where no one is anyone if someone hasn’t offended them.

    Personally, I’m offended by the constant barrage of offenses, and this isn’t the first time I’ve written about the outrageous level of outrages.

    Words to express our affront are being made up left and right by the mere addition of “ism” to the ends of what were formerly perfectly neutral words. It seems like pundits can take basically any word and add “ism” to the end of it and that means they’re being slighted. The list of isms could go on and on, but instead of promoting more equality, all they’re doing is promoting more division. Isn’t that divisionism?

     

    Personally, I’m affronted by the constant barrage of affronts. When did we, as a nation, become such weenies? How is it that such a collection of whiners has become the vocal majority? Certain people are constantly offended and demand the attention of others so they can express the epic level of their personal offendedness.

     

    So vast is the recent level of Great American Butthurt that no mainstream news outlet is complete without breathlessly exposing a secret “ism” each day. These secret “isms” are called “microaggressions,” defined as “the everyday verbal, nonverbal, and environmental slights, snubs, or insults, whether intentional or unintentional, which communicate hostile, derogatory, or negative messages to target persons based solely upon their marginalized group membership.” (source)

    Why stop with the Founding Fathers?

    Now that we’re taking down all the statues of previous figures in history that offend us, let’s really get on a roll and fix this country. I think we should throw into the wormhole any movie produced by Harvey Weinstein since he was a sexual predator. And anything touched by any of those other people recently accused of being harassers? All of that needs to go, too. Don’t think Hollywood isn’t scrambling before someone demands it. Will that whole industry go down in flames because of the pervs who couldn’t stop raping and fondling women without consent?

    I’m not making light of their crimes. Like most women, I’ve been on the receiving end of sexual harassment when I was in the workforce, and it’s horrible. But what I’m saying is, where does it end?

    Who has not committed some act that made others feel bad? Should all of their contributions to society, entertainment, or enlightenment be ignored because they did something bad or were even wholly awful people? If something is accepted as common during a specific era, who are we to demonize them centuries later?  Where is the line drawn between people who must be erased from history and people who are foul individuals that still get to have their accomplishments present?

    Find me more than a handful of our current politicians who don’t have repugnant secrets, who haven’t abused their power, who haven’t sold out to industries that are willfully poisoning us all to make a buck, or, by golly, erase every vote they have ever cast. Undo the laws that they sponsored. Tar and feather them and remove any mention of them forever. Think about it, we have the freaking William J. Clinton Library and Museum, and he was a serial harasser, womanizer, and cheater. I demand that library be renamed for someone who was perfect…or just be called The Library unless that offends illiterate people. Does this make me a readerist? Please don’t take my books away.

    If our nation could be powered by offendedness, we would no longer have a need for fossil fuels. If we could earn money from outrage, we could finally correct that pesky national debt.

    But until then, could we please put a lid on it before all we have left is a country completely bereft of history and culture?

  • Previewing Wednesday's Fed Policy Decision: The Week's Biggest Non-Event

    While normally Wednesday’s Fed meeting would be the week’s biggest market-moving event, this time – smack in the middle of the busiest earnings week of the year – it may not even make the top three, buried ahead of the coming news of the next Fed Chair (in which Trump is set to unveil Jerome Powell on Thursday), and the GOP tax bill (which just saw its Wednesday release delayed by one day). One can make the argument that tomorrow’s fully priced in FOMC announcement is also secondary to not only Friday’s jobs report, which may help decide who is right, the Fed’s “dots” or the market, but also to tomorrow’s Treasury refunding announcement.

    In fact, the latter is precisely what JPM analyst Jay Barry claimed earlier today, saying the “quarterly refunding announcement at 8:30am ET Wednesday “has the possibility to be a bigger event for markets in the morning than the Fed statement in the afternoon” and since market are “priced for a December hike,” the FOMC meeting isn’t likely to alter expectations in a way that would move the market. Where there is confusion is in the Treasury market, where market participants are divided on whether the Treasury will announce increases to coupon auction sizes Wednesday, or wait until the 1Q refunding announcement in February: “There’s a dispersion of views because of the pivot the Treasury Department has had over last few years,” specifically toward portfolio metrics and aiming to extend the weighted average maturity of the portfolio. Merely reversing the cuts that have been made to 2Y and 3Y auctions since 2013 wouldn’t serve that objective.

    “If they don’t get announced tomorrow, it’s a muted rally, and if they do, it’s a muted steepening, but I think it’s all small because the numbers we’re talking about are only $1 billion month, and because Treasury has been clear in communicating that financing needs are moving higher over the medium term”

    Ok so, while hardly the market terror of years and months gone by, at least we one can agree that tomorrow’s FOMC Monetary Policy decision will be somewhat important, ranking behind the Fed Chairman choice, the unveiling of the GOP tax proposal, Friday’s payrolls report, and tomorrow’s Treasury refunding announcement… oh and whatever the latest episode in the Mueller drama reveals.

    So what will the Fed say tomorrow? Here consensus is uniform: all those surveyed expect the FOMC to leave its monetary policy settings unchanged this time out, and punt to December when markets are almost fully pricing in a 25bps hike in December. Additionally, tomorrow’s meeting is one of the especially boring ones, as there will be no updated economic projections, nor will there be a press conference from Fed Chair Janet Yellen.

    Below we present several other observations what to expect tomorrow from RanSquawk:

    • Last time out the Fed formally outlined and announced the implementation of its balance sheet unwind programme, no further guidance on the long-run framework for the balance sheet is anticipated in the upcoming statement.
    • Since then Fedspeak has come to the fore. UBS suggest that “recent Fedspeak has shown an eagerness to move at the December meeting, but given the touch more concern about low inflation relative to earlier this year, participants would prefer to see some more evidence of inflation rising before moving again.”
    • On the inflation front, headline CPI pushed up to 2.2% Y/Y in September, the core metric stood at 1.7% Y/Y for the fifth consecutive month, while core PCE stands at 1.3% Y/Y. The latest US labour market report pointed to an uptick in wages, although it will be several months before we can assess if this was a “one-off” hurricane induced jump, or the start of a broader trend.
    • Looking forwards CME Fed Fund Futures are virtually fully pricing in a December hike, with one additional hike 75% priced in by the end of September 2018 N.B. the Fed’s median estimate looks for 3 hikes in 2018.

    Below is an abbreviated take of what Wall Street’s various sellside desks are saying about tomorrow’s FOMC snoozer :

    BAML: We don’t expect fireworks. Since we will only receive the statement and not an updated Summary of Economic Projections or press conference, there are few opportunities for the FOMC to send a signal to the markets about the future direction of policy. Importantly, we do not expect the Fed to explicitly signal a hike in the upcoming meeting on December, as the market is already pricing in an over 80% probability of a hike. There will likely be small language changes, particularly in the first paragraph regarding the economic outlook. It is likely that the FOMC notes that the data have been volatile due to disruptions from the hurricanes and that the Committee is not reacting to such short-term fluctuations. We think they will reiterate that “past experience suggests that the storms are unlikely to materially alter the course of the national economy over the medium term.” We do not expect changes to the characterization of inflation or the risk statement. The FOMC is likely to maintain the language that “near-term risks to the economic outlook appear roughly balanced, but the Committee is monitoring inflation developments closely.”

    Barclays: We expect the FOMC to leave its target range for the federal funds rate unchanged at 1.00%-1.25% at the November meeting as it continues to evaluate to what degree recent disinflation is temporary or persistent. The  committee, in our view, is likely to look favourably at the underlying components of the Q3 GDP report which showed a positive contribution to growth from both net exports and inventories; we see trends in these categories as reflecting the synchronized global growth backdrop. Distortions to domestic data from the hurricanes that made landfall in August and September are likely to be ignored.

    BMO: We look for no change in the Fed’s policy rates or forward guidance. However, in likely talking a bit more upbeat about the economy, the Fed will signal that December’s SEP-and-presser-packing confab could see a rate hike. There is clearly more slack in the labour market than the headline jobless rate portrays, and the culprits are some of the many reasons why the real neutral fed funds rate might still be close to zero. Other reasons include the non-idiosyncratic factors contributing to a below-target PCE inflation rate of 1.5% y/y (with core at 1.3%). However, with the broad economy, on balance, now at full capacity, the current nominal fed funds rate should be closer to the 1.3%-to-1.5% range to minimize the risk of overshooting the inflation target, while still maintaining an accommodative policy stance from a longer-run perspective.

    Deutsche Bank: With market expectations running very much in line with the FOMC’s latest median projection of a rate hike in December, the FOMC will have little reason to either amplify or alter its message in the November statement. We expect an uneventful outcome, with primary focus on the tea leaves in the first two paragraphs: i.e, in how the Committee sees recent and prospective economic developments. On balance, we expect that the economic picture has not changed enough to alter the Committee’s central expectation that it will be raising rates another 25 bps in December, and recent Fedspeak from Chair Yellen and others has not tried to modify that perception. With inflation still running low, we expect the statement to continue to say that “the Committee is monitoring inflation developments closely,” and in our post-meeting assessment, we will take a look at what it might take to change the expected outcome for December.

    HSBC: There are unlikely to be any major policy surprises delivered at this meeting, we continue to expect the next 25bps rate hike to come in December. The policy statement may repeat that Hurricanes Harvey, Irma, and Maria disrupted near-term economic activity but are unlikely to impact the medium-term outlook for the economy. The statement will also likely reiterate the Committee’s view that inflation may remain somewhat below 2% in the near term but should stabilise close to 2% over the medium term. It is possible the policy statement released after this meeting will note that the balance sheet normalisation programme has commenced.

    ING: Financial markets remain sceptical over the Federal Reserve’s predictions for the path of monetary policy. Uncertainty over whether Janet Yellen will remain the Chair, low inflation and some concerns about a potential government shutdown in December goes some way to explaining this. However, with Fed officials broadening out the factors justifying tighter monetary policy, such as financial stability and financial conditions, and with growth looking strong and inflation edging higher, we think a December rate hike looks probable.

    RBC: On the FOMC statement, practically speaking there is little that needs to change. There were no significant economic developments over the intermeeting period, balance sheet tapering is on automatic pilot (at least for the time being), and the next hike (which the market seems fully braced for) will not come until December. This all suggests no material changes to the statement.

    * * *

    Elsewhere, and more importantly, the Trump Administration will announce its nominee for the role of Fed Chair on Thursday. Current Federal Reserve Governor Jerome Powell appears to be the front runner, and is seen as the logical replacement to current Chair Yellen by many, with the perception that he would provide a steady continuation of the monetary policy implemented under Yellen. John Taylor appears to be the only other name in major contention at present. Taylor is perceived as a more hawkish candidate owing to his Taylor Rule (which suggests that rates should be perhaps as high as 4.00%), although many have argued that he would not have portrayed such a hawkish view to US President Donald Trump in his interview. One outsider still rumoured to be in the mix (according to Politico sources at least) is former Fed Governor Kevin Warsh, who also falls on the hawkish side of the spectrum. It is also worth remembering that three of the seven seats on the board are vacant at present.

    How to trade this announcement? Easy, at least according to Morgan Stanley: just fade the kneejerk reaction in the market and do the opposite.

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Today’s News 31st October 2017

  • Paul Craig Roberts Goes There: "One Day, Tomorrow Won't Arrive"

    Authored by Paul Craig Roberts,

    Before the idiots in Washington get us blown off of the face of the earth, the morons had better come to terms with the fact that the US military is now second class compared to the Russian military.

    For example, the US Navy has been made obsolete by Russia’s hypersonic maneuvering Zircon missile.

    For example, the speed and trajectory changes of the Russian Sarmat ICBM has nullified Washington’s ABM system. One Sarmet is sufficient to take out Great Britain, or France, or Germany, or Texas. It only takes a dozen to wipe out the United States.

    Why don’t you know this?

    For example, Washington’s enormously expensive F-35 jet fighter is no match whatsoever for Russian fighters.

    For example, US tanks are no match for Russian tanks.

    For example, Russian troops are superior in their combat readiness and training and are highly motivated and not worn out by 16 years of pointless and frustrating wars over no one knows what.

    If the US ends up in a catastrophic war with a militarily superior power, it will be the fault of Hillary Clinton, the DNC, former CIA director John Brennan and the military/security complex, the presstitute media, and the American liberal/progressive/left, which, made completely stupid by Identity Politics, has allied with neoconservative warmongers against President Trump and prevented Trump from normalizing relations with Russia.

    Without normal relations with Russia, nuclear Armageddon hangs over us like the sword of Damocles.

    Do you not agree that it is outrageous, astounding, inexcusable, inexplicable, reckless and irresponsible that the Democratic Party, the print and TV media, the military/security complex that is supposed to protect us, and the liberal/progressive/left are working hand in glove to destroy the human race?

    Why is there so much opposition to normalizing relations with a nuclear power? Why did even the Greens jump on the anti-Trump propaganda bandwagon. Don’t the Greens understand the consequences of nuclear war?

    Why is there such a crazed, insane effort to eject a president who wants to normalize relations with Russia?

    Why are these questions not part of the public discourse?

    The failure of political leadership, of media, of the intellectual class in America is total.

    The rest of the world must find some means of quarantining Washington before the evil destroys life on earth.

  • Crypto Mania – Why "It Is Currently Rational To Be Irrational"

    Following JP Morgan CEO, Jamie Dimon’s, now infamous rant about Bitcoin being a fraud, a great product for criminals and having no value, Adam Ludwin, CEO of Chain.com, wrote “A Letter to Jamie Dimon”, which received some coverage in the financial media for its balanced discussion regarding the outlook for cryptocurrencies.

    In his letter, Ludwin noted…

    In short: there’s a lot of noise. But there is also signal.

     

    To find it, we need to start by defining cryptocurrency. Without a working definition we are lost. Most people arguing about cryptocurrencies are talking past each other because they don’t stop to ask the other side what they think cryptocurrencies are for.  

     

    Here’s my definition: cryptocurrencies are a new asset class that enable decentralized applications. If this is true, your (Jamie Dimon’s) point of view on cryptocurrencies has very little to do with what you think about them in comparison to traditional currencies or securities, and everything to do with your opinion of decentralized applications and their value relative to current software models. Don’t have an opinion on decentralized applications? Then you can’t possibly have one on cryptocurrencies yet…And since this isn’t about cryptocurrencies vs. fiat currencies let’s stop using the word currency. It’s a head fake. It has way too much baggage and I notice that when you talk about Bitcoin in public you keep comparing it to the Dollar, Euro, and Yen. That comparison won’t help you understand what’s going on. In fact, it’s getting in the way.

    Back in your box, Jamie.

    As Forbes reports, Ludwin was invited to speak at a recent SEC meeting…

    The Securities and Exchange Commission Investor Advisory Committee held a public meeting regarding blockchain and distributed ledger technology earlier this month, and one of the individuals who was invited to participate in the meeting was Chain CEO Adam Ludwin. During his opening remarks, Ludwin shared his perspective on the entire blockchain ecosystem (both public and private models), but the most compelling part of his appearance may have been when he shared his views on the current price mania around cryptocurrencies and initial coin offerings (ICO).

     

    “I think you have to look at it from the perspective of the buyer and the seller mentality,” Ludwin said of the current digital asset market. “In essence, it is currently rational to be irrational as a buyer [or] a seller in this market.

    In Ludwin’s opinion, the buyers of ICOs are either people who made tons of money in Bitcoin/Ethereum or people who missed Bitcoin/Ethereum, because they didn’t understand them, so have resorted to buying tokens they don’t understand either.

    When discussing the kinds of people who are participating in ICOs and token crowdsales during his appearance at the public meeting, Ludwin was quick to point to those who have already made large sums of cash by speculating on the prices of bitcoin and ether over the past few years. “On the buyer side, there are many, many people who invested early in bitcoin, made a tremendous amount of money and now have, effectively, a house money effect weighing on them where it’s found money — it’s a windfall — and they’re diversifying into every new project that comes along because: Why not?” explained Ludwin.

    “If you’ve made money, you might as well say, ‘I’ll keep going.’” Ludwin also pointed to those who sat on the sidelines while bitcoin and ether went up a hundredfold or more because they didn’t understand the technology as probable buyers of new digital assets.

     

    “Now, you almost have this inverted mindset where you tell yourself, ‘Alright, I have to look for things I don’t understand, and the more confusing it is, the better investment it probably is,’” said Ludwin. “It’s a very perverse mentality, obviously.”

    As for the sellers of ICOs, Ludwin explains why it’s even crazier than the dot.com boom.

    From Ludwin’s perspective, the irrational exuberance from the buy side of the market has led to the creation of many new projects willing to meet that demand. The Chain CEO shared three reasons as to why it’s extremely tempting for individuals and teams to create, issue, and sell new cryptocurrencies. “Number one, there’s no dilution (it’s not equity in the traditional sense) and there’s no debt — you don’t have to pay it back,” said Ludwin.

     

    “People are buying for the appreciation expectations. It’s really free financing; it’s a remarkable instrument. [Secondly], there’s a belief out there that, by selling tokens, you’re creating evangelists for your project and they will tell their friends [about it]. And the truth is that’s probably right. People are interested in spreading the news about a new token in order for their tokens to go up in price and the sellers do have a kind of product/market fit. Of course, the thing that people are buying is a dream of making money, not interest in the underlying service usually. Finally, there’s an ability now by issuing these tokens to actually exit before you start. Normally, when you build a company, the exit comes at the end (and that’s why it’s called the exit). Here, if you issue a token and you can clear tens of millions of dollars before your project even launches, it’s an even better deal than we had in the 90s [dotcom bubble].”

    Forbes comments on how many ICOs are merely exploiting Ethereum’s ERC-20 standard. 

    The perfect example of the inability for some companies or projects to resist the urge to do their own ICO might be messaging app Kik’s Kin token. According to CoinJournal, Kik CEO Ted Livingston admitted that they were essentially launching the token because they had no other way to compete with Facebook. Kik was able to raise nearly $100 million in their token distribution event — money that comes with all of the benefits mentioned by Ludwin. Ethereum’s ERC-20 token standard has also made it extremely easy for anyone to launch a new digital asset with the click of a button. BitTorrent creator Bram Cohen discussed the ease with which tokens can be launched on top of Ethereum at the Blockstack Summit earlier this year.

     

    “A lot of what people are doing now are these like ERC-20 tokens and stuff on Ethereum for their ICOs mostly because they don’t possess the skills to roll out an actual altcoin for the most part, which is not confidence inspiring,” said Cohen. “As a general rule, if you don’t possess the skills to roll out an altcoin, you probably shouldn’t be doing an ICO.” In the past, those who wanted to launch a new, tradeable token needed to create their own blockchain from scratch and convince exchanges to take the time to add it to their platform. The ERC-20 standard has made the process of adding a new token to an exchange much simpler because many of the new tokens follow the same general structure.

    In the opening section of his letter to Jamie Dimon, Ludwin stated….

    It’s easy to believe cryptocurrencies have no inherent value. Or that governments will crush them. It’s also becoming fashionable to believe the opposite: that they will disrupt banks, governments, and Silicon Valley giants once and for all. Neither extreme is true. The reality is nuanced and important. Which is why I’ve decided to write you this briefing note. I hope it helps you appreciate cryptocurrencies more deeply.

    Let me start by stating that I believe:

    • The market for cryptocurrencies is overheated and irrationally exuberant
    • There are a lot of poseurs creating them, and some scammers, too
    • There are a lot of conflicts of interest, self-serving hype, and obfuscation
    • Very few people in the media understand what’s going on
    • Very few people in finance understand what’s going on
    • Very few people in technology understand what’s going on
    • Very few people in academia or government understand what’s going on
    • Very few people buying cryptocurrencies understand what’s going on
    • It’s very possible I don’t understand what’s going on

    Also:

    • Banks and governments aren’t going away
    • Traditional software isn’t going away

    Ludwin argues that all asset classes exist to allocate resources to a specific form of organization.

    Despite the myopic focus on trading crypto assets recently, they don’t exist solely to be traded. That is, in principle at least, they don’t exist for their own sake. To understand what I mean, think about other asset classes and what form of organization they serve:

    • Corporate equities serve companies
    • Government bonds serve nations, states, municipalities
    • Mortgages serve property owners

    And now:

    • Crypto assets serve decentralized applications

    If you haven’t read Ludwin’s letter, you’d probably assume that he argues for the superiority of decentralized application over centralized applications, but you’d be wrong. He explains.

    In fact, on almost every dimension, decentralized services are worse than their centralized counterparts:

    • They are slower
    • They are more expensive
    • They are less scalable
    • They have worse user experiences
    • They have volatile and uncertain governance

    And no, this isn’t just because they are new. This won’t fundamentally change with bigger blocks, lightning networks, sharding, forks, self-amending ledgers, or any other technical solutions. That’s because there are structural trade-offs that result directly from the primary design goal of these services, beneath which all other goals must be subordinated in order for them to be relevant: decentralization.

    Here’s the important bit about crypto assets for Ludwin.

    Thus, bitcoin, for example, isn’t best described as “Decentralized PayPal.” It’s more honest to say it’s an extremely inefficient electronic payments network, but in exchange we get decentralization. Bottom line: centralized applications beat the pants off decentralized applications on virtually every dimension. EXCEPT FOR ONE DIMENSION. And not only are decentralized applications better at this one thing, they are the only way we can achieve it. What am I referring to? Censorship resistance. This is where we come to the elusive signal in the noise. Censorship resistance means that access to decentralized applications is open and unfettered. Transactions on these services are unstoppable. More concretely, nothing can stop me from sending Bitcoin to anyone I please. Nothing can stop me from executing code on Ethereum. Nothing can stop me from storing files on Filecoin. As long as I have an internet connection and pay the network’s transaction fee, denominated in its crypto asset, I am free to do what I want. (If Bitcoin is capitalism distilled, it’s also a kind of freedom distilled. Which is why libertarians can get a bit obsessed.)

    Here are his “big picture” thoughts from the letter on the challenge for cryptos.

    Given how different they are from the app models we know and love, will anyone ever really use decentralized applications? Will they become a critical part of the economy? It’s hard to predict because it depends in part on the technology’s evolution but far more on society’s reaction to it. For example: until relatively recently, encrypted messaging was only used by hackers, spies, and paranoids. That didn’t seem to be changing. Until it did. Post-Snowden and post-Trump, everyone from Silicon Valley to the Acela corridor seems to be on either Signal or Telegram. WhatsApp is end-to-end encrypted. The press solicit tips through SecureDrop. Yes, the technology got a little better and easier to use. But it is mainly changes in society that are driving adoption. In other words, we grew up in the rainforest, but sometimes things change and it helps to know how to adapt to other environments. And this is the basic argument that the smart money is making on crypto assets and decentralized applications: that it’s simply too early to say anything. That it is a profound change. That, should one or more of these decentralized applications actually become an integral part of the world, their underlying crypto assets will be extremely valuable.

    Despite his use of words like “irrational” and “perverse”, Forbes notes that Ludwin’s view on the outlook for cryptocurrency prices is positive.

    Although Ludwin took part of his time to address the obvious (some would call) bubble in the cryptocurrency market, he still sees a bright future for this new asset class. “Despite what probably sounds like a bit of cynicism here on cryptocurrencies and the fact that it’s obvious, I think, to every fair observer that we’re witnessing a mania that will have a correction . . . you should not bet against cryptocurrencies in their long term sustainability or viability and the reality that they are a new asset class, that they’re enabling a fundamentally new and important segment, and I think [they] will only increase globally in value over time,” said Ludwin.

     

  • Chinese Police Foil Plot To Assassinate Kim Jong Un's Nephew

    As the two women who fatally poisoned Kim Jong Nam with a toxic nerve agent face the gallows in a Malaysian murder trial, Bloomberg is reporting that Chinese police have broken up a plot purportedly masterminded in North Korea whereby a group of men were dispatched to Beijing to murder Jong Nam’s son, 22-year-old Kim Han Sol, who is also the nephew of North Korean leader Kim Jong Un.

    Since taking the reins of the North Korean state following the death of his father in 2011, Jong Un has readily murdered members of his family to eliminate any potential challenges to his rule. Chinese police arrested two of seven North Korean agents suspected of involvement with the plot.

    Jong Un executed his uncle Jang Song Thaek in 2013 on charges of graft and factionalism. Earlier this month, the leader promoted his 28-year-old sister to the ruling party’s political wing, bringing her closer to the center of power, Bloomberg reported.

    Kim Han Sol

    Some agents are being interrogated in special facilities on the outskirts of Beijing, a South Korean newspaper reported without elaborating on whether the other five were arrested. China’s foreign ministry didn’t immediately respond to a faxed request for comment.

    Kim Han Sol identified himself as the son of Kim Jong Nam – who was poisoned in February during a brazen attack at Kuala Lumpur airport – in a YouTube video released earlier this year. Kim Jong Nam was the eldest son of late North Korean leader Kim Jong Un.

    South Korean government officials have speculated that Kim Jong Un was behind the murder of his half-brother, a critic of his leadership who had lived outside the country for years. The Associated Press reported that attorneys in the trial of Jong Nam’s suspected assassins have sought to pin the blame for the assassination on four shadowy North Korean figures believed to have masterminded the murder plot.

    Authorities in Malaysia said the two women charged with Kim Jong Nam’s murder used the chemical weapon VX in the attack, claiming they were trained to swipe the poison on the victim’s face and knew the substance was toxic. The pair have pleaded not guilty.

  • Visualizing America's Most Polarizing Brands

    Due to some players kneeling during the national anthem to protest police brutality against black people in the United States and the subsequent hostile response from the president, the NFL has been dominating headlines recently. The issue is highly politicized, with opinions largely split down party lines. In fact, as a survey by Morning Consult shows, it has become one of the most polarizing brands in the country.

    As Statista's Martin Armstroing points out, when looking at favorability, the NFL enjoys a net score of 38 percent among Clinton voters. When subtracting the share of Trump voters giving a negative rating from those giving a favorable one, the result is a score of -24 percent. For Republican voters, this makes it one of the least popular brands, with only CNN and the New York Times receiving a lower score in this list -28 percent and -25 percent, respectively. 

    Infographic: America's Most Polarizing Brands | Statista

    You will find more statistics at Statista

    Unsurprisingly, the most polarizing brand is Trump Hotels. With a 99 percentage point difference, Trump voters recorded a net favorability of 48 percent, while the hotels count as one of the least-liked brands among Democrats with a net score of -52 percent.

  • Chris Hedges: Our Ever-Deadlier Police State

    Authored by Chris Hedges via TruthDig.com,

    None of the reforms, increased training, diversity programs, community outreach and gimmicks such as body cameras have blunted America’s deadly police assault, especially against poor people of color. Police forces in the United States – which, according to The Washington Post, have fatally shot 782 people this year – are unaccountable, militarized monstrosities that spread fear and terror in poor communities.

    By comparison, police in England and Wales killed 62 people in the 27 years between the start of 1990 and the end of 2016.

    Police officers have become rogue predators in impoverished communities. Under U.S. forfeiture laws, police indiscriminately seize money, real estate, automobiles and other assets. In many cities, traffic, parking and other fines are little more than legalized extortion that funds local government and turns jails into debtor prisons.

    Because of a failed court system, millions of young men and women are railroaded into prison, many for nonviolent offenses. SWAT teams with military weapons burst into homes often under warrants for nonviolent offenses, sometimes shooting those inside. Trigger-happy cops pump multiple rounds into the backs of unarmed men and women and are rarely charged with murder. And for poor Americans, basic constitutional rights, including due process, were effectively abolished decades ago.

    Jonathan Simon’s “Governing Through Crime” and Michelle Alexander’s “The New Jim Crow” point out that what is defined and targeted as criminal activity by the police and the courts is largely determined by racial inequality and class, and most importantly by the potential of targeted groups to cause social and political unrest. Criminal policy, as sociologist Alex S. Vitale writes in his new book, “The End of Policing,” “is structured around the use of punishment to manage the ‘dangerous classes,’ masquerading as a system of justice.”

    The criminal justice system, at the same time, refuses to hold Wall Street banks, corporations and oligarchs accountable for crimes that have caused incalculable damage to the global economy and the ecosystem. None of the bankers who committed massive acts of fraud and were responsible for the financial collapse in 2008 have gone to prison even though their crimes resulted in widespread unemployment, millions of evictions and foreclosures, homelessness, bankruptcies and the looting of the U.S. Treasury to bail out financial speculators at taxpayer expense. We live in a two-tiered legal system, one in which poor people are harassed, arrested and jailed for absurd infractions, such as selling loose cigarettes—which led to Eric Garner being choked to death by a New York City policeman in 2014—while crimes of appalling magnitude that wiped out 40 percent of the world’s wealth are dealt with through tepid administrative controls, symbolic fines and civil enforcement.

    The grotesque distortions of the judicial system and the aggressive war on the poor by the police will get worse under President Trump and Attorney General Jeff Sessions. There has been a rollback of President Barack Obama’s 2015 restrictions on the 1033 Program, a 1989 congressional action that allows the transfer of military weaponry, including grenade launchers, armored personnel carriers and .50-caliber machine guns, from the federal government to local police forces. Since 1997, the Department of Defense has turned over a staggering $5.1 billion in military hardware to police departments.

    The Trump administration also is resurrecting private prisons in the federal prison system, accelerating the so-called war on drugs, stacking the courts with right-wing “law and order” judges and preaching the divisive politics of punishment and retribution. Police unions enthusiastically embrace these actions, seeing in them a return to the Wild West mentality that characterized the brutality of police departments in the 1960s and 1970s, when radicals, especially black radicals, were murdered with impunity at the hands of law enforcement. The Praetorian Guard of the elites, as in all totalitarian systems, will soon be beyond the reach of the law. As Vitale writes in his book, “Our entire criminal justice system has become a gigantic revenge factory.”

    The arguments—including the racist one about “superpredators“—used to justify the expansion of police power have no credibility, as the gun violence in south Chicago, abject failure of the war on drugs and vast expansion of the prison system over the last 40 years illustrate. The problem is not ultimately in policing techniques and procedures; it is in the increasing reliance on the police as a form of social control to buttress a system of corporate capitalism that has turned the working poor into modern-day serfs and abandoned whole segments of the society. Government no longer makes any attempt to ameliorate racial and economic inequality. Instead, it criminalizes poverty. It has turned the poor into one more cash crop for the rich.

    “By conceptualizing the problem of policing as one of inadequate training and professionalization, reformers fail to directly address how the very nature of policing and the legal system served to maintain and exacerbate racial inequality,” Vitale writes.

     

    “By calling for colorblind ‘law and order’ they strengthen a system that puts people of color at a structural disadvantage. At the root, they fail to appreciate that the basic nature of the police, since its earliest origins, is to be a tool for managing inequality and maintaining the status quo. Police reforms that fail to directly address this reality are doomed to reproduce it. …Well-trained police following proper procedures are still going to be arresting people for mostly low-level offenses, and the burden of that will continue to fall primarily on communities of color because that is how the system is designed to operate—not because of the biases or misunderstandings of officers.”

    In a recent interview, Vitale told me, “We’ve been waging a war on drugs for 40 years by putting people in prison for ever longer sentences. Yet drugs are cheaper, easier to get, and at a higher quality than they’ve ever been. Any high school student in America can get any kind of drugs they want. Yet we persist in this idea that the way to respond to the problem of drugs, and many other social problems, is through arrest, courts, punishments, prisons. This is what Trump is playing to. This idea that the only appropriate role for the state is one of coercion and threats—whether it’s in the foreign policy sphere or in the domestic sphere.”

    Police forces, as Vitale writes in his book, were not formed to ensure public safety or prevent crime. They were created by the property classes to maintain economic and political dominance and exert control over slaves, the poor, dissidents and labor unions that challenged the wealthy’s hold on power and ability to amass personal fortunes. Many of America’s policing techniques, including widespread surveillance, were pioneered and perfected in colonies of the U.S. and then brought back to police departments in the homeland. Blacks in the South had to be controlled, and labor unions and radical socialists in the industrial Northeast and Midwest had to be broken.

    The fundamental role of the police has never changed. Paul Butler in his book “Chokehold: Policing Black Men” and James Forman Jr. in his book “Locking Up Our Own: Crime and Punishment in Black America” echo Vitale’s point that the war on drugs “has never been about public health or public safety. It’s been about providing a cover for aggressive and invasive policing that targets almost exclusively people of color.”

    “People often point to the London Metropolitan Police, who were formed in the 1820s by Sir Robert Peel,” Vitale said. “They are held up as this liberal ideal of a dispassionate, politically neutral police with the support of the citizenry. But this really misreads the history. Peel is sent to manage the British occupation of Ireland. He’s confronted with a dilemma. Historically, peasant uprisings, rural outrages were dealt with by either the local militia or the British military. In the wake of the Napoleonic Wars, in the need for soldiers in other parts of the British Empire, he is having more and more difficulty managing these disorders. In addition, when he does call out the militia, they often open fire on the crowd and kill lots of people, creating martyrs and inflaming further unrest. He said, ‘I need a force that can manage these outrages without inflaming passions further.’ He developed the Peace Preservation Force, which was the first attempt to create a hybrid military-civilian force that can try to win over the population by embedding itself in the local communities, taking on some crime control functions, but its primary purpose was always to manage the occupation. He then exports that model to London as the industrial working classes are flooding the city, dealing with poverty, cycles of boom and bust in the economy, and that becomes their primary mission.”

    “The creation of the very first state police force in the United States was the Pennsylvania State Police in 1905,” Vitale said. “For the same reasons. It was modeled similarly on U.S. occupation forces in the Philippines. There was a back and forth with personnel and ideas. What happened was local police were unable to manage the coal strikes and iron strikes. … They needed a force that was more adherent to the interest of capital. … Interestingly, for these small-town police forces in a coal mining town there was sometimes sympathy. They wouldn’t open fire on the strikers. So, the state police force was created to be that strong arm for the law. Again, the direct connection between colonialism and the domestic management of workers. … It’s a two-way exchange. As we’re developing ideas throughout our own colonial undertakings, bringing those ideas home, and then refining them and shipping them back to our partners around the world who are often despotic regimes with close economic relationships to the United States. There’s a very sad history here of the U.S. exporting basically models of policing that morphs into death squads and horrible human rights abuses.”

    The almost exclusive alliance on militarized police to deal with profound inequality and social problems is turning poor neighborhoods in cities such as Chicago into miniature failed states, ones where destitute young men and women join a gang for security and income and engage in battles with other gangs and the police. The “broken windows” policy shifts the burden for poverty onto the poor. It criminalizes minor infractions, arguing that disorder produces crime and upending decades of research about the causes of crime.

    “As poverty deepens and housing prices rise, government support for affordable housing has evaporated, leaving in its wake a combination of homeless shelters and aggressive broken-windows-oriented policing,” Vitale writes. “As mental health facilities close, police become the first responders to calls for assistance with mental health crises. As youth are left without adequate schools, jobs, or recreational facilities, they form gangs for mutual protection or participate in the black markets of stolen goods, drugs, and sex to survive and are ruthlessly criminalized. Modern policing is largely a war on the poor that does little to make people safer or communities stronger, and even when it does, this is accomplished through the most coercive forms of state power that destroy the lives of millions.”

    The accelerated assault on the poor and the growing omnipotence of the police signal our transformation into an authoritarian state in which the rich and the powerful are not subject to the rule of law. The Trump administration will promote none of the conditions that could ameliorate this crisis—affordable housing; well-paying jobs; safe and nurturing schools that do not charge tuition; better mental health facilities; efficient public transportation; the rebuilding of the nation’s infrastructure; demilitarized police forces in which most officers do not carry weapons; universal, government-funded health care; an end to the predatory loans and unethical practices of big banks; and reparations to African-Americans and an end to racial segregation. Trump and most of those he has appointed to positions of power disdain the poor as a dead weight on society. They blame stricken populations for their own misery. They seek to subjugate the poor, especially those of color, through police violence, ever harsher forms of punishment and an expansion of the prison system.

    “We need an effective system of crime prevention and control in our communities, but that is not what the current system is,” Alexander writes in “The New Jim Crow.” “The system is better designed to create crime, and a perpetual class of people labeled criminal. … Saying mass incarceration is an abysmal failure makes sense, though only if one assumes that the criminal justice system is designed to prevent and control crime. But if mass incarceration is understood as a system of social control—specifically, racial control—then the system is a fantastic success.”

  • Nevada Rancher Cliven Bundy Goes On Trial For 2014 Armed Standoff With Federal Agents

    Nevada rancher Cliven Bundy is officially set to go on trial this week for his role in leading a 2014 armed standoff against federal agents that became a rallying point for militia groups challenging U.S. government authority in the American West.  As Reuters notes, jury selection is slated to start later this morning in a U.S. District Court in Las Vegas after being postponed due to the mass shooting on October 1st that claimed 58 lives.

    Jury selection in the latest trial was slated to begin on Monday morning in U.S. District Court in Las Vegas. The proceedings were postponed for three weeks after an unrelated mass shooting in Las Vegas on Oct. 1 in which 58 people were killed.

     

    Standing trial with Cliven Bundy, 71, are the two sons, Ammon and Ryan Bundy, who led last year’s Oregon occupation, and a third co-defendant, Ryan Payne, a Montana resident linked by prosecutors to a militia group called Operation Mutual Aid.

     

    A fourth co-defendant, internet blogger and radio host Peter Santilli, pleaded guilty on Oct. 6 to conspiracy and faces a possible six-year prison term.

    Six lesser-known participants in the Nevada ranch showdown went on trial as a group earlier this year with two men found guilty.  One of the two men was sentenced to 68 years in prison and the other is still awaiting sentencing.  Two of the four remaining defendants were retried and acquitted, and two others pleaded guilty last week to obstructing a court order. Those two each face up to a year in prison when sentenced.

    Bundy

    As you may recall, Bundy’s Nevada revolt was sparked by a court-ordered roundup of his cattle by government agents over his refusal to pay fees required to graze the herd on federal land.  Hundreds of supporters, many heavily armed, rallied to Bundy’s cause demanding that his livestock be returned. Outnumbered law enforcement officers ultimately retreated rather than risk bloodshed. No shots were ever fired.

    The face-off marked a flashpoint in long-simmering tensions over federal control of public lands in the West and was a precursor to Bundy’s two sons leading an armed six-week occupation of a federal wildlife center in Oregon two years later, in 2016 (see: “Now Is The Time To Stand Up”: Armed Activists, Militiamen Seize Federal Wildlife Refuge Office In Oregon).  Here’s a recap of the events leading up the Oregon standoff:

    On Saturday, militants seized a remote government outpost following a protest by hundreds of angry citizens.

     

    It all started back in 2001 when Dwight Hammond and his son Steven set fire to leased government land in what they said was an effort to beat back invasive plant species and – ironically – prevent wildfires. They set more fires in 2006 and were later convicted of arson.

     

     

    Both men served time in prison but a judge eventually determined that their sentences were too light and ordered them back to jail.

     

    After the peaceful rally was completed today, a group of outside militants drove to the Malheur Wildlife Refuge, where they seized and occupied the refuge headquarters. A collective effort from multiple agencies is currently working on a solution. For the time being please stay away from that area. More information will be provided as it becomes available. Please maintain a peaceful and united front and allow us to work through this situation,” Harney County Sheriff Dave Ward said, in a statement. The elder Bundy weighed in as well, noting that the occuption isn’t “exactly what [he] thought should happen.” “But I didn’t know what to do,” he added. “You know, if the Hammonds wouldn’t stand, if the sheriff didn’t stand, then, you know, the people had to do something. And I guess this is what they did decide to do. I wasn’t in on that.”

    Ammon and Ryan Bundy, along with five other people, were previously charged with criminal conspiracy in the takeover of the Wildlife Refuge though that trial ended with the acquittal last year of all seven.

  • Japanese Stocks, USDJPY Rise After BoJ Leaves Policy Unchanged

    With the Nikkei 225 having only suffered one down day (so far) in the whole month of October (a record), The BoJ decided it's better not to rock the boat and left monetary policy unchanged, as expected.

     

    With new members at The BoJ, there was perhaps some uncertainty about Kuroda's decision today…

     

    Boradly speaking Japanese economic data has been supportive but in recent days, disappointment has begun to set in once again…

     

    But, as expected, The BoJ, hot on the heels of Abe's snap-election victory, left policy unchanged…

    • BOJ Board Votes 8-1 to Keep Policy Unchanged
    • Kataoka Dissents, Says BOJ Should Target 15 Yr JGB Yield
    • BOJ trims next year's inflation forecast as anticipated, 1.4% vs 1.5% last time.
    • BOJ statement keeps reference to 80 trillion yen bond buying target as well as 6 trillion yen ETF target.
    • Hedging their bets, the BOJ says "upside and downside risks to economic activity are generally balanced."

    So, no major surprise in those headlines but the inflation downgrade indicates challenges still ahead… and provide an 'out' for easing firther if the stock market ever drops.

    And the reaction…

    *  *  *

    October will be the best month for Japanese stocks in 2 years and given today's weakness so far, there were only two down days in the whole month…

     

    JGB yields remain rangebound and 'under control' for now…

    BOJ bought 7.74 trillion yen of JGBs in October in its market operations, little changed from about 7.7 trillion yen purchased in September.  It has bought about 57 trillion yen so far this fiscal year, after taking into account around 40 trillion yen of notes that are due for redemption in the period. That's well below the BOJ's 80 trillion yen target, but the bank has succeeded in its stealth tapering and keep yields generally pinned near zero.

    and it appears 114.00 is the limit for USDJPY for now…

     

    Here's something odd, as Bloomberg's Min Jeong Lee notes, BoJ bought 94.9 billion yen worth of ETFs in October, compared with an average monthly purchase of 505 billion yen in 2017. Here's a chart that shows the BOJ's ETF buying so far this year…

    So who was buying in October?

  • Tony Podesta Threatens Tucker Carlson After Bombshell Report On Russian Influence Peddling

    Content originally published at iBankCoin.com

    Tony Podesta sent a Cease and Decist letter to “Tucker Carlson Tonight” hours after resigning from his role at the Podesta Group – a D.C. lobbying firm accused by a former executive of pedaling Russian influence along with fellow lobbyist and short-lived Trump campaign manager Paul Manafort.

    Watch: 

    Manfort was indicted over the weekend on 12 counts ranging from tax fraud, money laundering and giving false statements between 2006 and 2015, and is currently under house arrest after turning himself over to the FBI Monday morning – fueling speculation as to whether Tony Podesta’s sudden departure from his firm is connected.

    Of note, Monday’s indictment lists “Company A” and “Company B” as firms involved in the investigation – which NBC reports are the Podesta Group and DC public relations firm Mercury Public Affairs.

    Last week Carlson reported that Tony Podesta is a central figure in Special Counsel Robert Mueller’s investigation. Directly after his report, Carlson’s show was contacted by a former long-time executive of the Podesta Group with “direct personal knowledge” of Tony Podesta’s questionable activities, which Carlson divulged the next evening.

    While the nature of Podesta’s threat has not been made public, Carlson later tweeted “We’re confident the Mueller probe will reveal a lot more about Tony Podesta’s lobbying practices in the near future.”

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    To review:

     After meeting with the former Podesta Group executive who has been “extensively” interviewed by Robert Mueller’s Special Counsel, Tucker Carlson Tonight relayed several highly troubling aspects of the Tony Podesta’s relationship with business associate and fellow lobbyist, Paul Manafort.

    According to the former Podesta Group executive, Manafort and Tony Podesta were running a Russian influence-peddling racket up and down Washington D.C., bringing a “parade” of Russian oligarchs to congress for meetings. Podesta was also “Basically part of the Clinton Foundation,” meeting regularly to discuss the now-infamous Uranium One deal.

    Highlights, as previously reported (video below):

    • Lobbyist and temporary Trump campaign manager Paul Manafort is at the center of the Russia probe – however the scope of the investigation has broadened to include his activities prior to the 2016 election.
    • Manafort worked with the Podesta Group since at least 2011 on behalf of Russian interests, and was at the Podesta Group offices “all the time, at least once a month,” peddling Russian influence through a shell group called the European Centre for a Modern Ukraine (ECMU).
    • Manafort brought a “parade” of Russian oligarchs to congress for meetings with members and their staffs, however, the Russia’s “central effort” was the Obama Administration.
    • In 2013, John Podesta recommended that Tony hire David Adams, Hillary Clinton’s chief adviser at the State Department, giving them a “direct liaison” between the group’s Russian clients and Hillary Clinton’s State Department.
    • In late 2013 or early 2014, Tony Podesta and a representative for the Clinton Foundation met to discuss how to help Uranium One – the Russian owned company that controls 20 percent of American Uranium Production – and whose board members gave over $100 million to the Clinton Foundation.
    • Tony Podesta was basically part of the Clinton Foundation.”
    • Believing she would win the 2016 election, Russia considered the Podesta Group’s connection to Hillary highly valuable.
    • Podesta Group is a nebulous organization with no board oversight and all financial decisions made by Tony Podesta. Carlson’s source said payments and kickbacks could be hard for investigators to trace, describing it as a “highly secret treasure trove.” One employee’s only official job was to manage Tony Podesta’s art collection, which could be used to conceal financial transactions.

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    Full monologue below:  

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  • Neocons Hijack Trump's Syria Policy – Ron Paul Asks "Haven't We Done Enough Damage?"

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

    Does anyone in the Trump Administration have a clue about our Syria policy?

    In March, Secretary of State Rex Tillerson appeared to be finally pulling back from President Obama’s disastrous “Assad must go” position that has done nothing but prolong the misery in Syria. At the time, Tillerson said, the "longer-term status of President Assad will be decided by the Syrian people."

    Those of us who believe in national sovereignty would say that is pointing out the obvious.

    Nevertheless it was a good sign that US involvement in Syria – illegal as it is – would no longer seek regime change but would stick to fighting ISIS.

    Then out of the blue this past week, Tillerson did another 180 degree policy turn, telling a UN audience in Geneva that, “[t]he reign of the Assad family is coming to an end. The only issue is how that should that be brought about.”

    The obvious question is why is it any of our business who runs Syria, but perhaps that’s too obvious. Washington’s interventionists have long believed that they have the unilateral right to determine who is allowed to head up foreign countries. Their track record in placing “our guy” in power overseas is abysmal, but that doesn’t seem to stop them. We were promised that getting rid of people like Saddam Hussein and Gaddafi would light the fire of freedom and democracy in the Middle East. Instead it has produced nothing but death and misery – and spectacular profits for the weapons manufacturers who fund neocon think tanks.

    In Syria, Assad has been seen as a protector of Christians and other minorities against the onslaught of in many cases US-backed jihadists seeking his overthrow. While the Syrian system is obviously not a Switzerland-like democracy, unlike our great “ally” Saudi Arabia they do at least have elections contested by different political parties, and religious and other minorities are fully integrated into society.

    Why has the Trump Administration shifted back to “Assad must go”? One reason may be that, one-by-one, the neocons who opposed Trump most vociferously during the campaign have found themselves and their friends in positions of power in his Administration. The neocons are great at winning while losing.

    The real story behind Washington’s ongoing determination to overthrow the Syrian government is even more disturbing. In a bombshell interview last week, a former Qatari Prime Minister confessed that his country, along with Saudi Arabia, Turkey, and the United States, began shipping weapons to jihadists from the very moment Syrian unrest began in 2011. The well-connected Qatari former minister was trying to point out that his country was not alone in backing al-Qaeda and even ISIS in Syria. In the course of defending his country against terrorism charges leveled by Saudi Arabia he has spilled the beans about US involvement with the very groups claimed to be our arch-enemies. As they did in Afghanistan in the 1980s, the CIA supported radical Islamic terrorism in Syria.

    Haven’t we done enough damage in Syria? Do we really need to go back to 2011 and destroy the country all over again?

    The neocons never admit a mistake and never change course, but I do not believe that the majority of Americans support their hijacking of President Trump’s Syria policy. It is long past time for the US to leave Syria alone. No bases, no special forces, no CIA assassination teams, no manipulating their electoral system. We need to just come home.

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Today’s News 30th October 2017

  • The Petrodollar's Biggest Challengers

    Authored by Michael Kern via CryptoInsider,

    Established in the early 1970s, the petrodollar has secured the United States’ influence over the oil trade for over 40 years, but recently, it is clear that this monopoly is slowly beginning to fall apartin some part due to the influence of Bitcoin and other emerging cryptocurrencies.

    Background

    Due to the plummeting value of the dollar, the debt from the Vietnam War, and excessive domestic spending, President Nixon abruptly pulled out of the Bretton Woods Accord, which pegged the dollar to the price of gold and based the value of other currencies on that of the dollar. Labeled the “Nixon Shock,” these actions left the country bursting with debt and low on cash, with many of its key allies such as Britain, France, and Germany questioning whether the U.S. was justified in its position as the leader of the global economy.

    While the U.S. economy entered a nose dive, another geopolitical event was unfolding which exacerbated the economic free fall.

    In 1973, Syria and Egypt, backed by several other Arab Nations, launched an attack on Israel which marked the beginning of the Yom Kippur War (or Ramadan War). The war placed increased pressure on oil prices, and when the United States provided Israel with financial aid and arms, the Arab Nations responded.

    In 1960, the Organization of Petroleum Exporting Countries (OPEC) was formed. At the core of this organization were Kuwait, Iran, Libya, Qatar, Saudi Arabia, Iraq and the United Arab Emirates – countries which were strongly opposed to U.S. interference in the 20-day war.

    Following U.S. provisions to Israel, resource rich OPEC placed an oil embargo on all those thought to have aided Israel, including the United States, Britain, Canada, Japan, the Netherlands and later South Africa and Portugal. By 1974, the price of oil quadrupled.

    With the success of the embargo, and cartel’s new role as an oil price influencer, Saudi Arabia became the de facto leader of OPEC.

    In 1974, desperate to return value to the U.S. dollar, President Nixon and Secretary of State Kissinger entered negotiations with the Saudi Royal Family. In the agreement, the United States would provide Saudi Arabia with arms and assist with the protection of oil fields. In exchange, Saudi Arabia was to price all oil sales in U.S. dollars and invest surplus oil proceeds in U.S. debt securities. And by 1975, all oil-producing members of OPEC followed suit. This began the reign of the petrodollar.

    The petrodollar has since elevated the United States economically and politically throughout the world, but after years of unprovoked wars and geopolitical belligerence, U.S. influence is beginning to fade.

    Through the years, there have been a number of attempts to move away from the petrodollar system, especially within OPEC, in which many of its members are not particularly friendly with the United States. Another strong advocate of change is Russia, which suggested to China and Japan to purchase oil in yen or yuan.

    Bitcoin, the Russian Miner Coin and the Cryptoruble

    A Kuwaiti finance firm, however, took this debate a step further, suggesting in 2014 that the Gulf Cooperation Council could benefit from trading oil for bitcoin. The suggestion was based on the idea that the GCC could save time and money with faster, cheaper, and more efficient transactions.

    This idea has been debated back and forth for some time, with some even suggesting that the “anonymity” factor could usher in a new era of world peace. The idea is that, using a neutral “petro-bitcoin,” countries would be immune to currency manipulation from governments, which has clear global impacts. In an unbiased-blockchain could act as a great medium for doing business on a global scale.

    While this is all well and good, neither the U.S. or China are looking to ease up on their power push.

    China, indeed, has taken the lead in the fight against the petrodollar. In 2012, Iran began trading oil in yuan,  and earlier this year, in response to U.S. sanctions, OPEC member Venezuela began pricing its oil sales in Chinese yuan, as well. China’s biggest move, however, was its push for Saudi Arabia to do the same. One of the most notable efforts from China to tackle the petrodollar was the country’s yuan-priced crude oil benchmark, which it recently unveiled.

    While China pushes for the petro-yuan, Russia is also making moves which could have serious implications for the U.S. dollar.

    In addition to the Russian Miner Coin, the Kremlin announced that it will be creating a new state-endorsed cryptocurrency backed by gold. The goal of this coin is to allow free exchange between the cryptoruble and the ruble, and to reduce dependence on foreign currency while stimulating the domestic online economy.

    While few details of the cryporuble are known, the technology does seem to be blockchain-based, as Putin has met with Ethereum and WAVES advisors to build the platform.

    With these major moves from China and Russia, there is no doubt that the dollar will see downward pressure in the near future. As the world’s major economies vie for geopolitical power, it is worth following the growing role of bitcoin and cryptocurrencies in this story.

  • "Daggers Are Falling From The Sky" – China Stocks, Bonds Tumble After National Congress Ends

    Who could have seen this coming?

    After weeks of 'calm' – demanded by The People's Party – and well-managed 'National Team' ramps top 'prove' how much Xi's plan for the nesxt five years is being received, the end of China's National Congress has been met with… a plunge in stock and bond markets.

     

     

    This is the biggest drop in the Chinese market in 11 weeks…

    But it's not just stocks. The Chinese bond market is getting slammed…

    China 10Y yield is up 6 days in a row (the biggest surge in rates since May) to their highest since Oct 2014…

    With the Chinese yield curve now inverted for 10 straight days – the longest period of inversion ever…

    As Bloomberg reports, the situation that’s existed for most of 2017 – sovereign yields rising, and corporate debt remaining relatively resilient – is at risk of cracking. As appetite for bonds of any kind dwindles and authorities roll out measures that target higher-risk investments, company securities are in the line of fire.

    Now that the Communist Party Congress is over, China’s bond holders may be about to get hit by “daggers falling from the sky," said Huachuang Securities Co., referring to aggressive deleveraging policies.

     

    “It’s very likely we will see a significant increase in corporate yields in the coming year," said David Qu, a market economist at Australia & New Zealand Banking Group Ltd. in Shanghai.

     

    "The trigger could be tougher regulations or a default. A majority of non-bank financial institutions’ debt holdings are corporate bonds, so their selloff can lead to severe consequences. Banks are underestimating authorities’ intentions to tighten regulations.”

     

    “The deleveraging campaign hasn’t even gone half way, and the risk of banks redeeming entrusted funds could surface at the end of this year," said Qin Han, chief bond analyst at Guotai Junan Securities Co. in Shanghai.

     

    "The chance of a selloff in corporate bonds is increasing, which will result in a widening of their yield premium over sovereign notes."

    But this is far from over, as we noted earlier, the end of China's National Congres is also ushering in the end of 'coordinated global growth'

    As Citi writes, "China’s Party Congress has concluded and Xi Jinping’s position as President has been consolidated. Given there are no standing committee members in their 50s, it suggests there are no apparent heirs for Mr. Xi, opening the door for him to stay on beyond 2022. One of the key questions in the run up to the congress was that once power was consolidated, would China accelerate its economic reforms. We think this is unlikely but do expect a moderation of growth, with data momentum perhaps set to continue to slow at its current pace. Note how China’s MCI tends to lead Citi’s macro data index for China and our MCI is still tightening."

    It gets worse.

    As Capital Economics writes in its China Activity Monitor note this week, the firm's China Activity Proxy (CAP) suggests that growth in China slowed last month to the weakest pace in a year and with property sales cooling and officials continuing their efforts to rein in financial risks, Cap Econ thinks that looking ahead "the economy will slow further over the coming quarters."

    CapEco's ominous conclusion:

    Looking ahead, we think growth will continue to slow over the coming quarters. The current props to growth appear shaky. With investment contracting in real terms, industrial output will probably soften over the months ahead. Property sales also look set to weaken further as the government’s purchase curbs continue to expand. This will weigh on construction before long. More generally, with tighter monetary conditions weighing on credit growth, activity looks set to weaken further.

    That the past 18 months of coordinated global growth will end in China, is quite symmetric: back in January 2016, as global markets were tumbling, aborting the Fed's plans to hike rates 4 times in 2016 and resulting in sharp economic slowdowns around the globe, it was the (still mysterious) Shanghai Accord that "saved" the world, and unleashed a burst of unprecedented, and coordinated, growth… which only cost China some $8 trillion in debt.

    It will only make sense that another major Chinese event will mark the top of this economic mini cycle, and lead to the next global downturn, not to mention spike in market volatility.

  • President Trump's Confidence In Missile Defense Is A Dangerous Illusion

    Authored by Andrei Akulov via The Strategic Culture Foundation,

    The US is pushing ahead with expansion of the nation’s homeland ballistic missile defense (BMD). The effort enjoys strong bipartisan support in Congress and among experts. Many allies place a high value on BMD cooperation with the United States. However, there are ample reasons to question the efficiency of US missile defenses, especially the capability to protect against intercontinental ballistic missiles (ICBMs).

    “We have missiles that can knock out a missile in the air 97% of the time,” President Donald Trump said in his interview with Fox News on October 11, adding “and if you send two of them, it’s going to get knocked down.” He was talking about the threat coming from North Korea to be repelled by the Ground-Based Midcourse Defense (GMD) in Alaska and California – the $40 billion project administered by the Missile Defense Agency (MDA).

    The US military conducted the first-ever missile defense test involving a simulated attack by an intercontinental ballistic missile in May. The ICBM-type target was fired from the Kwajalein Atoll in the Marshall Islands toward the waters just south of Alaska. The mission was to prepare for countering an intercontinental missile launched by North Korea. The Missile Defense Agency (MDA) described the test as an “incredible accomplishment”. According to Vice Admiral Jim Syring, director of the agency, “This system is vitally important to the defense of our homeland, and this test demonstrates that we have a capable, credible deterrent against a very real threat.” The assessment appears to be exaggerated as the test was not conducted in a realistic environment.

    The next test of the GMD system is scheduled for late 2018 and, for the first time, will involve firing two interceptors against one ICBM target. It makes unsubstantiated the president’s affirmation that two interceptors are enough to knock out a North Korean missile as no such tests have been conducted so far.

    The US currently deploys 36 interceptors – 32 at Fort Greely, Alaska, and four at Vandenberg Air Force Base, California. By the end of 2017, there will be 44 deployed GBIs. A majority of the interceptors use the CE-I variant of kill vehicle that has scored only two successes in four tests. At least ten interceptors are to be equipped with the CE-II Block I vehicle, which has had two successful intercept tests in three tries.

    It is generally believed that it takes at least four-five interceptors to hit the target. It means President Trump is off base saying the hit probability is 97%. Prior to the ICBM test, the GMD system had successfully hit its target in only ten of 18 tests since 1999. A success rate is about 56%, not 97%. But even 56% is almost certainly an overstatement, given the less-than-realistic nature of the tests.

    A success rate for four-five interceptors per target may be 97% but the possibility that each successive interceptor’s chance of successful kill might not be independent of the previous one, due to correlated factors such as design shortcomings, leading to a lower overall success rate. Nevertheless, President Trump believes each interceptor has a single-shot probability of kill (SSPK) for a given interceptor of 97% (rather than 56%).

    According to the Washington Post, “No single interceptor for ICBMs has demonstrated a 97-percent success rate, and there is no guarantee using two interceptors has a 100-percent success rate. Moreover, the military’s suggestion that it could achieve a 97-percent success rate with four interceptors appears based on faulty assumptions and overenthusiastic math. The odds of success under the most ideal conditions are no better than 50-50, and likely worse, as documented in detailed government assessment.”

    Joe Cirincione, the President of Ploughshares Fund and the author of Nuclear Nightmares: Securing the World Before It Is Too Late, investigated anti-missile programs for almost 10 years as professional staff on the House Armed Services and Government Operations Committees. He believes that “If people took a close look at just one of these interceptor tests, they would likely conclude, as I did, that the tests bear little resemblance to real-world conditions.”

    If North Korea fired an ICBM – or multiple ICBMs – at the United States, the GMD with its Ground-Based Interceptors (GBIs) is only one system that could take a shot at intercepting and destroying the warhead outside the earth’s atmosphere in midcourse flight. Other missile defense systems such as THAAD and Aegis are in no position to hit ICBMs as they’re designed for other classes of targets.

    With only one test against an ICBM, the MDA is not even close to demonstrating that the system works in a real-world setting. The GMD systems have not yet been tested in the range of conditions under which it is expected to operate. No tests have been conducted at night or against complex countermeasures, such as electronic countermeasures and decoys. The tests are always rigged because the intercept team knows the timing and trajectory of the incoming missile. But even the scripted tests have often failed. What has been done so far is insufficient to demonstrate that an operational BMD capability really exists.

    The US has not publicly conducted any tests to see whether the missile-defense radars can distinguish a missile from chaff. Even cheap inflatable balloons can make all intercept efforts go down the drain. With no air resistance (or drag) in space, a decoy like a balloon shaped like a nuclear warhead could travel in the same way as the true warhead, making it difficult for a missile to distinguish the real thing from the decoy. Balloons are light enough to enable a sophisticated warhead launch 20 or 30 decoy balloons to obscure the path of the warhead, swamping the defense system with fake signals.

    In February and April 2016, the Government Accountability Office (GAO) assessed that the MDA has not “demonstrated through flight testing that it can defend the US homeland against the current missile defense threat,” relying on “a highly optimistic, aggressive schedule” to upgrade the system.

    The US abandoned the Anti-Ballistic Missile (ABM) Treaty in 2002, which greatly obstructed arms control process. Efficient or not, the US current and potential BMD capability is taken into consideration to influence Russia’s military planning. It provokes Moscow into taking countermeasures to respond to BMD plans and negatively affects the prospects for future Russia-US arms control agreements. With uncertainties raised about the strict balance of arms agreed upon in New START, a chain reaction is triggered leading to arms race.

    Philip Giraldi, a highly respected expert and the Executive Director of the Council for the National Interest, believes that the American people are being fooled by the administration, which tries to make them think that a nuclear war is thinkable. According to him, “If that is the message being sent by the White House, it would encourage further reckless adventurism on the part of the national security state.” Mr. Giraldi hit the nail right on the head. The GMD effort creates a dangerous illusion that a victory in a nuclear conflict is achievable and no money should be spared to spur the implementation of the MDA plans. In reality, the US defense industry is the only benefactor while the taxpayers throw money into the drain. The result: further erosion of arms control and reduced security.

  • These Are The Fastest-Growing (And Declining) Jobs In The US

    As the inexorable advance of automation kills jobs from retail to manufacturing to data entry while wages in the US show only marginal signs of improvement, the Labor Department's latest biennial employment projections have revealed the fastest and slowest-growing fields in the US.

    …The industries that dominate the list aren't surprising. Home health aides, statisticians, solar-panel installers and software developers and other jobs that, as Bloomberg points out, reflect the needs of an aging population, a shift to clean energy and employer demand for science, technology and math talent.

    Solar photovoltaic installers – America’s fastest growing field – are responsible for installing systems on roofs or other structures, and earning a median annual wage of $39,240 in 2016 – is projected to more than double from 2016 to 2026, according to data from the Labor Department’s biennial employment projections.

    A staggering eight of the remaining 14 fastest-growing occupations are in health care, with median salaries in 2016 ranging from $21,920 for personal care aides to $101,480 for physician assistants. The highest paid among them – mathematicians – earned a median $105,810 last year, though the job typically requires a master’s degree. And as baby boomers advance into their twilight years – the while the knock-on effects of the opioid crisis continue to multiply – more growth is effectively assured.

    …Meanwhile the fastest de typists, watch repairers, and postal workers are facing a bleaker outlook, the Labor Department data show…

    In America’s topsy-turvey labor market – where the unemployment rate can still tumble to record lows during a month where hurricanes caused the US economy to shed 33,000 jobs – college students and early-career workers need to be cognizant of the challenges they might face in the labor market – especially given the paucity of careers that require or strongly encourage applicants to have a background in Art History.  
     

  • Doug Casey: How I Learned To Love Bitcoin – Part 1

    Via CaseyResearch.com,

    Bitcoin is up 495% this year. Ethereum, another major cryptocurrency, is up 3,507% since the start of the year. Smaller cryptos have soared more than 10,000%.

    When you see gains like that, it’s natural to think that you missed out. I even felt this way for the longest time…that is, until I talked to Doug Casey.

    You see, a few weeks ago, I called Doug to see what he thinks about cryptos. He told me why Bitcoin is money. He told me why the crypto market’s about to get a lot bigger. He even told me why Bitcoin could soon hit $50,000… That’s eight times higher than where it trades today.

    After that conversation, I became convinced that cryptos are the real deal. I even just bought some Bitcoin myself.

    Of course, I realize that not everyone’s got a legendary speculator on speed dial. So over the next two days, I’m sharing a brand-new essay from Doug. In it, he explains why the crypto boom has a long way to go.

    By Doug Casey, founder, Casey Research

    In this article, I’d like to explain how I learned to love Bitcoin. Why it’s a wonderful thing. Its potential as a speculation. How the government is going to co-opt it. And how this is all likely to end.

    I was first introduced to Bitcoin several years ago in Cafayate, Argentina. A young Belgian guy came to visit, I bought him lunch, and we discussed Bitcoin. He was a very early enthusiast. He gave me a physical Bitcoin as a souvenir. They’re now collectibles, but the digital codes are inscribed on them. I still have that Bitcoin. It was worth $13 at the time.

    I wish I had listened to his argument more carefully, because I could have made millions. Over 300-1 over just a few years… that’s rare indeed. I was inclined towards it philosophically, but outsmarted myself on an investment level. Because Bitcoin was pitched to me as an alternative currency, and I failed to see all of its advantages in that role.

    My original objection was that Bitcoin isn’t backed by anything. It’s really a private fiat currency. It’s very much like the Zambian Kwacha, the Argentine peso, the US dollar, or any of the other 150-plus currencies in today’s world. It’s a floating abstraction. Unlike state currencies, though, its acceptance isn’t enforced by laws. But, on the other hand, its quantity is limited. But would that be enough to get large amounts of people to use it as a currency?

    I missed something when I said, back then, that it had no value. It’s a fiat currency, yes, but it has much more practical value than any other.

    A currency has to be a good medium of exchange, and a store of value. Even a few years ago, both of those things were wild speculations when it came to Bitcoin. I tried to analyze the situation rationally, using Aristotle’s five characteristics of a good money.

    Aristotle defined the five characteristics of good money in the 4th century BC. And his analysis is as accurate now as it was then. It must be durable, divisible, convenient, consistent, and have use value in and of itself. Based on that, Aristotle believed gold and silver were best suited for use as money. Let’s analyze how Bitcoin does by these five criteria.

    Durable. Bitcoin and other cryptocurrencies are definitely durable—unless we have a major electromagnetic pulse (EMP) or a significant solar flare that wipes out all the computers. Bitcoins are not as durable as the metals, but they’re adequate, barring a collapse of civilization.

    Divisible. Bitcoin is infinitely divisible. Better than the physical metals, actually—although the metals can be accounted in tiny fractions too.

    Convenient. Yes—as long as you have a smartphone, Bitcoin is very convenient. But your smartphone, or something like it, may not always be with you. And your counterparty also has to have one. And it’s not very convenient if someone doesn’t know or trust Bitcoin. Right now, that’s still probably 98% of humanity.

    Consistent. Absolutely. Every Bitcoin is exactly like another one. It’s at least as good as .999 fine gold that way.

    The problem I had with Bitcoin was the fifth point: Does it have use value in itself, so you can’t get stuck holding the bag?

    If you have a million US paper dollars, and nobody accepts them, they have no use in and of themselves—except as wall decorations or kindling. They’re just unsecured liabilities of a bankrupt government. In essence like a million Zimbabwe dollars, although there’s obviously a continuum. Fiat currencies can be easily destroyed by their issuers. The things are burning matches. They have half-lives, like radioactive elements.

    Sure, there were advantages to Bitcoin being a privately issued fiat currency. But I didn’t see its real use value; that’s where I went wrong.

    Bitcoin is certainly a fiat currency like the dollar or the Kwacha. But it’s also an excellent transfer device. You can move wealth from one country to another, or to another person, quickly and privately. I’d say secretly, but you’re not supposed to say “secret” anymore, you can only say “private.” Part of the politically correct corruption of language, I might add.

    And you can do so outside of the banking system, which is increasingly important. If you use Bitcoin, you don’t need a bank to store your money.

    Cryptocurrencies, like Bitcoins, are just the first, and most obvious, application of blockchain technology. Hopefully, among other things, blockchain and Bitcoin are going to destroy the SWIFT system, the vehicle for wiring money from one bank to another. SWIFT is expensive (at least $50-100 per transaction), slow (generally a day or two, sometimes a week or more), and insecure (who trusts either big banks or the US Government?). And SWIFT requires that all dollars clear through New York; non-Americans don’t care for that. SWIFT is used by thousands of banks around the world to send payment instructions worth trillions of dollars each day. Incidentally, it's not that I'm against SWIFT itself. It's just that it's become a creature of the banks—who abuse it and are actually responsible for its problems.

    So, this is one big use value of Bitcoin. It allows you to transfer something that is accepted as money outside of the banking system, and outside of government fiat currencies.

    Bitcoin is well on the way to being accepted as money. I think it will succeed.

    What is money? Money is a medium of exchange and a store of value. Almost anything can be used as money. Some things are just much better than others.

    Salt, seashells, and cows have all historically been used as money. After all, the word pecuniary comes from the Latin pecus, which means cow. And salary comes from the Latin sal, which is salt. Wampum were seashells. Cigarettes are money in prisons and war zones. Even giant Yap island discs have been used as money.

    Bitcoin is becoming more and more accepted as a medium of exchange, while most government fiat currencies approach their intrinsic values—essentially zero.

    Bitcoin is a bit more problematic as a store of value. Once again, let’s get back to the basics. You’ve got two kinds of currencies: commodity currencies and fiat currencies.

    The commodity currencies are actual physical commodities. You know they have use value. Fiat currencies, on the other hand, are just made up. They’re totally arbitrary and political.

    It’s like that old joke about sardines. You’ve got eating sardines and trading sardines. Commodity currencies are eating sardines. Fiat currencies are trading sardines. Of course, there’s no guarantee that Bitcoin is going to be accepted a year or two from now. It’s a high tech innovation, and maybe a Version 2.0 will collapse the value of the current version. So in a few years, we may find that Bitcoin fails the store of value test. But it’s accepted at the moment. And it’s been growing in value at a crazy rate—unlike fiat currencies, which have all been falling against real goods and services at about 5-10% a year. Incidentally, I don’t put much faith in the accuracy of government inflation figures.

    Bitcoin has been a great speculation so far. But as a store of value? Bitcoin is a technological innovation. There likely will be Bitcoin 2.0 and 3.0, not to mention other, even more advanced cryptos. What will the current Bitcoin then be worth? There’s a reason the expression “High tech, big wreck” is true. Just because so far it’s been a great speculation, doesn’t mean it’s a good store of value. Technology, a solar flare, or even government action could wipe it out.

    The bottom line? Bitcoin passes the medium of exchange test for the moment and store of value test for the moment. So you can definitely say it’s money—for the moment. But so does the Argentine peso, for the moment. I have little confidence, however, Bitcoin will be here, say, five years from now. Buying cryptos is not like socking away gold coins.

    The $64 question is: Where are we in the market cycle for cryptos? Clearly, we’re no longer early in the game. It’s like getting into the Internet stocks back in 1998—they weren’t cheap, but the bubble got much, much bigger. And the Internet—contrary to what people like Paul Krugman thought—was not itself a bubble. Up till now, the only way to play this has been the coins, the tokens, like Bitcoin. There are perhaps a thousand of them out there now, and most of them are garbage.

    Because I think the bubble will get much bigger, I’m getting involved in these cryptocurrencies on several levels. Including public mining companies, which is not germane to this article. I’m trying to make the trend my friend. But cautiously, because there’s a lot of speculation going on.

    I am concerned about the market, which is very bubbly. But I think it’s going much higher, for several reasons. One, as we discussed, is that some of the cryptos have great utility, and only about 25 million out of the 7 billion people in the world currently own them. I promise you that five years from now that number will be more like three billion. They’re going to get much bigger in the developed world, but even bigger in the Third World.

  • Caught On Video: This Is All That's Left Of Sears Canada

    On October 11, we reported that the now defunct Sears Canada announced plans to liquidate its remaining 150 stores instead of restructuring, the latest admission of brick and mortar defeat in the war with Amazon, with the result some 12,000 job losses in the coming weeks. The Canadian version of Sears is the latest victim of department-store decline that’s swept North America as shoppers gravitate online. While the retailer has dabbled in pop-up stores and e-commerce, its distribution centers aren’t as automated as Amazon.com Inc. or even Canadian peer Hudson’s Bay Co., which last year opened its own robotic facility to accelerate online orders.

    For thousands of soon to be unemployed Sears Canada workers and retirees the future of their pensions remains in limbo: Sears Canada has 18,000 retirees and beneficiaries whose monthly pensions its has to address. A motion was filed in August for a windup of the plan, which would require the company to pay the full C$266.8 million deficit, according to the filing. That motion has been postponed until at least Nov. 30.

    There is also the question of what happens to all the local malls that suddenly find themselves without 150 anchor tennants. The Sears bankruptcy comes two years after Target’s liquidation left a hole in many of the country’s malls, which made it tougher for Sears Canada to find buyers for its real estate and leases.

    What there is zero confusion about however, is what happens to liquidating stores once their employees – aware their termination is imminent – lose all interest in even pretending to keep up an appearance of normalcy.

    The answer is shown in the following video from Vtography, which was taken in the Fairview Mall in Toronto on October 22, 2017, and which captures the chaos from a liquidation sale at, well, liquidating Sears Canada. All that’s missing from the post-apocalyptic scenes are the zombies.

  • "Unhinged" Billionaire Steyer Urges Nation To "Impeach Mentally Unstable Trump" In Prime Time World Series Ad

    In the commercial break before the National Anthem was sung at tonight's game 5 of The World Series, hedge fund billionaire Tom Steyer decided it was time to release his full length ad demanding that President Trump be impeached…

    "He's brought us to the brink of nuclear war, obstructed justice at the FBI, and in violation of the constitution, he has taken money from foreign governments and threatened to shut down news organizations who report the truth.

     

    If that isn't a case for impeaching and removing a dangerous president then what has our government become?

     

     

    …I'm Tom Steyer, and like you, I'm a citizen who knows it's up to us to do something.

     

    …this president is a clear and present danger who's mentally unstable and armed with nuclear weapons…

    As a reminder, President Trump was not impressed with Mr. Steyer during the week:

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    Incidentally, not one of the players, coaches, ballboys, crowd, or concession workers 'took a knee' during the singing of the National Anthem.

    Here is the full commercial.

    While some approved of this striking political statement, others were rather displeased with the stunt receiving some angry feedback from social media:

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    As some enjoyed it:

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        The billionaire environmentalist has also been sharply critical of California Senator Dianne Feinstein, who he considers soft on Trump because she once said he could be “a good President.”

    In fact, according to CNN, Steyer is strongly considering a run against Feinstein in California’s primary election next year.    

  • Why Cities All Across America Are Suddenly Buying Up Trailer Parks

    Much like the historic run that nearly resulted in the collapse of the global financial system in 2009, home prices in the U.S. are once again looking more like an Amazon or Facebook stock price chart than a stable store of value that should probably grow roughly inline with overall inflation. 

    And while these price gains are great news for the private equity firms that scooped up foreclosed homes after the last housing crisis, they’re once again making it nearly impossible for the average American family to find affordable housing. 

    As such, as the Pew Charitable Trusts points out, municipalities all across the country are suddenly scooping up trailer parks in an effort to prevent them from being converted to the next McMansion track-housing project and maintain some affordable housing options.

    Here in the heart of one of Colorado’s most expensive cities, Isabel Sanchez bought a mobile home seven years ago for just $6,000. Her four-bedroom bungalow now sits on a lot she rents for $355 a month.

     

    The mobile home park Sanchez and her family live in offers a glimpse of Boulder’s hippie past. Small houses and trailers, many dating to the 1960s and ’70s, sit close together on tree-lined streets. “I love the space, I love the location, I love the community here,” Sanchez, 55, said recently, relaxing in a blue armchair in her spotless living room.

     

    Affordable neighborhoods like these have become hard to find in Boulder and cities across the country where home prices are soaring. In some metro areas, rising prices are prompting park owners to sell their land to developers, affordable housing advocates say. “When the mortgage crisis came about it sort of slowed down, and now it’s heating up again,” said Carolyn Carter, deputy director of the National Consumer Law Center.

     

    So Boulder and a handful of other localities, desperate to hang on to homes middle- and working-class people can afford, have stepped in to buy parks, fix them up, and transfer ownership to residents or to a nonprofit on condition that rents be kept low.

     

    Portland, Oregon’s housing authority financed a deal last year that saved a mobile home park from being sold to a developer. Pitkin County, Colorado, is buying a park it intends to set aside for people who work in the area. And Boulder bought a park this summer, with the twin goals of improving its infrastructure and maintaining affordable housing.

     

    Affordable housing advocates say that the best way to preserve mobile home parks is to turn them into co-operatives owned by residents. But in Boulder, land is so valuable — and parks need so many infrastructure upgrades — that it wouldn’t be possible for low-income residents to finance the purchase alone.  

    TPB

    As Pew notes, roughly 8 million Americans live in trailer parks around the country and when their land is sold off for the next housing development they have no choice but to scramble to find new housing.

    About 20 million Americans live in manufactured homes — so called because they’re built in a factory, rather than on site — and about two-fifths of those can be found in mobile home parks, mostly in suburbs and exurbs.

     

    Mobile homes are an important source of low-income housing. But homeownership can be precarious for people who live in mobile home parks. Because they don’t own the land beneath their houses or trailers, they have to move if the park closes down.

     

    And many mobile homes aren’t all that mobile. Sanchez, who works at a nonprofit in Denver, says she could probably move her house if she had to because it was built recently. Her daughter’s house across the street may be a different story. It has sat there for over 40 years, like most of the homes in the park.

     

    The closure of a mobile home park can create a crisis for residents and for the city or town they live in as dozens of displaced people scramble to find new housing, says Esther Sullivan, a sociologist at the University of Colorado Denver who has studied mobile home parks in Texas and Florida. In her research, she found that city council members who agree to rezone a park often argue that park residents can move into low-income housing elsewhere. But that’s not always the case, she said.

    Meanwhile, national nonprofits have sprung up to help residents form co-ops and finance purchases.

    One way to preserve mobile home parks is to give the people who live in them a chance to buy the park themselves at a fair market rate, says Carter of the National Consumer Law Center. A national nonprofit called ROC USA will, with the permission of the park owner, help residents form a co-operative and finance a purchase. ROC USA has sponsored some 200 resident-owned communities in the United States.

     

    At least 19 states have laws on the books that help residents buy a park, Carter says. Some states require park owners to give residents months of advance notice before a park is sold, to notify residents if they request a zoning change for the property, or to allow residents to organize into homeowners associations. Other states will free up money when a park closes to help residents pay their relocation costs or require park owners to chip in.

    Of course, we could also just reduce artificial demand for McMansions by reversing a decade of misinformed Fed policies…but that might result in the bursting of yet another nasty little bubble…

  • Mainstream Media Now Claiming That It Is 'A Crime' To Investigate Hillary Clinton's Ties To Russia

    Authored by Alex Thomas via SHTFplan.com,

    As the public has finally began to realize the extent of the corruption surrounding Hillary Clinton, including the now infamous Russia Uranium One deal, the mainstream media has gone into hyper-drive to discredit and distract from documented facts and are now going as far as to float the idea that Trump may be committing a crime for simply investigation Clinton at all.

    That’s right, in the sick world of the establishment media, Trump is committing a criminal act by even considering an investigation into shady Clinton dealings with the Russians. After all, she is above the law right?

    Even more disgusting, the so-called reporters spewing this nonsense are using the fact that Mueller is conducting a deep state operation (now discredited) against the president that accuses him of working with Russia to win the election when in reality it is the exact opposite. In other words, Trump is being accused of something he didn’t do but because of this, he can’t investigate real crimes committed by Clinton.

    Absolutely unbelievable.

    During an appearance on MSNBC’s “AM Joy” legal analyst Paul Butler laughably claimed that it “absolutely is” obstruction of justice for the government to investigate Hillary Clinton because… Russia.

    “Would these attempts to distract from the investigation, even attempting to unseal or remove the gag order from an FBI informant in order to further what is essentially a side investigation that they’re pursuing, is that in itself an element of obstruction?” Host Joy Reid stunningly asked, making clear that she believes selling off 20% of the countries uranium supply to Russia is a “side issue”.

     

    “It absolutely is. The statute says if you try to impede a federal investigation, then you are guilty of a federal felony. And with Donald Trump, it’s not just that he asked for a pledge of loyalty from his FBI director. It’s not only that he asked the national security intelligence folks if there’s any way they could thwart the investigations, not only that he reaches out to Michael Flynn after he’s been fired and tell him to keep your head up. I’ll see what I can do. It’s this attitude that he has,” Butler declared.

    Not only does the above exchange once again show the establishment media’s ridiculous bias, it also shows that they are now running scared about the recent revelations and have since resorted to straight up nonsense as some sort of Orwellian defense.

    Amazingly, criticism of even considering investigating Clinton didn’t stop there, as another guest on the show accused the “autocratic” Trump administration of attempting to get Clinton locked up over nothing. Keep in mind, we have literally dozens of reports showing how guilty Clinton actually is.

    “Trump’s trying to feed his base. He’s trying to set up prosecution and persecution of people who he dislikes,” Fake news journalist Sarah Kendzior told Reid.

     

    “He was not able to deliver. There’s no wall. There is still Obamacare, and so he’s shooting for lock [Clinton] up.”

    In other words, Clinton has done nothing wrong at all and the only reason anyone is even talking about the failed presidential candidate is because Trump is failing in other parts of his presidency.

    This is pure desperation at its finest folks.

    “What I worry about is that this lock her up will extend beyond Clinton to any kind of opponent. He targets private citizens. Last week, he was targeting a grieving widow. So, there’s really no limits to what this administration would do. And so, I think even though it’s become obvious that this propaganda blitz was in part due to draw attention away from what Mueller did, we need to watch it in the weeks to come because his is an autocratic administration and I don’t think that they’re going to stop with these baseless smears and persecutory attempts,” Kendzior continued, adding in a mix of straight up lies and mischaracterizations while claiming with a straight face that Clinton has done nothing.

    It doesn’t get any clearer than this. No matter what the Clinton machine is found to have done, the mainstream media, especially the puppets at MSNBC, will go to bat for her and they are now so desperate that they are willing to float the idea that even investigating queen Hillary is a crime.

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Today’s News 29th October 2017

  • Trump Confirms "All JFK Files Are Released" After Latest Clash With Spy Agencies

    Update: Following Friday's disappointing release of some, but not all, remaining files related to the death of President John F. Kennedy, President Trump just confirmed, via tweet, that the rest of the files are released, well ahead of schedule…

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    Of course, given that this is the government – and the government does not work weekends – the files are unlikely to be released on to the official National Archives site until Monday.

    This appears to be a victory for Trump in his never-ending battle with the intelligence agencies.

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    As we detailed earlier, The Deep States' 'war' with President Trump may sink from the headlines every so often, but there is little doubt that it continues to bubble away, battle after battle. This week's delayed, reduced… and now soon-to-be-complete release of the rest of the previously classified JKF files is yet another clash with the spy agencies… and this time President Trump may have won…

    As AP's Zeke Miller writes, it was a showdown 25 years in the making: With the world itching to finally get a look at classified Kennedy assassination files, and the deadline for their release just hours away, intelligence officials were still angling for a way to keep their secrets. President Donald Trump, the one man able to block the release, did not appreciate their persistence. He did not intend to make this easy.

    Like much else surrounding investigations of the 1963 killing of President John F. Kennedy, this week’s release of 2,800 records from the JFK files was anything but smooth. It came together only at the last minute, with White House lawyers still fielding late-arriving requests for additional redactions in the morning and an irritated Trump continuing to resist signing off on the request, according to an account by two White House officials. They spoke only on condition of anonymity to discuss internal discussions.

    The tale of the final hours before the congressionally mandated 25-year release deadline on Thursday adds a new chapter to the story of Trump’s troubled relationship with his spy agencies. He again flashed his skepticism and unpredictability in dealing with agencies long accustomed to a level of deference. Intelligence officials, meanwhile, were again left scratching their heads about a president whose impulses they cannot predict.

    And those officials had their own story tell, some rejecting the notion they were slow to act on Trump’s expectations for the documents. The CIA began work months ago to get its remaining assassination-related documents ready for release on Thursday, according to a person familiar with the process. The person, who was not authorized to publicly to discuss the process and spoke only on condition of anonymity, said the goal was to have all the agency’s documents ready to be released in full or with national security redactions before the deadline.

    Since taking office, Trump has challenged the integrity of intelligence leaders, moved to exert more control over U.S. spying agencies and accused his predecessor of using government spycraft to monitor his campaign. In the JFK files matter, one White House official said, Trump wanted to make clear he wouldn’t be bullied by the agencies.

    Whatever occurred in the lead-up to deadline day, Trump was irritated Thursday that agencies still were arguing for more redactions. The president earlier in the week had tweeted to tease the release of the documents, heightening the sense of drama on a subject that has sparked the imaginations of conspiracy theorists for decades. Under a 1992 law, all of the records related to the assassination were to be made public unless explicitly withheld by the president.

    Just before the release Thursday, Trump wrote in a memorandum that he had “no choice” but to agree to requests from the CIA and FBI to keep thousands of documents secret because of the possibility that releasing the information could still harm national security. Two aides said Trump was upset by what he perceived to be overly broad secrecy requests, adding that the agencies had been explicitly warned about his expectation that redactions be kept to a minimum.

    “The president and White House have been very clear with all agencies for weeks: They must be transparent and disclose all information possible,” White House Principal Deputy Press Secretary Raj Shah said Friday.

    Late last week, Trump received his first official briefing on the release in an Oval Office meeting that included Chief of Staff John Kelly, White House Counsel Don McGahn and National Security Council legal adviser John Eisenberg. Trump made it clear he was unsatisfied with the pace of declassification.

    Trump’s tweets, an official said, were meant as a signal to the intelligence community to take seriously his threats to release the documents in their entirety.

    According to White House officials, Trump accepted that some of the records contained references to sensitive sources and methods used by the intelligence community and law enforcement and that declassification could harm American foreign policy interests. But after having the scope of the redactions presented to him, Trump told aides he did not believe them to be in the spirit of the law.

    On Thursday, Trump’s top aides presented him with an alternative to simply acquiescing to the agency requests: He could temporarily allow the redactions while ordering the agencies to launch a new comprehensive examination of the records still withheld or redacted in part.

    Trump accepted the suggestion, ordering that agencies be “extremely circumspect” about keeping the remaining documents secret at the end of the 180-day assessment.

    “After strict consultation with General Kelly, the CIA and other agencies, I will be releasing ALL JFK files other than the names and addresses of any mentioned person who is still living,” Trump wrote in a Friday tweet.

     

    “I am doing this for reasons of full disclosure, transparency and in order to put any and all conspiracy theories to rest.”

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  • Mutual Assured Destruction

    Authored by Philip Giraldi via The Strategic Culture Foundation,

    Sometimes it is possible to read or view something that completely changes the way one looks at things. I had that experience last week when I read an article at Lobelog entitled “A Plea for Common Sense on Missile Defense,” written by Joe Cirincione, a former staffer on the House Armed Services Committee who now heads the Ploughshares Fund, which is a Washington DC based global foundation that seeks to stop the spread of nuclear, chemical and biological weapons.

    The article debunks much of the narrative being put out by the White House and Pentagon regarding missile defense. To be sure, it is perfectly reasonable to mistrust anything that comes out of the federal government justifying war given its track record going back to the War of 1812. And the belligerent posture of the United States towards Iran and North Korea can well be condemned based on its own merits, threatening war where there are either no real interests at stake or where a diplomatic solution has for various reasons been eschewed.

    But the real reason why the White House gets away with saber rattling is historical, that the continental United States has not experienced the consequences of war since Pancho Villa invaded in 1916. This is a reality that administration after administration has exploited to do what they want when dealing with foreign nations: whatever happens “over there” will stay “over there.”

    Americans consequently do not know war except as something that happens elsewhere and to foreigners, requiring only that the U.S. step in on occasion and bail things out, or screw things up depending on one’s point of view. This is why hawks like John McCain, while receiving a “Liberty” award from Joe Biden, can, with a straight face, get away with denouncing those Americans who have become tired of playing at being the world’s policeman. He describes them as fearful of “the world we have organized and led for three-quarters of a century, [abandoning] the ideals we have advanced around the globe, [refusing] the obligations of international leadership and our duty to remain ‘the last best hope of earth’ for the sake of some half-baked, spurious nationalism.”

    McCain’s completely fatuous account of recent world history befits a Navy pilot who was adept at crashing his planes and almost sank his own aircraft carrier. He also made propaganda radio broadcasts for the North Vietnamese after he was captured. The McCain globalist-American Exceptionalism narrative is also, unfortunately, echoed by the media. The steady ingestion of lies and half-truths is why the public puts up with unending demands for increased defense spending, accepting that the world outside is a dangerous place that must be kept in line by force majeure. Yes, we are the good guys.

    But underlying the citizenry’s willingness to accept that the military establishment should encircle the globe with foreign bases to keep the world “safe” is the assumption that the 48 States are invulnerable, isolated by broad oceans and friendly nations to the north and south. And protected from far distant threats by technology, interceptor systems developed and maintained at enormous expense to intercept and shoot down incoming ballistic missiles launched by enemies overseas.

    In a recent speech, relating to the North Korean threat, President Donald Trump boasted that the United States anti-missile defenses are 97% effective, meaning that they can intercept and destroy incoming projectiles 97 times out of a 100. Trump was seeking to assure the public that whatever happens over in Korea, it cannot have an undesirable outcome over here in the continental United States nor, apparently, in Hawaii, Alaska and overseas possessions like Guam, all of which are shielded under the anti-missile defense umbrella. Trump was undoubtedly referring to, even if he was ignorant of many of the specifics, the Ground Based Midcourse Defense (GMD) installations in Alaska and Hawaii, which are part of the existing $330 billion missile defense system.

    It is certainly comforting to learn that the United States cannot be physically attacked with either nuclear or conventional weapons no matter what our government does overseas, but is it true? What if the countermeasures were somewhat closer to 0% effective? Would that change the thinking about going to war in Korea? Or about confronting Russia in Eastern Europe? And for those who think that a nuclear exchange is unthinkable it would be wise to consider the recent comments by Jack Keane of the aptly named Institute for the Study of War, a leading neoconservative former general who reportedly has the ear of the White House and reflects its thinking on the matter. Keane is not hesitant to employ the military option against Pyongyang and he describes a likely trigger for a U.S. attack to take out its nuclear facilities or remove “leadership targets” as the setting up of a ballistic missile in North Korea with a nuclear warhead mounted on top “aimed at America.” Some observers believe that North Korea is close to having the ability to reduce the size of its nukes to make that possible and, if Keane is to be believed, it would be considered an “act of war” which would trigger an immediate attack by Washington. And a counter attack by Pyongyang.

    The claim of 97% reliability for the U.S.’s anti-missile defenses is being challenged by Cirincione and others, who argue that the United States can only “shoot down some…missiles some of the time.” They make a number of arguments that are quite convincing, even to a layman who has no understanding of the physics involved. I will try to keep it simple.

    First of all, an anti-missile interceptor must hit its target head on or nearly so and it must either actually strike the target or explode its own warhead at a close enough distance to be effective. Both objectives are difficult to achieve. An Intercontinental Ballistic Missile (ICBM) travels at 5,000 meters per second. By way of comparison a bullet fired from a rifle travels at about one fifth that speed. Imagine two men with rifles standing a mile apart and firing their weapons in an attempt to have the bullets meet head on. Multiply the speed by five if one is referring to missiles, not bullets. Even using the finest radars and sensors as well as the most advanced guidance technologies, the variables involved make it much more likely that there will be a miss than a hit. Cirincione observes that “…the only way to hit a bullet is if the bullet cooperates.”

    Second, the tests carried out by the Pentagon to determine reliability are essentially fraudulent. Contrary to the Donald Trump comment, the 97% accuracy is an extrapolation based on firing four anti-missile missiles at a target to make up for the fact that in the rigged tests a single interceptor has proven to be closer to only 56% accurate, and that under ideal conditions. This statistic is based on the actual tests performed since 1999 in which interceptors were able to shoot down 10 of 18 targets. The conclusion that four would result in 97% derives from the assumption that multiple interceptors increases the accuracy but most engineers would argue that if one missile cannot hit the target for any number of technical shortcomings it is equally likely that all four will miss for the same reason.

    The tests themselves are carefully scripted to guarantee success. They take place in daylight, preferably at dusk to ensure maximum visibility, under good weather conditions, and without any attempt made by the approaching missile to confuse the interceptor through the use of electronic countermeasures or through the ejection of chaff or jammers, which would certainly be deployed. The targets in tests have sometimes been heated to make them easier to find and some have had transponders attached to make them almost impossible to miss. As a result, the missile interceptor system has never been tested under realistic battlefield conditions.

    Even the federal government watchdog agencies have concluded that the missile interception system seldom performs. The Government Accountability Office concluded that flaws in the technology, which it describes as “failure modes,” mean that America has an “interceptor fleet that may not work as intended, prompting one Californian congressman John Garamendi to observe that “I think the answer is absolutely clear. It will not work. Nevertheless, the momentum of the fear…of the investments…[of] the momentum of the industry, it carries forward.”

    The Operational Test and Evaluation Office of the Department of Defense has also been skeptical, reporting that the GMD in Alaska and Hawaii has only “…a limited capability to defend the U.S. Homeland from small numbers of simple intermediate range or intercontinental ballistic missile threats launched from North Korea…the reliability and availability of the operational [interceptors] are low.”

    The dangerous overconfidence being demonstrated by the White House over the ability to intercept a North Korean missile attack might indeed be in some part a bluff, designed to convince Pyongyang that it if initiates a shooting war it will be destroyed while the U.S. remains untouched. But somehow, with a president who doesn’t do subtle very well, I would doubt that to be the case. And the North Koreans, able to build a nuclear weapon and an ICBM, would surely understand the flaws in missile defense as well as anyone.

    But the real danger is that it is the American people that is being fooled by the Administration. War is thinkable, even nuclear war, if one cannot be touched by it, a truism that has enabled the sixteen-year- long and counting “global war on terror.” If that is the message being sent by the White House, it would encourage further reckless adventurism on the part of the national security state. Far better to take the North Korean threat seriously and admit that a west coast city like Seattle could well become the target of a successful nuclear weapon attack.

    That would demonstrate that war has real life consequences and the unfamiliar dose of honesty would perhaps result in a public demand to seriously negotiate with Pyongyang instead of hurling threats in speeches at the United Nations and on Capitol Hill.

  • Visualizing $63 Trillion Of World Debt

    If you add up all the money that national governments have borrowed, it tallies to a hefty $63 trillion.

     

    Courtesy of: Visual Capitalist

    In an ideal situation, governments are just borrowing this money to cover short-term budget deficits or to finance mission critical projects. However, as Visual Capitalist's Jeff Desjardins notes, around the globe, countries have taken to the idea of running constant deficits as the normal course of business, and too much accumulation of debt is not healthy for countries or the global economy as a whole.

    The U.S. is a prime example of “debt creep” – the country hasn’t posted an annual budget surplus since 2001, when the federal debt was only $6.9 trillion (54% of GDP). Fast forward to today, and the debt has ballooned to roughly $20 trillion (107% of GDP), which is equal to 31.8% of the world’s sovereign debt nominally.

    THE WORLD DEBT LEADERBOARD

    In today’s infographic, we look at two major measures: (1) Share of global debt as a percentage, and (2) Debt-to-GDP.

    Let’s look at the top five “leaders” in each category, starting with share of global debt on a nominal basis:

    Together, just these five countries together hold 66% of the world’s debt in nominal terms – good for a total of $41.6 trillion.

    Next, here’s the top five for Debt-to-GDP:

    While only Italy and Japan here are considered major economies on a global scale, the high debt levels of countries like Greece or Portugal are also important to monitor.

    In the IMF’s baseline scenario, Greece’s government debt will reach 275% of its GDP by 2060, when its financing needs will represent 62% of GDP.

     

    – A recent IMF report, obtained by Bloomberg

    Greece, for example, is continuing along a particularly unsustainable path – and external creditors are getting stingier. Most recently, both the IMF and Greece’s euro-area creditors have demanded for the country to implement a law that automatically introduces austerity measures if a budget surplus of 3.5% of GDP isn’t hit.

    While Greece has dismissed such demands as “unacceptable”, the country – along with many others around the globe – will have to accept that constant debt accumulation has eventual consequences.

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    To get “$63 Trillion of World Debt” in printed form, go to the Kickstarter page now. Deadline: Oct. 31, 2017

  • US Homes Have Never Been More Unaffordable

    Just under a year ago, US home prices finally surpassed their prior all time highs, one decade after the 2006 bubble…

    … and haven’t looked back since. Which, all else equal, would be great news for America, where the bulk of middle-class wealth is not in the stock market contrary to conventional wisdom, but in its biggest, and most illiquid asset-cum-investment: one’s home.

    There is just one problem: while house prices are once again hitting new all time highs every month, household incomes have failed to keep up; in fact, as the Political Calculations blog shows, in the past two years there has been a distinct trend in home affordability, or lack thereof.

    As the first chart below shows, starting in September 2015, the TTM average median new home sale price in the U.S. has been rising at an average rate of $906 per month.

    That’s the good news; the bad news is that in terms of affordability, the ratio of the trailing twelve month averages of median new home sale prices to median household income in the U.S. has risen to an all time high of 5.454, which following revisions in the data for new home sale prices, was recorded in July 2017. The initial value for September 2017 is 5.437.

    In other words, the median new home in the US has never been more unaffordable in terms of current income.

    One final way to visualizie it comes from Ironman’s next chart, which shows the long-term relationship between median new home sale prices and median household income, with the annual data now spanning 2000 through 2016 and the monthly data covering the period from December 2000 through September 2017. It confirms the above: for the average American, buying a new home has never been more unaffordable.

  • Trump Will Own The Next Fed But "All Their Models Are In Ruins"

    Authored by James Rickards via The Daily Reckoning,

    President Trump is expected to nominate the next Federal Reserve chair within a matter of days.

    As I’ve explained before, Donald Trump has the opportunity to appoint a higher percentage of the Board of Governors of the Federal Reserve system at one time than any president since Woodrow Wilson.

    President Wilson signed the Federal Reserve Act during the creation of the Fed in 1913 when they had a vacant board. At that time, the law said the secretary of the Treasury and the comptroller of the currency were automatically on the Fed’s board of governors. But besides that, President Wilson selected all of the other participating members.

    Due to vacancies he inherited and key resignations, Trump now has the opportunity to fill more seats on the Fed’s Board of Governors than any president since then.

    That’s pretty amazing when you think about it.

    To review, the Federal Reserve’s Board of Governors is made up of seven appointees. That means that they can make a majority decision with four votes. If you’re reading about the Fed, you might also see reference to “regional reserve bank presidents.” These are roles within the Federal Reserve System, but the real power is found on seven-member Board of Governors.

    Trump will own the Fed.

    Meaning, whatever the president wants monetary policy to be, he’ll get. In other words, Donald Trump will be able to shape the Fed’s majority. But the tricky part is figuring out how he plans to shape it…

    During the campaign season, Trump called China and other nations currency manipulators. That signaled he believed the dollar was too strong and wanted it to weaken. But then the North Korean nuclear crisis rose to the fore.

    Trump backed off his threats against China because China has the most economic influence over North Korea, and Trump wanted China to use that leverage to convince the North to back off its nuclear program.

    But China didn’t deliver as Trump had hoped, and a trade war with China is now likely. That’s especially true now. Chinese president Xi Jinping has solidified his hold on power after the Chinese Politburo re-appointed him yesterday. Xi had avoided rocking the boat in recent months while his position was uncertain. But now that his lock on power is secure, Xi can afford to be much more confrontational with Trump.

    Trump’s trade policy has led many to believe that Trump will appoint a lot of “doves” to the Board. But don’t be surprised if Trump goes with a hard-money board. In fact, that’s what I expect. These will be hard-money, strong-dollar people, contrary to a lot of expectations.

    Trump advisers include hard-money advocates like Dr. Judy Shelton, David Malpass, Steve Moore and Larry Kudlow. I expect Trump to heed their advice.

    Which brings us to Janet Yellen and the next Federal Reserve Chair…

    Janet Yellen’s term as chair is up at the end of January – just over three months from now. Whoever President Trump appoints to replace her will be subject to Senate confirmation.

    Because that process takes time, that means the president has to name Yellen’s successor around November or December.

    And again, he’s expected to make that announcement by Nov. 3, before he heads to China.

    The market is tightly focused on President Trump’s pick. As of now, betting markets had the approximate probabilities as follows:

    Powell’s main qualification seems to be that he’s just like Yellen except he’s a Republican. So, if we combine their votes, that a 68% chance that policy will continue unchanged, which means more rate hikes ahead.

    The next in line is John Taylor, who is considered the most hawkish of the group. If we add his votes to the Powell + Yellen pool, that an 85% probability that policy will either be the same or tighter.

    No relief for gold in the Fed sweepstakes.

    Now, as I’ve been saying for months, my money’s on Kevin Warsh. Warsh is the likely next chair of the Fed.

    Warsh has previously served on the board. After being nominated by President George W. Bush he was a Fed governor where he served from 2006 until he resigned early in 2011.

    Kevin Warsh is a pragmatist, not an ideologue like Yellen. He’s not beholden to obsolete Fed models like Phillips curve that says low unemployment means higher inflation. Warsh understands that disinflation is a serious problem for a country with a 105% debt-to-GDP ratio, like the U.S.

    Warsh and the pragmatists understand that inflation is needed for the U.S. to have any hope of getting the debt problem under control.

    Warsh believed that the Federal Reserve should have raised interest rates a long time ago. But with disinflation a much more pressing concern than inflation right now, being a pragmatist means he won’t commit to tightening if conditions don’t warrant it.

    We’ll see how this all plays out probably late this week or early next before Trump leaves for China.

    But it’s important to realize that institutions boil down to people. And there’s going to be a lot of turnover at the Fed under Trump. It’s not just limited to his choice of Fed chair.

    Yes, Yellen will likely be out. But so are Fed officials that align with her, like Vice President Stanley Fischer, who announced his resignation in September.

    As I indicated, the new, emerging Fed will have less faith in traditional models. For example, in September, Fed governor Lael Brainard delivered one of the most significant Fed speeches ever. Translating from Fed-speak to plain English, she more or less admitted the Fed has no idea how inflation works.

    Brainard pointed out that the Fed began its current monetary policy tightening cycle in the belief that tight labor markets implied inflation was coming with a lag. The Fed raised rates in December 2015, December 2016, March 2017 and June 2017 in part to get out ahead of this coming inflation.

    Instead the opposite happened.

    The Fed’s favorite measure of inflation plunged from 1.9% to 1.3% between January and August 2017 even as job creation continued and the unemployment rate fell. In other words, the relationship between tight labor markets and inflation turned out to be the exact opposite of what the Fed believed.

    Their models are in ruins.

    Of course, this is what I’ve been telling my readers to expect all year. The Fed was tightening into weakness, not strength, and would soon have to flip back to ease in order to avoid an outright U.S. recession. And ease is exactly what Brainard called for in her speech.

    In the meantime, a lot of uncertainty over the Fed’s direction will hover over the market, as if there wasn’t enough uncertainty in the market already.

    But one thing is certain:

    The next Fed head will have a lot on his (or her) plate.

    The biggest winner will be gold. The time to enter your gold position, if you don’t already have one, is now.

  • "The Incredible Shrinking Yard": Growing McMansions Are Increasingly Devouring Backyards

    America’s obsession with the ever-growing McMansion, combined with a perpetual lack of funding for said McMansion, has resulted a unique phenomenon which Trulia has dubbed “The Incredible Shrinking Yard.”  Analyzing public records to compare residential lot sizes to home footprints, Trulia says that homes built over the past two years occupy a staggering 25% of the land on which they sit, compared to roughly half that amount in 1975. 

    Here are some of Trulia’s key findings:

    • Nationally, single family homes occupy 17.4% of the lots on which they sit, regardless of the year they were built.

     

    • Homes built since 2015 occupy 25% of the land on which they sit, while homes built in 1975 occupy just 13.9%. This is being driven by a combination of lots shrinking by 36.2% and home footprints growing by 15.2% size.

     

    • Meanwhile, some of the oldest homes in the country, built in the early 1800s, occupy less than 5.0% of the large lots they are built on. The last time lot usage was nearly as high as it is now was during the early 1900s.

     

    • Don’t mind the neighbors? Single family homes in places like Philadelphia, and San Francisco, which are both geographically small but dense, have the highest lot utilization at 57.7%, and 44.2%, respectively.

     

    • Want plenty of yard space? Head to New England. Three Connecticut metro areas, Worcester, Mass., Hartford, Conn., and Bridgeport, Conn. make up the places with the smallest amount of house occupying lot space, at less than 7.5%.

     

    • While most metro areas have seen lot usage grow since the mid-70s, with Oakland, Calif., and Miami seeing the largest upward swings, six metros have bucked the trend with San Francisco, Memphis, and Long Island, N.Y. moving toward less lot usage.

    When national home price growth charts start to look like an Amazon stock chart, despite the fact that wage growth remains non-existent, but you know your family of 4 can never find a way to survive in a house even an inch smaller than 4,000 square feet, it only makes sense that lawn sizes would have to shrink to keep purchase prices somewhat ‘reasonable’…and by reasonable, of course we mean below FHA lending limits so that those McMansions can be purchased with minimal money down and backstopped by the American taxpayer.

    As Trulia notes, since the mid-70s, when the proportion of lots used by new construction hit a national low of 13.6%, it climbed 11.3 percentage points to 25% of the lot of homes built in 2015 or later. Most metro areas have seen lot usage grow similarly. Oakland, Miami, and Indianapolis have seen the largest upward swing in lot usage, with homes built after 2015 occupying 25.6, 24.9, and 20.3 percentage points more, respectively, of the lots they are built on than they did in the mid-70s.

    Meanwhile, 7 of the 95 metro areas analyzed by Trulia managed to buck the trend, with San Francisco, Memphis, Tenn., and Long Island, N.Y. actually seeing a 12.9, 11.6, and 6.0 percentage point decrease, respectively, in the percent of lot usage by homes constructed after 2015 when compared with homes built in the mid-70s.

     

    With that, here’s a helpful chart depicted just how small the ‘American Dream’ has become in your neck of the woods:

    Lot Usage by MSA

    //

  • Jamie Dimon Should Learn About Lemons

    By Chris at www.CapitalistExploits.at

    A tale of two James’.

    What does this guy:

    Captain James Cook

    …have in common with this guy:

    Two things:

    1. Same first name, and
    2. similar opportunities.

    Let me explain.

    Captain James was probably just another ruffian salty with poor hygiene and bad teeth. But you know what the catalyst to his fame was? And by extension what turned muddy old Britain into an empire?

    These:

    You see, the thing holding back Captain Jamie from extended ocean going voyaging was a nasty disease called scurvy. We know now that Jamie was dead eager to get out there and bring nasty European diseases to natives in faraway lands and upon arrival announce, “By George it’s nice and lush here, we’ll take it.”

    And so when Scottish physician James Lind figured out via controlled experiments that, in fact, a diet including vitamin C rich foods cured this pesky disease, the advantage presented to sailors was enormous. After all, those poor sods used to routinely lose up to 60% of their crews to scurvy on voyages.

    Imagine setting out knowing such odds.

    Da Gama, for instance, lost 116 if his 170 crew, and Magellan 208 of his 230. You’d have better odds skulling a bottle of Absolut and then playing chicken with Mack trucks on a freeway.

    It took the Brits about 40 years to put this knowledge to good use, but it has been argued by historians to have been a catalyst to the founding of the British Empire. At the time, there were plenty other countries who could quite easily have stacked up some lemon juice in the hull, set sail, and begun planting flags. But they didn’t.

    Isn’t that amazing? The bloody British Empire owes its fortunes to the humble lemon. And, by golly, old Jamie Cook took advantage of that didn’t he? And the rest, as they say, is now history.

    And this brings me to the other Jamie.

    You see, Jamie (the old Brit Jamie), used something quite revolutionary at the time to alter the course of history and become a major player in it.

    And Jamie (the not so old yank), Captain of the JPM ship has a similar opportunity today.

    It’s why he should learn about lemons.

    It seems he knows little about modern day “lemons” and their properties. Here’s some major ignorance points he shared with us all on his views just recently.

    I think Alex Gurevich said it best:

    I was mentioning this all to my lovely wife the other night, and you know what she said?

    She said that if he was a she (Jamie that is), he probably wouldn’t be so arrogant and may look at the manual. Which in this case is, of course, Satoshi’s white paper.

    And, as usual, she’s right. When we got our last DVD thingy player she immediately pulled out the manual to learn about how it all works so that when she wants to, she’ll be able to play exactly what she wants without delay and mess and fuss.

    Me? I stabbed away at the buttons, safe in the knowledge that even if I’m trying to get the Blu-ray to play, I’ll probably get the USB figured out, and who knows what excellent films are on the thumb drive I’ve shoved in there.

    I console myself with the fact I’m male, and as such, reading the manual is against my religion. But I tend to make up for it by diving in and learning by doing.

    Jamie, bless him, isn’t even prepared to do either, and that’s fine.

    It just means that when Bitcoin hits another all time high and history books are written (by the robots, of course), he won’t even make the pages. He’ll simply be like all those other sailors in Portugal, Spain, France, and the Netherlands who, in the 1800s, were sailing around at the same time Captain James Cook was.

    And you know what? We don’t know anything about them, and neither will future generations know anything about the present Captain of the USS enterprise JPMorgan’s Jamie “I don’t know isht about Bitcoin” Dimon.

    And that’s probably how it should be.

    – Chris

    “Do just once what others say you cannot do, and you will never pay attention to their limitations again.” — Captain James Cook

    ————————————–

    Liked this article? Then you’ll probably like my other missives on

    this topic as well. Go here to access them (free, of course).

    ————————————–

  • Blockchain And Gold Like Peanut Butter And Chocolate?

    Authored by Mike Shedlock via TheMaven.net/MishTalk,

    Even before the emergence of the growing plethora of cryptocurrencies, several attempts had been made in the past to create digital currencies based on gold, but none of them gained widespread support. Will blockchain and Bitcoin succeed where other attempts failed?

    One of the common criticisms and challenges of bitcoin and other cryptocurrencies is their price volatility which renders their consideration as a store of value nearly impossible. Some believe that gold backed cryptocurrencies may hold the key to solve these key challenges.

    There are already several cryptocurrencies, otherwise known as altcoins, backed by gold that have been launched. Several of the leading online bullion exchanges have implemented or are also implementing blockchain to create more efficient mechanisms for managing transactions. Each month it seems like there are more and more players joining the fray.

    My friends at The Hutch Report have provided me with an analysis of this nascent gold backed cryptocurrency niche along with a review of some the various players in the space. There are already some obvious differences across platforms which will most likely serve to weed out the serious players from those looking to make a quick buck.

    This analysis provides an objective review of the strengths, weaknesses, opportunities, and threats as well as a look at 23 gold-backed crypto and digital currencies. A review of some of the exchanges is also thrown in for good measure.

    Those Interested in more detail you can download the full report on Gold Backed Cryptocurrency. If you are looking for either a "To the moon, Alice" kind of report, or "This bubble will crash" kind of report, you are likely to be disappointed. Rather, this report analyses the increasing number of cryptocurrencies being backed by gold bullion. Included are research and analysis on 23 different companies and 4 gold exchanges using the blockchain. Here is their conclusion.

    Hutch View

    The recent economic and financial crisis of 2007-2008, not to mention the savings and loan crisis years before, woke people up to the fact that their banking and savings accounts may not be as secure as they once thought. In addition, people have begun to realize that the purchasing power of their fiat currency savings have been eroding over time as working families are fmding it harder and harder to get through the month.

    Massive central bank intervention into our free markets has not only caused more worry about potential runaway inflation, which would cause fiat currencies to be devalued and further losses of purchasing power, but their actions have caused an ever increasing wealth gap between the rich and the poor. It is clear that fiat money has serious economic and ethical drawbacks. This has prompted a search for a better alternative.

    The marriage of cryptocurrencies and gold enables alternative choices to holding more than fiat currency. Although we can't imagine fiat currencies to be replaced overnight, the promises of gold backed cryptos do look compelling moving into the future and they are certainly important to follow.

    In spite of the strengths of a gold backed cryptocurrency there are still many unknowns. In their short history we already have some that have come and gone. Our research into many of the up and coming gold backed cryptocurrencies has shown that the information available is not completely clear or transparent and sometimes sketchy at best. Previous examples of blatant fraud is also a reason to be defensive but not dismissive of the newcomers. We also have a variety from different parts of the globe. There is not enough of a track record with which to have the confidence to make a significant investment although it is worthwhile to look at them from a short term trading aspect in order to see how well they function and if they are able to deliver on their promises.

    The principle strengths of the gold exchanges based on the blockchain is that they are being developed by reputable organizations. We don't lose site of the fact that these blockchains being used are centralized which means they don't incorporate many of the advantages of the decentralized model for which cryptocurrencies such as Bitcoin have become known. They are not yet fully operational therefore it is difficult to judge their efficiencies.

    Although these new gold backed cryptocurrency and blockchain gold exchanges provide a compelling alternative to the purchase of gold we would not be jumping in just yet, however the future looks very exciting and by understanding the current developments in the sector through this report you are provided with a greater advantage as they mature.

    The ventures with the strongest management teams look to be the most compelling. For this reason the exchanges; Bankchain Precious Metals, Goldmoney, The Royal Mint and Tradewind, look solid. Among the gold backed cryptocurrencies, we will be following the launch of BullionCoin.

    Mish View

    If you want to hold gold, hold gold. But if you are still itching to get into cryptocurrencies despite (or because of) the massive crypto-rally, then gold backed crypto may be the way to go.

     

  • Prius (D)riving NY Legislator Fakes PTSD Panic Attack To Get Out Of Minor Speeding Ticket (VIDEO)

    Content originally published at iBankCoin.com

    Ulster County, N.Y. legislator Jennifer Schwartz Berky (D) – who is up for reelection Nov. 7, put on quite an act for a local police officer Gary Short after she was pulled her over for driving 43 mph in a 30 mph zone while talking on her cell phone.

    A 26-minute video of the May 2017 incident was released last Tuesday during an Ulster Town Board meeting, and features a meltdown of epic proportions.

    After Berky failed to impress officer Short by casually mentioning “I work for the county government, I’m a county legislator,” she immediately shifted into the victim role and proceeded to have histrionic tantrum. “Please don’t give me a ticket, I’m broke,” Berky cried, adding “I’m completely broke, and if you tell people, it’s going to hurt me. I’m totally broke. I made $20,000 last year. Please don’t give me a ticket.”

    Officer Short – a consummate professional throughout the encounter, returns to his squad car to run Berky’s information, when Berky gets out of her car and fakes a panic attack, while on the phone, claiming PTSD.

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

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

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

    Full video here:

      

    Berky has learned from this and is ready to move on!

    In response to the viral video, Berky issued an apology (the comments section is hilarious):

    “The video released earlier this week of my Town of Ulster traffic stop captured a tough moment for me,” stated Berky. “Like so many working families, I too face tough times and stressful situations.  As a professional, a public servant and a mother, I know my interaction with Police Officer Gary Short was unacceptable. I want to apologize to Officer Short and thank him for his patience and professionalism with me during a very difficult time. This has been a humbling experience for me. I hope to use it to grow and learn how to better represent the diverse working families who reside in the great the city of Kingston.”

    If you’re an Ulster resident and would like to check out Berky’s platform – here ya go. I don’t think it’s going over so well.

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Today’s News 28th October 2017

  • Bombshell: Hillary Clinton, DNC Colluded With Russia In An Attempt To Steal The Election From Donald Trump

    Authored by Alex Thomas via SHTFplan.com,

    Fresh off the heels of a shocking report, published by the Washington Post, that confirmed that the infamous “Russia dossier” was actually funded by both the Clinton campaign and Democratic National Committee, an even more startling revelation has emerged – The Clinton-DNC machine colluded with the Russians to fabricate and spread serious disinformation about Donald Trump in a failed attempt at swaying the election in the favor of Hillary Clinton.

    That’s right, in a literal reverse of what the entire mainstream media has fed the American people for over a year, we now have evidence that, either wittingly or unwittingly, the Clinton campaign and the DNC paid for what amounted to disinformation that came directly from “Russian sources”.

     

    Obviously this may seem truly unbelievable to some, but the facts speak for themselves and there is no denying that Democrats paid a shady opposition research company to try and dig up dirt on Donald Trump who then subsequently hired former British spy Christopher Steele. Steele then openly used Russian sources for most of the serious allegations in the “Russia dossier”.

    Clinton Lawyer Hires Fusion GPS For Disinformation

    According to The Washington Post report, which was later confirmed by Politico, Clinton and DNC lawyer Marc Elias hired the “opposition research” (see disinformation) company Fusion GPS who then outsourced the work to former British spy Christopher Steele who eventually went on to release the “Russian dossier” which was chalked full of disinformation, including lurid sexual allegations against Donald Trump.

    The fact that the Clinton campaign would hire Fusion GPS in the first place paints a clear picture of a campaign willing to pay for any dirt on then candidate Donald Trump whether it was true or not. This becomes even more clear when you consider the history of Fusion GPS itself.

    As Breitbart reported, “Fusion GPS is not some usual-usual oppo-research firm. Among other things, the company has been accused of being a “Democrat-aligned misinformation firm” aligned with Russia. While refusing to cooperate with congressional investigations, including taking the fifth, Fusion GPS has also been accused of advocating for “the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.”

    The Federalist’s Mollie Hemingway also noted the serious allegations against the company:

    At a July hearing, Senate Judiciary members were told Fusion GPS helped advocate the interests of corrupt Russian and Venezuelan officials while hiding its foreign work from federal authorities.

     

    Fusion GPS has been accused of illegally working as an undisclosed foreign agent and is currently refusing to comply with federal subpoenas for information on its foreign clients.

    Fusion GPS also has deep connections to the mainstream media, including the fact that it was literally founded by a team of former mainstream media reporters who have deep connections to those currently in the profession.

    Again Hemingway notes:

    The principals at Fusion GPS are well-connected to mainstream media reporters. They are former journalists themselves, and know how to package stories and provide information to push narratives. They are, in fact, close friends with some of the top reporters who have covered the Russia-Trump collusion story.

     

    Fusion GPS has placed stories with friendly reporters while fighting congressional investigators’ attempts to find out the group’s sources of funding. Fusion GPS leaders have taken the Fifth and fought subpoenas for information about the group’s involvement with Russia.

     

    Their close friendships with key reporters on these stories have paid huge dividends for the firm, although these friendships and cooperative relationships have not served the public well.

    Former Spy Used “Russian Sources” For Infamous Trump Dossier 

    This is where the story turns from shocking to downright unbelievable, especially when you consider the year long mainstream media disinformation narrative that claims that the Russians helped Donald Trump win the election.

    The spook working for Fusion GPS, (which was hired by the Clinton campaign) Christopher Steele, openly bragged about his sources being within the Russian government itself.

    Buried deep in a report by Vanity Fair that spends thousands of words trying to pretend that the dossier could be legitimate, is this nugget that paints a picture of direct or indirect collusion between the Clinton team and Russia.

    How good were these sources? Consider what Steele would write in the memos he filed with Simpson: Source A—to use the careful nomenclature of his dossier—was “a senior Russian Foreign Ministry figure.” Source B was “a former top level intelligence officer still active in the Kremlin.” And both of these insiders, after “speaking to a trusted compatriot,” would claim that the Kremlin had spent years getting its hooks into Donald Trump.

     

    Source E was “an ethnic Russian” and “close associate of Republican US presidential candidate Donald Trump.”

    After “gathering” the information, Steele was then directed by Fusion GPS to “brief” the media about the Russian government fueled allegations against Trump.

    As The Daily Caller noted in July:

    In one, dated May 18, Steele says that he was instructed by Fusion GPS to meet with reporters at various outlets in order to publicize some of the allegations made in the dossier.

     

    It has been widely known that Fusion GPS and Steele were in contact with reporters to discuss the dossier. It has been reported that rumors of the dossier were floating around in Washington, D.C. political and journalist circles for months prior to BuzzFeed’s decision to publish it on Jan. 10.

     

    […]

     

    In the response, Steele’s lawyers state that the former spook briefed several reporters at the end of September at the instruction of Fusion GPS, which was working on behalf of a Democratic ally of Hillary Clinton’s.

     

    The outlets were The New York Times, The Washington Post, Yahoo! News, The New Yorker and CNN.

     

    Steele met once more — and again at Fusion GPS’s instruction — with The Times, The Post, and Yahoo! News. Fusion GPS took part in all of those meetings, Steele’s lawyers say.

     

    “In each of those cases the briefing was conducted verbally in person,” the document reads.

     

    In October, Fusion GPS instructed Steele to brief a journalist from Mother Jones. The interview, which was conducted through Skype, was likely with reporter David Corn.

    It doesn’t get any clearer than this. Fusion GPS was paid by Democrats to dig up dirt, that dirt was then supplied by the Russians, and subsequently became a major part of the narrative surrounding Donald Trump and Russia.

    “What you clearly have here is the Clinton campaign openly COLLUDING with a foreign country, with the Russians, to fabricate scurrilous lies about Trump, which were then fed to a willing media as a means to affect their news coverage, and by extension, sway the election,” Breitbart’s John Nolte wrote.

    Fusion GPS “Was Acting On Behalf Of Russia”

    Amazingly, testimony and evidence already exists that Fusion GPS has in the past worked directly for Russia and may have been doing so with the Trump disinformation dossier.

    At a Senate Judiciary Hearing in late July, Hermitage Capital Management chief William Browder testified that the company was acting on behalf of Russia after co-founder Glenn Simpson was hired by a person connected to lawyer Natalia Veselnitskaya to lobby for the repeal of the  Magnitsky Act.

    The following exchange between Browder and Senator Lindsey Graham is shocking to say the least.

    SEN. LINDSEY GRAHAM: This whole story reads like some kind of novel that nobody would buy, it’s got to be fiction, but unfortunately maybe it’s true. Let’s just break down sort of why you’re here. You believe that Fusion GPS should of registered under FARA, because they were acting on the behalf of the Russians?

     

    WILLIAM BROWDER: That’s correct.

     

    SEN. GRAHAM: So, I just want to absorb that for a moment. The group that did the dossier on President Trump hired this British spy, wound up getting it to the FBI. You believe they were working for the Russians?

     

    BROWDER: And in the Spring and Summer of 2016 they were receiving money indirectly from a senior Russian government official.

     

    SEN. GRAHAM: Okay. So, these are the people that were trying to undermine Donald Trump by showing the nefarious ties to Russia. Is that what you’re saying?

     

    BROWDER: Well, what I’m saying with 100% certainty is that they were working to undermine the Magnitsky act and the timing of that.

     

    SEN. GRAHAM: But, the Fusion GPS products apparently as they hired a guy to look into Trump?

     

    BROWDER: Yes.

     

    SEN. GRAHAM: Right

     

    BROWDER: Correct.

    When you put all the evidence together, keeping in mind that this is only what has been released so far, you can see a clear picture of, at the very least, indirect collusion between the highest levels of the Democratic Party and unknown figures within the Russian government. The scheme was then directly propped up and spread by the mainstream media.

    As Nolte so aptly notes, “If purchasing misinformation from Kremlin official as a means to manipulate media coverage and sway public opinion is not colluding with the Russians to rig an election, nothing is.”

  • Spain PM Fires Catalan Government, Calls Snap Elections In Retaliation For Independence Vote

    Update 4: In a live TV address to the nation, Spain's PM Rajoy just announced that it is a "sad day" in which Catalans showed "contempt" for democracy, and ignored the general interest; that the Catalan declaration is unacceptable to majority of Catalans, and that, as a result and as expected, he is firing Catalan president Carles Puigdment, the Catalan police chief, and the entire Catalan government as "prudence" and "serenity" are now needed: "we never wanted to reach this situation".

    Ministries in the central government will assume powers of the Catalan administration.

    The Prime Minister also announced he has dissolved the Catalan Parliament and called for snap elections to be held on December 21 which will be "free, legal and clean".

    As The Spain Report adds, the central government also ordered all of Catalonia's "embassies" abroad closed, along with the region's publicly funded Diplocat diplomacy service, and sacked the director general of the Catalan Police (Mossos), Pere Soler.

    Rajoy also said Spain has enough resources to "recover normality" in Catalonia within the law and thanked the Spanish Socialist Party (PSOE) and Ciudadanos for their support.

    * * *

    Update 3: Spain’s top prosecutor will seek rebellion charges for those responsible for a vote in favor of declaring an independent Catalan republic, an official Spanish spokesman said according to The Independent. The spokesman said the prosecutor is looking to determine if the charges should be limited to the Catalan cabinet, including President Carles Puigdemont and Vice President Oriol Junqueras, or if they should also include members of the parliament’s governing board and lawmakers.

    The official, who spoke under condition of anonymity in line with internal rules, said the charges could be brought as early as Monday. As Mr. Maza warned,"The rebellion crime is punishable by 30 years in prison if it is a crime of considerable gravity, of course…if the Catalan police did not comply with the order, Spain would take over control of the force."

    As a reminder, and as The Spain Report tweeted what happened the last time the Catalan republic was declared, in 1934:, there was i) State of war; ii) Lasted 10 hours and iii) led to 46 dead in Barcelona.

    Puigdemont has called on fellow separatists to remain peaceful ahead of the expected crackdown by Spanish authorities. Facing a crowd of hundreds of supporters packing Catalonia’s parliament building, he said: “In the days ahead we must keep to our values of pacificism and dignity. It’s in our, in your hands to build the republic.” Good luck.

    * * *

    Update 2: Article 155 is now official, after Spain's Constitutional Court lists the series of measures allowing central government to force Catalonia regional administration to obey national law. The two-page document was published Friday in Spain's Official Gazette, in step necessary to becoming law. The measures approved by the Senate follow government proposal, under Article 155 of Constitution. By way of explanation, the actions were taken due to “extraordinary seriousness of the breach of constitutional obligations and the carrying out actions gravely against the general interest” by Catalonia institutions.

    As Article 155 was codified by publication in the Spanish Official Gazette, at the top of the list published by the Constitutional Court was the potential removal from office of the region’s president, vice-president and cabinet. The list was published along with a two-page addendum of modifications by the Senate. The Catalan administration will continue to function, though the central government in Madrid can veto its decisions. Additionally, the region’s police, the 17,000-member Mossos d’Esquadra, must take direct orders from Madrid, which can supplement their role with national police, which already are under control of the central government. The measures took immediate effect on publication.

    * * *

    Update: Just minutes after the Catalan government voted for Independence from Spain, with a former Decision of Independence likely to follow momentarily, over in Madrid wasted no time in responding, and moments ago, with 214 for and 47 against, voted to approve Article 155 of Spain's 1978 Constitution, aka the Nuclear Option which has never been used before, suspending home rule in Catalonia, and giving Prime Minister Rajoy the power to oust the Catalan government.

    What happens next?

    Spain will promptly move to remove the Catalan president, suspend his ministers and assume authority over the region's public media, police and finances, the only question is how, and what this process will look like.

    Indeed, as Bloomberg reported earlier, Spanish politician Garcia Albiol tweeted that Spanish Prime-Minister Mariano Rajoy will restore democracy in Catalonia, adding that courts will reprimand the “plotters.” Furthermore, Spain's El Pais reported that rebellion charges will likely be leveled soon at Catalans for Secession.

    An angry Rajoy spoke to reporters in Madrid after the Catalan parliament declared independence and said that "the Catalan parliament has approved something that in the opinion of the great majority of people doesn’t just go against the law but is a criminal act because it supposes declaring something that is not possible which is the independence of Catalonia.”

    He also said that he will address Spain at the end of the evening.

    In terms of immediate next steps, there will be a Spanish Cabinet Meeting, which has been moved ahead to 5pm local time.

    After that, things may get delicate, especially if Spain sends in the proverbial cavalry.

    Incidentally, here is the historic moment Catalonia declared independence from Spain:

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    * * *
    It's Official! The Catalan Parliament has just voted for independence – 70 'Yes' (needed 68), 10 'No', 2 blank.

    As AP reports, Catalan separatist lawmakers pass motion to establish a new republic independent of Spain, as the opposition boycotts the vote…

    “We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the preamble to the resolution, read out by speaker Carme Forcadell before the ballot.

    Catalan vice-president Oriol Junqueras tweeted…

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    What happens next is anyone's guess, but we suspect it will involve heavy police state intervention and the Franco-ian regime that separatists fear will rear its ugly head.

    The Washington Post reports:

    “The next move could be a formal declaration of statehood, less than a month after a referendum that backed the push for independence […]

     

    If the Senate invokes the never-before-used Article 155 of Spain's 1978 constitution, the central government could move swiftly to remove the Catalan president, suspend his ministers and assume authority over the region's public media, police and finances.”

    The Spanish government will undoubtedly now move swiftly to implement Article 155.

    Spanish PM Rajoy immediately tweeted "I call tranquility to all Spaniards. The rule of law will restore the legality in Catalonia. MR"…

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    And Spanish bond yields are snapping higher…

    And blowing out relative to bunds…

    And Spanish stocks dumped – erasing all oif yesterday's hype-fueled hope-buying…

    *  *  *

    Live Feed: Catalan Speaker reads the independence declaration before the vote…

    “We constitute the Catalan Republic, as an independent and sovereign country, under the rule of law,” said the proposed resolution, read out by the speaker before the vote.

    *  *  *

    Update (0900ET): The Catalan Parliament confirms the secession proposal will be voted in a secret ballot. This immediately led to the PP MPs leaving the parliament chamber.

    *  *  *

    Update (0850ET): Catalan's opposition party members have just abandoned parliamnet as voting begins on minor resolutions (ahead of the big 'independence' decision) but Rajoy's PP remains in session. Additionally, the separatists have called for the ballot to be private.

    *  *  *

    Update (0820ET): CUP Deputy Carles Riera rages that the time has come to "build the republic in a context of fight and resistance."

    “We propose that Catalonia becomes an independent state in the form of republic."

     

    “Today we start the removal of the 1978 regime."

    As Spain's prime minister urged the Senate on Friday to grant his government special constitutional measures that would allow it to take control of Catalonia's autonomous powers and halt the region's independence bid.

    *  *  *

    As we detailed earlier, after yesterday's chaotic Spanish event rollercoaster, when the Catalan leader Carles Puidgement was going to press ahead with independence only to change his mind, and propose elections, before reversing again and punting the independence decision to parliament, we hoped to get some further clarity on how he’s planning to proceed. Today, the chaos continues.

    First, Bloomberg reported that Catalonia would seek approval for elections from Madrid:

    The rebel government of Catalonia is making a last ditch effort to win concessions from Madrid. According to a person familiar with the matter, Catalan President, Carles Puigdemont, wants to convince supporters to accept regional elections instead of a declaration of independence. A senior Catalan official will ask the Spanish government to suspend the process of seizing direct control of the region if there is a snap election.

    However, shortly afterwards, The Spain Report carried breaking news that the secessionists would debate a motion to declare independence in today’s session of the Catalonian Parliament.

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    More from the report:

    Catalan separatist parties—Junts Pel Sí ("Together For Yes") and the CUP (Popular Unity Candidacy)—have registered a motion to declare the independence of Catalonia in the regional parliament.

     

    A copy of the document published by Spanish media included the phrase: "We constitute the Catalan Republic as an independent sovereign democratic, social state of law".

     

    The text would also approve the activation of the secession bill approved by the regional chamber at the beginning of September and voided by the Constitutional Court and "begin the constituent process".

    * * *

    The Speaker's Committee is currently deciding on which motions to accept for the second part of the session in the Catalan Parliament on Article 155, which is due to begin at 12 p.m.

    At the same time, there are unconfirmed reports that police are closing off roads around the regional parliament.  Meanwhile, the Spanish senate has been debating the implementation of Article 155 in Madrid. Rajoy told lawmakers that Spain faced an exceptional situation and asked them to support his proposal on Article 155. The Spain Report shows video of Rajoy receiving a standing ovation.

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    Here are flash reports from Bloomberg on the parliamentary debate in Madrid:

    • Spanish Prime Minister Mariano Rajoy speaks in Senate.
    • Spain’s Rajoy Asks Senate to Support Proposal on Art. 155
    • Rajoy: Nothing Substantial Happened Since Govt Approved ART.155.
    • “The only talks I was invited to was to discuss terms and conditions of Catalan independence,"
    • Spain confronts exceptional situation, Rajoy tells Senate
    • “Exceptional measures should only be adopted when there is no other possible remedy’’:

    As Bloomberg reported this morning, Puigdemont has been running out of options.

    Backed into a corner by his own hardliners and Rajoy’s refusal to give him a dignified way out, Catalan President Carles Puigdemont will address the regional parliament in Barcelona as demonstrators clamor for a declaration of independence. After a day of high drama that saw Puigdemont caught between the might of the Spanish state and the anger of the street, western Europe’s worst constitutional crisis for decades may be coming to a head with the separatist leader running out of options…

     

    The day of confusion saw the president make a televised address after two postponements, lawmakers quit his party and a senior Catalan official jump ship, all while Spanish ministers were repeating their mantra that the Catalans must be brought to heel. The Spanish stock market posted its biggest gain since Oct. 5 only to pare the advance as events unfolded. Puigdemont said he had considered calling the regional vote, but he didn’t get the concessions he sought from officials in Madrid. "I tried to get the guarantees to carry out these elections, but didn’t get a responsible answer,” he said.

    Last night, reports from the secessionist camp implied that independence would be declared.

    "We are winning," Lluis Corominas, the head of Puigdemont’s PDeCat group, told lawmakers on Thursday night. "We should materialize the effects of the Oct. 1 referendum and implement them." That’s code for declaring independence.

    Maybe they are correct, but until then this remains a dangerously fluid and volatile situation.

  • Nobody's Buying Hamptons Mega-Mansions Because 'Small Is The New Big'

    Any realtor worth their salt will tell you, when it comes to the home-buying habits of wealthy hedgies and bankers, gaudy McMansions and sprawling estates are so last season.

    Or, as they say in Greenwich: “Small is the new big."

    Owners of large homes in tony Hamptons neighborhoods hoping to cash in on a frothy housing market before the inevitable rise in mortgage rates will be disappointed to learn that the trend of buyers favoring lower-priced homes continued in the third quarter, according to the latest Douglas Elliman Real-Estate Report. This left the high end of the market in a double-bind as supplies of new homes hit the market while sales tapered off…

    Purchasers agreed to pay more than the asking price in 10 percent of deals for properties under $3.3 million — this quarter’s definition of “non-luxury” homes, making up the bottom 90 percent of the market, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the biggest share of transactions with bidding wars since the firms began tracking the data in the second quarter of 2016.

     

    In their zeal for lower-end deals, buyers snapped up condos as well. Those units — with a median sale price of $567,500 — were available for just 97 days on average before going under contract, the fastest clip in six years of record-keeping. On the high-end, buyers showed less interest in acquiring luxury homes than sellers did in listing them. Inventory in that top 10 percent of the market jumped 22 percent, the biggest pile-up in two years.

     

    “The market is looking towards those smaller, more manageable homes,” said Carl Benincasa, a regional vice president at Douglas Elliman who oversees sales in the Hamptons. “That’s certainly been a trend we’ve been observing.”

    Bloomberg, which obtained an advance copy of the report, noted that the Hamptons housing market often parallels performance in the financial industry, seeing as many buyers of luxury homes out east are wealthy finance types.

    With markets at record highs, the Hamptons housing market is doing reasonably well – but buyers’ unwillingness to snap up the most expensive homes in a way mirrors the trepidation surrounding stretched stock valuations and record low volatility.

    With stocks at record highs, people are in a buying mood in the Hamptons. The beachside towns on Eastern Long Island, whose fortunes are closely linked to the performance of the financial industry, had 517 total sales in the three months through September — or 12 percent more than the 10-year quarterly average, Miller Samuel and Douglas Elliman said. Even with all that buying, inventory declined only in the non-luxury category, with listings dropping 10 percent from a year earlier to 1,143.

     

    Deals for less than $500,000 fell 12 percent to 57 — because there weren’t many such properties available, Town & Country Real Estate said in its report on Hamptons. But sales of homes priced between $500,000 and $999,000 jumped 22 percent to 131, and those between $1 million and $1.99 million climbed 12 percent to 76, the brokerage said.

    One realtor noted that inventory is thinnest in the under-$1 million category, which has forced some buyers to the next rung of the market.

    “When you look at the inventory under a million, that’s the largest shortage, so buyers stepped up to the next level of the market,” said Ernest Cervi, a senior vice president at Corcoran Group, which released its own report Thursday.

    One couple recounted their struggle finding a new home in the Hamptons for under $1 million after selling their old home for $1.4 million.

    For Brian DeSesa, it was much easier to sell his under-$2 million home than it was to buy one in that price tier. Sensing the market demand for lower-cost properties, he and his wife listed their three-bedroom Sag Harbor Village house in June at $1.45 million. It went into contract in July, to a buyer offering $1.35 million but willing to pay all cash and close within 14 days, said Jessica von Hagn, the Brown Harris Stevens broker who marketed the property.

     

    Then came the hard part: finding a new house in the area for less than $1 million. The couple bid on at least three such properties, offering the asking price each time and getting outbid within hours, said DeSesa, 36, a land-use attorney with the Adam Miller Group in

     

    Bridgehampton. On the next try, they offered the $795,000 asking price on a ranch-style home — and then, in a second round of bidding, offered $860,000, which won them the deal.

     

    “It’s pure competition,” von Hagn said. “At the $1 million mark, you’re competing with year-rounders trying to live out there, you’re competing with builders who are going to tear it down, and you’re competing with flippers.”

    To be sure, there were still some ultra-luxury deals in the quarter, including two for more than $20 million, the same as a year earlier, Bloomberg reported. Purchases between $5 million and $9.99 million plummeted 56 percent to just 11. Sales were up 30 percent in Bridgehampton, with six deals over $10 million, but plunged 29 percent in the Sag Harbor area, where none of the 17 transactions were for more than $5 million.

    Of course, as we noted last quarter, “smaller” in the Hamptons is purely relative, because apparently there’s nothing more modest among today’s Hamptons set than trading a 13,000 square-foot home for an 8,000 square-foot home.
     

  • J. Edgar Hoover: "Need To Convince Public That Oswald Is Real Assassin"

    Amid the thousands of new files released yesterday – though less than expected – were two intriguing memos to, and from, FBI Director J. Edgar Hoover on November 24th, 1963 – the day that Jack Ruby killed Lee Harvey Oswald as the gunman was being transported to the Dallas County Jail after the assassination of President John F. Kennedy.

    In a memo issued by Hoover, he appeared to be particularly concerned that the public would have to be compelled to believe that Oswald was a lone actor – not part of a larger conspiracy.

    "There is nothing further on the Oswald case except that he is dead."

    In the 1964 Warren Report on Kennedy's assassination, NBC notes, Hoover was firm in stating that he hadn't seen "any scintilla of evidence" suggesting a conspiracy – a sentiment he expressed in other public forums, as well, but not in words as blunt as those he used the day Oswald was killed.

    Referring to Nicholas Katzenbach, the deputy attorney general at the time, Hoover dictated:

    "The thing I am concerned about, and so is Mr. Katzenbach, is having something issued so we can convince the public that Oswald is the real assassin."

    It's not clear from the memo whether Hoover thought there might have been a conspiracy but didn't want it to be known or whether he sincerely believed Oswald acted alone and hoped to head off public fear and confusion. Hoover also indicated that his concern may have been influenced, in part, by diplomacy, dictating that there could be serious international complications if the public thought Oswald might have been part of a larger plot. Katzenbach is known from previously released documents to have shared Hoover's concern, writing in a memo the next day, on Nov. 25, 1963, that:

    "the public must be satisfied that Oswald was the assassin; that he did not have confederates who are still at large; and that evidence was such that he would have been convicted at trial."

    Interstingly, Hoover was angry at Oswald's murder (especially after the police had been warned by The FBI that Osawld's life was in danger)…

    "Oswald having been killed today after our warnings to the Dallas Police Department was inexcusable," Hoover dictated.

     

    "It will allow, I am afraid, a lot of civil rights people to raise a lot of hell because he was handcuffed and had no weapon.

     

    There are bound to be some elements of our society who will holler their heads off that his civil rights were violated — which they were."

    Though hard to read, here is Hoover's full memo…

    Then to top things off, in a memo sent back to FBI Director Hoover, it was confirmed that "no effort should be made to defend alleged assassin Lee H. Oswald or "scream frame-up."

    Of course, we suspect there are plenty more interesting revelations within the files that were released and perhaps the ones that have not been released… Julian Assange's Wikileaks has offered a $100,000 reward for any evidence of wrongdoing…

  • Saudi Arabia Might Recognize Israel Because Of NEOM

    Authored by Andrew Korybko via Oriental Review,

    The half-a-trillion-dollar initiative to build a tristate city at the Saudi, Egyptian, and Jordanian border in the Gulf of Aqaba will more than likely lead to Riyadh recognizing Israel and integrating Tel Aviv into the project.

    The ambitious Saudi Crown Prince Mohammed Bin Salman unveiled a $500 billion project at an investment forum earlier this week in an effort to bring some serious substance to his Vision 2030 project of fundamentally diversifying his country’s oil-dependent economy in the coming decade. The proposal calls for a gigantic city called NEOM to be built at the entrance to the Gulf of Aqaba in the northeastern corner of the Red Sea, with the plan being for it to eventually extend into neighboring Egypt and Jordan as well. The Crown Prince promised that it would be a technologically advanced city with its own laws and administration, and it will also be free from anything “traditional”.

    The latter remark hints that Mohammed Bin Salman won’t allow the Kingdom’s traditional Wahhabi socio-cultural “regulations” to be enforced there, which goes along with his other headline-grabbing statement during the event when he said that Saudi Arabia will “return…to moderate Islam” and “swiftly deal a blow to extremist ideologies”. Quite clearly, as analyzed in the author’s earlier piece this month about Saudi Arabia’s shifting grand strategy, a “deep state” conflict is indeed being fought in the country between its monarchic and clerical factions, with the former poised to carry out a “soft coup” against the latter as it seeks to “modernize” the country. This will surely result in some behind-the-scenes tumult in the coming future, if not overt destabilization, but the point of the present article isn’t to dwell too much on that tangent.

    Instead, it’s relevant to have brought that up in order to make the case that Saudi Arabia is on the cusp of an unprecedented paradigm change that will likely see it recognizing Israel if the monarchy is successful in snuffing out the clerics’ political influence. Saudi Arabia’s Egyptian and Jordanian NEOM partners have already recognized and signed peace treaties with Israel, and Riyadh is known to be coordinating with Tel Aviv in crafting a comprehensive anti-Iranian regional policy, amongst other strategic commonalities that they share. Moreover, the secret meetings between Saudi Arabia and Israel over the years suggest that their relationship is much warmer in private than either side publicly presents it as for their own respective domestic political reasons.

    Israel has always wanted relations with Saudi Arabia, though Riyadh has traditionally shirked away from this because it wanted to present itself as a strong supporter of the Palestinian cause, made all the more symbolic by the Saudi monarchy’s custodianship over the Two Holy Mosques given the religious dimensions of the Israeli-Palestinian conflict. However, if Mohammed Bin Salman comes out on top in his “deep state” “soft coup” against the Wahhabi clerics, then he can easily lay the “blame” on them for his country’s refusal to recognize Israel after all of these decades. Not only could he be interested in doing this as the ultimate expression of his country’s radically transformed identity under his stewardship, but he might be just as importantly driven by the geostrategic imperatives related to Vision 2030’s flagship NEOM project.

    Red-Med Railway

    The Gulf of Aqaba was chosen not just because it would allow NEOM to spread into Egypt and Jordan, but also because of its proximity to Israel, which is promoting its “Red-Med” railway proposal as the perfect Mideast complementary component of the New Silk Road. Tel Aviv keenly knows that the Chinese are always looking for backup plans and transport route diversification in order to not be too dependent on any single connectivity corridor, and in this case, overland rail transit from the Gulf of Aqaba to the Eastern Mediterranean via Israel comes off as exceedingly attractive to Beijing’s strategists. Furthermore, China has fantastic relations with both Saudi Arabia and Israel, so from Beijing’s perspective, this is the perfect Mideast “win-win”, especially if the People’s Republic can find a way to insinuate that its possible financing of both the NEOM and “Red-Med” projects contributed to bringing peace to the Mideast.

    In addition, there’s also the Russian factor to take into consideration, and it’s objectively known – though commonly denied in the Alt-Media Community – that Moscow and Tel Aviv are on excellent terms with one another and basically cooperate as allies in Syria. When accounting for the fast-moving Russian-Saudi rapprochement and Moscow’s envisioned 21st-century grand strategic role in becoming the supreme balancing force in Eurasia, it’s likely that Russia would be in favor of any Saudi recognition of Israel and Tel Aviv’s integration into the NEOM project because it would then allow the Russian business elite both in the Russian Federation and Israel to invest in this exciting city-state and the complementary “Red-Med” Silk Road corridor.

    Seeing as how Mohammed Bin Salman is trying to purge the clerics’ political influence from the Kingdom, it’s very possible that Saudi Arabia will end up recognizing Israel in the near future and blaming its decades-long delay in doing so on the Wahhabis. The grand intent behind this isn’t just to formalize the Saudi-Israeli anti-Iranian partnership or to show the world just how serious the Crown Prince is in changing the course of his country, but to please Riyadh’s newfound Multipolar Great Power partners in Moscow and Beijing, both of which enjoy exceptional relations with Tel Aviv but would probably be reluctant to invest in the Kingdom’s NEOM city-state project so long as its connectivity access remained dependent on the Suez Canal chokepoint.

    Russia and China would feel more strategically secure if Israel was incorporated into this megaproject so that its territory could be used for overland transshipment between the Red and Mediterranean Seas via the “Red-Med” railway proposal, which would then make NEOM infinitely more attractive from a logistics perspective for all sorts of investors.

    If Saudi Arabia doesn’t recognize Israel, then this non-Suez workaround is impossible and the NEOM city-state loses its grand strategic significance in the context of the Multipolar World Order, which could consequently lead to a lack of investment and therefore the potential failure of Vision 2030’s flagship project. As such, due to the economic-strategic imperatives associated with NEOM, as well as the geopolitical paradigm shift staking place in Saudi Arabia, Riyadh will probably recognize Israel in the coming future in order to guarantee that its city-state initiative succeeds and ultimately transitions the Kingdom away from its oil-exporting dependency.

  • Orban Launches Intelligence Probe Into George Soros' "Open Society" Network

    Apparently, Hungarian Prime Minister Viktor Orban thinks his propaganda campaign to discredit Hungarian-born billionaire George Soros – Orban’s political archnemesis – hasn’t been sufficiently effective.

    As Orban’s ruling party gears up for parliamentary elections in April – where it is the prohibitive favorite to win largely thanks to its refusal to accept refugees under a plan devised by the European Commission – the prime minister has instructed his intelligence services to map what he described as the networks run by the billionaire financier’s “empire” targeting his country, Bloomberg reported.

    Intelligence agencies will help evaluate what he sees as efforts by Soros to get Hungary punished by EU institutions pursuing a “mixed-population” continent, Orban said in an interview with Kossuth Radio on Friday.

    The Associated Press added that the investigation will also focus on alleged Hungarian members of the network.

    Intelligence agencies will help evaluate what Orban sees as efforts by Soros to get Hungary punished by EU institutions pursuing a “mixed-population” continent, Orban said in an interview with Kossuth Radio on Friday.

    Orban speaks often of a coming split in Europe between “migrant-free zone” and those in the west who refuse calls to “haul” undocumented migrants away.

    The unraveling of the friendship between Orban and Soros in some ways mirrors the falling out between Turkish President Recep Tayyip Erdogan and US-based cleric Fehtullah Gulen in terms of the extent of the deterioration.

    Three decades ago, billionaire financier George Soros paid for a young Viktor Orbán to study in Britain. And as recently as 2010, Soros donated $1 million to Orbán’s government to help the cleanup effort following the infamous “red sludge” disaster.

    But the once-warm relationship between the two men has deteriorated substantially over the past seven years, as Orban has drifted further to the right. In 2014, the leader of Hungary’s Fidesz party declared he would seek to model Hungary’s government after “illiberal” democracies like the government of Russian President Vladimir Putin. In response, Soros this summer denounced his former protege and accused him of creating a “mafia state” in Hungary.

    One of dozens of billboards around Hungary bearing anti-Soros messaging…

    Orban responded by accusing Soros's network of using the European Union to achieve its own aims, including the promotion of mass migration into Europe.

    Orban was no doubt provoked to launch the probe by reports Soros has donated $18 billion from his family office to his “Open Society” foundation, his primary tool for influence policy throughout the west. The group funds a network of dozens of organizations that fund liberal, globalist causes throughout Europe and the US. At times, recipients of funding have included Black Lives Matter groups, and even Antifa.

    But will Orban’s investigation morph into a full-on, Turkey-style purge of anyone with ties to Soros’ linked organizations, regardless of their actual complicity? That, of course, remains to be seen.
     

  • Mueller Reportedly Ready To File First Charges In Russia Probe

    Update (10:35 pm ET): For what it's worth, Reuters has has "confirmed" the report after talking to a single source…

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    * * *

    Five months after Assistant Attorney General Rod Rosenstein tasked Robert Mueller with taking over the Justice Department investigation into possible collusion between the Trump campaign and Russia, CNN is reporting that the first charges have been filed, and that arrests could be made in the coming days.

    A federal grand jury in Washington, DC, on Friday approved the first charges in the investigation led by special counsel Robert Mueller, according to sources briefed on the matter.

     

    The charges are still sealed under orders from a federal judge. Plans were prepared Friday for anyone charged to be taken into custody as soon as Monday, the sources said. It is unclear what the charges are.

     

    A spokesman for the special counsel's office declined to comment.

    To be sure, CNN's version of events leaves room for doubt. And importantly, it doesn't name the subject of the charges.

    On Friday, top lawyers who are helping to lead the Mueller probe, including veteran prosecutor Andrew Weissmann, were seen entering the court room at the DC federal court where the grand jury meets to hear testimony in the Russia investigation.

    Reporters present saw a flurry of activity at the grand jury room, but officials made no official announcements. The flurry… implies someone being charged… presumably – though CNN says it talked to a source close to the investigation who corroborated its suspicions.

    The special counsel's investigation has focused on two things: potential collusion between the Trump campaign and Russia, and obstruction of justice by the President, who might have tried to impede the investigation. CNN has previously reported that Mueller's team was scrutinizing Trump and his associates' financial ties to Russia. Former campaign executive Paul Manafort and Trump son-in-law have both been subject to intensive scrutiny during the investigation. Manafort has had his financial records thoroughly probed and his home raided by the FBI. Mueller has also scrutinized Manafort's foreign lobbying efforts, as well as those of former National Security Adviser Michael Flynn.

    Mueller impaneled a grand jury over the summer, a sign that he intended to file charges. If the report is accurate, it's certainly an interesting coincidence that Mueller is moving ahead with charges just as calls to shut down his investigation are picking up steam. Meanwhile, Congress has launched several investigations into the Obama-era Uranium One deal to scrutinize the Clinton's dealings with the Russians.

    Republicans have been skeptical of Mueller’s ability to be impartial in the investigation – suspicions that have intensified following reports that Hillary Clinton and the Democratic National Committee helped fund research into the infamous "Trump dossier." Rep. Trent Franks of Arizona told Fox News Friday that “the federal code could not be clearer – Mueller is compromised by his apparent conflict of interest in being close with James Comey.”

    New Jersey Gov. Chris Christie suggested Friday that Mueller should "step aside"

    "If the facts that you just laid out are true, then somebody with Bob Mueller's integrity will step aside, and should," Christie said. The Russia probe was launched in the summer of 2016 by then-FBI Director James Comey.

  • The One Paragraph You Need To Read From The JFK Assassination Files That May Change Everything

    TruePundit.com warns that one haunting paragraph unearthed from 3,000 never-before-seen documents will shake Patriots to their core about the assassination of President John F. Kennedy.

    Or perhaps worse. Make that haunting three paragraphs.

    This is not pretty.

    But it is likely President Donald Trump understands what Kennedy comprehended, which now appears to have led to his murder:

    The out-of-control shadow government in this country threatens the fabric and the future of the United States.

    See for yourself.

    As a reminder, here is the position of the alleged shooter explained…

    So how do 'they' explain this…

    From Jan 31st 1964 FBI memo

    For clarity…

    …the "Surgeon General's Report" on the assassination stated that the first bullet entered the President's throat below the adams apple, clearly showing that two persons were involved with the first shot being fired from the bridge across the park way in front of the car.

     

    To further substantiate this, POTITO said there was a bullet hole in the wind shield of the President's car

    Not exactly the narrative that was sold to the world – and certainly not the narrative that J. Edgar Hoover proclaimed must be defended to the world.

    Here is Douglas P. Horne, via LewRockwell.com, detailing the photographic evidence of a bullet hole in JFK's limousine's windshield "hiding in plain sight."

    In 2009, I believed I had discovered new evidence in the JFK assassination never reported by anyone else: convincing photography of the through-and-through bullet hole in the windshield of the JFK limousine that had been reported by six credible witnesses. I revisited that evidence today, and am more convinced than ever that the bullet hole in the limousine windshield is what I am looking at in those images. But the readers of this piece don’t have to take my word for it — you can examine the images yourself, and make up your own minds. The evidence is contained in one of the banned, suppressed episodes of Nigel Turner’s The Men Who Killed Kennedy — episode 7 in the series, called “The Smoking Guns,” which was aired in 2003, and then removed from circulation by The History Channel in response to intense political pressure by former LBJ aides Jack Valenti and Bill Moyers.

    I’ll tell you about the stunning evidence I have found in that episode at the end of this article, but first we need to set the stage by reviewing the eyewitness testimony about the damage to the windshield observed the day of JFK’s assassination, on Friday, November 22nd, 1963; as well as three days later, on Monday, November 25th, 1963.

    Introduction

    Before I reveal the details about the “new” photographic evidence I am talking about here, let’s review the Big Picture, the “evidentiary landscape” on this issue (see pages 1439-1450 of Volume V of my book, Inside the Assassination Records Review Board, for full details):

    (1) Dallas motorcycle patrolmen Stavis Ellis and H. R. Freeman both observed a penetrating bullet hole in the limousine windshield at Parkland Hospital. Ellis told interviewer Gil Toff in 1971: “There was a hole in the left front windshield…You could put a pencil through it…you could take a regular standard writing pencil…and stick [it] through there.” Freeman corroborated this, saying: “[I was] right beside it. I could of [sic] touched it…it was a bullet hole. You could tell what it was.” [David Lifton published these quotations in his 1980 book, Best Evidence.]

    (2) St. Louis Post-Dispatch reporter Richard Dudman wrote an article published in The New Republic on December 21, 1963, in which he stated: “A few of us noted the hole in the windshield when the limousine was standing at the emergency entrance after the President had been carried inside. I could not approach close enough to see which side was the cup-shaped spot which indicates a bullet had pierced the glass from the opposite side.”

    (3) Second year medical student Evalea Glanges, enrolled at Southwestern Medical University in Dallas, right next door to Parkland Hospital, told attorney Doug Weldon in 1999: “It was a real clean hole.” In a videotaped interview aired in the suppressed episode 7 of Nigel Turner’s The Men Who Killed Kennedy, titled “The Smoking Guns,” she said: “…it was very clear, it was a through-and-through bullet hole through the windshield of the car, from the front to the back…it seemed like a high-velocity bullet that had penetrated from front-to-back in that glass pane.” At the time of the interview, Glanges had risen to the position of Chairperson of the Department of Surgery, at John Peter Smith Hospital, in Fort Worth. She had been a firearms expert all her adult life.

    (4) Mr. George Whitaker, Sr., a senior manager at the Ford Motor Company’s Rouge Plant in Detroit, Michigan, told attorney (and professor of criminal justice) Doug Weldon in August of 1993, in a tape recorded conversation, that after reporting to work on Monday, November 25th, he discovered the JFK limousine — a unique, one-of-a-kind item that he unequivocally identified — in the Rouge Plant’s B building, with the interior stripped out and in the process of being replaced, and with the windshield removed. He was then contacted by one of the Vice Presidents of the division for which he worked, and directed to report to the glass plant lab, immediately. After knocking on the locked door (which he found most unusual), he was let in by two of his subordinates and discovered that they were in possession of the windshield that had been removed from the JFK limousine. They had been told to use it as a template, and to make a new windshield identical to it in shape — and to then get the new windshield back to the B building for installation in the Presidential limousine that was quickly being rebuilt. Whitaker told Weldon (quoting from the audiotape of the 1993 interview): “And the windshield had a bullet hole in it, coming from the outside through…it was a good, clean bullet hole, right straight through, from the front. And you can tell, when the bullet hits the windshield, like when you hit a rock or something, what happens? The back chips out and the front may just have a pinhole in it…this had a clean round hole in the front and fragmentation coming out the back.” Whitaker told Weldon that he eventually became superintendent of his division and was placed in charge of five plant divisions. He also told Weldon that the original windshield, with the bullet hole in it, had been broken up and scrapped — as ordered — after the new windshield had been made.

    When Doug Weldon interviewed Whitaker in August of 1993, his witness insisted on anonymity. Weldon reported on the story without releasing Whitaker’s name in his excellent and comprehensive article titled: “The Kennedy Limousine: Dallas 1963,” which was published in Jim Fetzer’s anthology Murder in Dealey Plaza, in 2000. After Weldon interviewed Whitaker in August of 1993, Mr. Whitaker subsequently — on November 22, 1993 (the 30th anniversary of President Kennedy’s assassination) — wrote down all he could remember about the events he witnessed involving the Presidential limousine and its windshield. After George Whitaker’s death in 2001, his family released his written testament to Nigel Turner, who with their permission revealed Mr. Whitaker’s name, as well as the text of his “memo for history,” in episode 7 of The Men Who Killed Kennedy, “The Smoking Guns.”

    In “The Smoking Guns,” the text of Whitaker’s memo can be read on the screen employing freeze frame technology with the DVD of the episode. It said, in part: “When [I] arrived at the lab the door was locked. I was let in. There were 2 glass engineers there. They had a car windshield that had a bullet hole in it. The hole was about 4 or 6 inches to the right of the rear view mirror [as viewed from the front]. The impact had come from the front of the windshield. (If you have spent 40 years in the glass [illegible] you know which way the impack [sic] was from.”

    (5) The sixth credible witness to a bullet hole in the windshield of the limousine was Secret Service agent Charles Taylor, Jr., who wrote a report on November 27, 1963 in which he detailed his activities providing security for the limousine immediately after the car’s return to Washington following the assassination. The JFK limousine and the Secret Service follow-up car known as the “Queen Mary” arrived at Andrews AFB aboard a C-130 propeller-driven cargo plane at about 8:00 PM on November 22, 1963. Agent Taylor rode in the Presidential limousine as it was driven from Andrews AFB to the White House garage at 22nd and M Streets, N.W. In his report about what he witnessed inside the White House garage during the vehicle’s inspection, he wrote: “In addition, of particular note was the small hole just left of center in the windshield from which what appeared to be bullet fragments were removed.”

    Summary of the Eyewitness Testimony About the Windshield Bullet Hole

    Summarizing, six credible witnesses — Stavis Ellis, H. R. Freeman, Richard Dudman, Evalea Glanges, George Whitaker, and Charles Taylor — all reported seeing a bullet hole in the windshield of JFK’s limousine either on the day of the assassination (for five of the six witnesses), or on the following Monday (in the case of Mr. Whitaker, who did not see the limousine and its windshield until he reported to work at the Ford Motor Company’s Rouge Plant, in Detroit, on Monday morning, November 25th, 1963).

    Two of these witnesses — Evalea Glanges and George Whitaker — were absolutely positive that the bullet causing the damage had been a shot from the front, which had entered the front surface of the windshield, and exited the inside surface.

    WHY IS THIS IMPORTANT? Because if true, the windshield bullet evidence alone disproves the lone assassin myth aggressively promoted by the U.S. government for 49 years now, since the accused assassin, Lee Harvey Oswald, was supposedly firing from above and behind the limousine as it traveled down Elm Street.

    The Windshield Evidence Was Twice Switched-Out — Substituted — By the U.S. Government

    The windshield in evidence today at the National Archives is not the windshield that was in the Presidential limousine on Elm Street, in Dallas, on November 22, 1963. It simply cannot be. Why? Remember, according to George Whitaker, Sr. of the Ford Motor Co., the original was destroyed, per company orders, after it was used as a template to make a replacement on November 25th, 1963.

    But it gets much worse than that. The first replacement, the one installed by Whitaker’s two lab technicians in Detroit, was damaged on the wrong side by an incompetent Secret Service organization (incompetent not only at protecting the 35th President, but also in implementing a cover-up). Secret Service agent Roy Kellerman (who rode in the right front seat of the limousine in Dallas) testified before the Warren Commission, in March of 1964, that when he examined the windshield (obviously the replacement, installed by Whitaker’s team in Detroit) on November 27th, it was smooth on the outside, and damaged on the inside. This is consistent with damage caused by an impact on the front side of the windshield. (Safety glass exhibits damage on the opposite side from which it is struck). Researcher Robert P. Smith (as reported by David Lifton in Best Evidence) interviewed a Mr. Bill Ashby, crew leader at the Arlington Glass Company, who told Smith he removed the limousine’s windshield in Washington, D.C. on November 27th; this occurred after Roy Kellerman had felt the interior surface earlier that day and determined it to be damaged on the inside, and smooth on the outside.

    But the windshield at the National Archives today exhibits long cracks — not a through-and-through bullet hole — and is damaged on the outside, which is the opposite of what Kellerman noted by physical examination on November 27th.

    Co-owner Willard Hess of the automotive firm Hess and Eisenhardt in Cincinnati, Ohio told Doug Weldon that his company also replaced the windshield in the Presidential limousine, and that the glass removed was standard safety glass — consistent with what George Whitaker said his team reinstalled in the limousine in Detroit, immediately after the assassination. Hess and Eisenhardt replaced the standard safety glass with special bullet resistant glass made by the Pittsburgh Plate Glass Company. (Presumably, the windshield removed by Hess and Eisenhardt was the second new windshield installed — by the Arlington Glass Company — on November 27th, 1963, and is the one in the National Archives today.) Mr. Hess told Weldon that the windshield his company removed was not damaged at the time it was removed.

    The clear implication here is that the windshield in the Archives today, which exhibits cracks but not a bullet hole, was intentionally damaged by someone involved in the cover-up AFTER its removal by Hess and Eisenhardt.

    This distressing (and depressing) tale of cover-up, deceit, and deception mirrors what was going on with the JFK medical evidence (namely, the President’s cranial wounds and throat wound; and the autopsy photographs and x-rays), and the Zapruder film, during the weekend following the assassination — that is, alteration and gross substitution. The pattern is the same, and the pattern is one of lying, and intentionally covering up the truth, by destroying some evidence, and substituting altered evidence in its place. All of this substitution of evidence — tampering with wounds prior to the commencement of the autopsy through clandestine post mortem surgery; the alteration of some of the key autopsy photographs and x-rays (and the destruction of others); and the alteration of the Zapruder film — was all intended to suppress evidence of shots from the front (i.e., proof of conspiracy), so the government could more easily promote its lone assassin cover story.

    …And the U.S. Government Later Suborned Perjury in the Matter of the Damage to the Limousine Windshield

    Unfortunately for Mr. Charles Taylor of the Secret Service, he — like Galileo Galilei before the Inquisition in the 17th century — was forced to recant, for he had committed heresy when he wrote in his official report on November 27th that he had observed a bullet hole in the windshield of the limousine as the car was closely examined in the White House garage the evening of the assassination, in 1963. In his 1976 recantation, an affidavit prepared for the House Select Committee on Assassinations (HSCA), Taylor indicated that he changed his mind after examining the windshield stored in the Archives on December 19, 1975. Like Galileo, when prompted by his inquisitors, Taylor reversed himself, saying: “…I never examined this apparent hole [on November 22, 1963] to determine if there had been any penetration of the glass, nor did I even get a good look at the windshield in well-lighted surroundings…”. This is hardly credible. SA Kinney drove JFK’s limousine from Andrews AFB to the White House garage on November 22nd, 1963, and Taylor was the only passenger. The back seat bench (as revealed by horrifying color photographs taken in the White House garage) was still covered with gore, so we know Taylor did not sit there amidst the blood and brain tissue; and it is most doubtful that he sat in one of the uncomfortable jump seats in the middle of the car. Surely, he sat in the right front seat of the limousine all the way from Andrews AFB, to the garage where it was examined that evening — an ideal spot for noticing the bullet hole in the windshield, which would have been within arm’s reach for him. Inevitably, when the interior of the car was disassembled that evening inside the White House garage by FBI and Secret Service agents working together, the lights must have been on for this crucial joint inspection! Taylor reported on their activities in detail in his report, prepared on November 27th, 1963. The report makes clear that the agents could see what they were doing. In that context, consider Taylor’s written statement in his 1976 HSCA affidavit, about thirteen years later, in which he stated: “I have no doubt that the cracks [seen in the windshield placed in the Archives and in official photographs]…cracks in the inner layers of the glass only, are the ones I noticed on the trip from Andrews Air Force Base…it is clear to me that my use of the word ‘hole’ to describe the flaw in the windshield was incorrect.” Taylor’s sworn affidavit in 1976, shortly after he was asked by someone in government to examine the switched-out windshield deposited in the Archives, can only be viewed and described for what it was: perjury.

    Previously Known Photographic Evidence of a Windshield Bullet Hole

    As I documented in chapter 15 of my book, Inside the Assassination Records Review Board, the famous “Altgens photo” taken on Elm Street, the one reported to be equivalent to Zapruder frame 255 in the extant film, appears to many who study it to show a bullet hole in the windshield in some of the versions of that photograph that have been published: namely, in The Torch Is Passed (1964), on page 16; in Groden’s The Killing of a President, on pages 30 and 36; on page 314 of Trask’s Pictures of the Pain; and in the version published in Fetzer’s Murder in Dealey Plaza, on page 149. The apparent bullet hole detected by many viewers in the Altgens photo appears to be just to the right of the rightmost edge of the rear view mirror, as seen from the front. But there is another Altgens photo taken on Elm Street, showing Jackie Kennedy on the trunk of the limousine after the assassination, which also shows damage in the area of the windshield that is left-of-center, as seen from inside the car. Frustratingly, the damage seen in this photograph appears to be some cracks emanating from a frosted white area of the windshield that is left-of-center. It is most clearly seen in The Torch Is Passed, on page 17; in my view, it is unclear whether we are looking at a round bullet hole with two cracks emanating from it, or simply cracks. The poor quality versions of this image published in The Killing of a President (on page 42) and in Pictures of the Pain (on page 316) are useless in resolving this issue.

    Therefore, any additional photographic evidence captured the day of the assassination might prove decisive in resolving the windshield debate, once and for all — which leads us back to the headline of this journal entry: “Photographic Evidence of Bullet Hole in JFK Limousine Windshield Hiding in Plain Sight.”

    HIDING IN PLAIN SIGHT SINCE 2003

    On pages 1473-1474 of Volume V my book (in chapter 16), I wrote about the circumstances in which The History Channel, in 2003, was forced by political pressure and by threat of legal action to stop airing the remarkably popular seventh, eighth, and ninth episodes of the series The Men Who Killed Kennedy: “The Smoking Guns,” “The Love Affair,” and “The Guilty Men.” Not only did The History Channel agree to stop broadcasting the three episodes (which were getting very high ratings), but it also pulled all of the DVDs from stores (where they were selling like hotcakes), and agreed to stop selling the three episodes, which were packaged together in a two-disc, three episode A & E network video product titled: The Men Who Killed Kennedy: The Final Chapter, Cat. No. AAE-71255. (Thanks to Phil Singer of Chicago, I own a set of these three banned DVDs.)

    Not only did former LBJ aides Jack Valenti and Bill Moyers engage in a high-profile publicity campaign against The History Channel, but an enraged Jack Valenti (who had long been the chief lobbyist in the nation’s capital for the motion picture industry) summoned the executive producer of episodes 7, 8, and 9 (including the LBJ episode, “The Guilty Men”) — Dolores Gavin — to Washington, D.C., where she was given the “Valenti treatment,” i.e., browbeaten and intimidated in private, in a rather brutal fashion. (I was informed of this by a Hollywood-based professional who had worked with her on the project; Dolores Gavin herself was the source of the information.) Shortly afterwards, The History Channel succumbed to this overt censorship and all three episodes were added to a new, twenty-first century Index Expurgatorius.

    The presumptive cause of this Holy Edict of the American Establishment was the LBJ episode, “The Guilty Men,” which fingered Lyndon Baines Johnson with involvement in the JFK assassination conspiracy. But in retrospect, I now wonder if perhaps the real, principal (but unacknowledged) cause of the suppression was actually the episode titled “The Smoking Guns.” The LBJ episode may have simply been the excuse to ban “The Smoking Guns,” for this episode contains multiple evidentiary proofs of a U.S. government cover-up of the Kennedy assassination evidence.

    The Stunning Content of “The Smoking Guns”

    There is some “B-roll” in “The Smoking Guns” episode, only a little over two seconds long, which definitely appears to show the bullet hole in the limousine windshield — the through-and-through bullet hole described by the six credible witnesses cited above. This is shown during the segment of the program in which Evalea Glanges was interviewed. This “B-roll” footage appears between the times of 14:02 and 14:04 on the DVD, and consists of a total of 84 video frames (there are 30 video frames per second in a U.S. television broadcast). The black-and-white images appear to come from standard 16 mm B & W newsreel footage, taken by a stocky man wearing a hat who had approached the Presidential limousine as it was parked outside the Parkland Hospital emergency room (and before the bubble top was installed). The point of view (POV) of the camera was that of someone sitting in the limousine, or rather standing just beside it and to the right side. The camera is pointed at the inside surface of the windshield from behind — that is the POV. One man in a suit and tie can be seen standing on the front side, or forward of, the windshield, and two DPD motorcycle patrolmen (are they Ellis and Freeman?) can be seen leaning in and examining the windshield. What looks to me like a through-and-through bullet hole is visible in all 84 video frames, left of center on the windshield (adopting the POV of the camera) and approximately halfway down from the top, although these are only rough approximations. The location appears to be entirely consistent with that described by Charles Taylor and George Whitaker (above).

    I wish to make something very clear here: you cannot access the images I am describing above in the U-Tube segment in which this episode has been put up on the internet. First, the timing is different in the U-Tube segment (13:08, vice 14:02), because the U-Tube segment was copied from the broadcast. [The factory DVD location of the clip is at a later point in the program, at 14:02, because of advertising material inserted at the beginning of the DVD.] Second, the size of the U-Tube presentation is so small on one’s computer screen, and the resolution so poor in comparison with a big screen HD television, that you can forget seeing this windshield bullet hole on U-Tube. The viewer needs the factory-produced DVD; a good DVD player with functioning frame-by-frame advance; and a big screen, High Definition (1080p) TV. The bullet hole shows up clearly on my 52″ SONY Bravia television. So anyone concerned with doing research here simply must obtain the factory-produced DVD.

    Now, no doubt the “lone-nutter” crowd — both those who are in denial of the reality of an American coup in 1963 (because they can’t handle the truth), and the U.S. government’s third-party surrogates in the midst of the research community (whose job it is to cast doubt on all new research pointing to conspiracy and cover-up) — will react violently to this essay, and that is predictable. But you don’t have to listen to their opinions…EXAMINE THE EVIDENCE YOURSELF AND MAKE UP YOUR OWN MIND. Just obtain a factory-produced DVD of “The Smoking Guns,” by hook or crook (or E-Bay); put it in your DVD player; go to the specified time of 14:02 into the program; and then examine the 84 video frames, one at a time, on an HD big screen TV. You will find that video frames 1, 15, 31, 37, 47, 59, and 71 best depict the bullet hole. The 16 mm camera was hand-held, so there is some motion and some blurring of the images, and that is why some video frames are more clear than others. In my opinion, the best frames are #1 and # 71 in the windshield sequence.

    Then consider how dangerous this two-seconds of “B-roll” footage is to the U. S. government’s contrived position on the assassination as we approach the 50th anniversary of President Kennedy’s assassination: a through-and-through hole in the limousine windshield, made by a frontal shot traveling from front-to-back (as stated by George Whitaker and Evalea Glanges), all by itself, demolishes the lone-assassin myth still being perpetuated by the U.S. government and by its surrogates in the mainstream media in America. No wonder the establishment in America felt this episode had to be suppressed.

    And consider the other reasons for its suppression. This episode also features Dr. David Mantik, M.D., PhD., eloquently and clearly discussing his conclusion — based on his nine visits to the National Archives to view the autopsy materials — that the autopsy photographs of the rear of JFK’s head are photographic forgeries. It also features former USIA photographer Joe O’Donnell discussing how White House photographer Robert Knudsen showed him two sets of post mortem photos of JFK’s head wounds late in 1963: one set that consisted of authentic, pre-alteration images, showing the true entry and exit wounds in the head (an entry wound high in the right forehead, and a large exit wound in the right rear of the skull); and another set of images that was post-alteration, with the entry wound high in the forehead no longer visible, and the back of the head seemingly intact. It also features Dr. Gary Aguilar, M.D., discussing in convincing terms G. Robert Blakey’s suppression of the content of interviews the HSCA conducted with JFK autopsy witnesses, and Blakey’s intentional misrepresentation of the contents of those interviews in the HSCA’s report; the JFK Records Act resulted in the “premature release” of the suppressed autopsy witness interviews in 1993, and the “Big Lie” in the HSCA report was exposed. (The HSCA report, in volume 7, stated that all of the Dallas doctors had to be wrong about the exit wound they recalled in the back of JFK’s head, since all of the autopsy witnesses the HSCA had interviewed said the wounds they observed matched the autopsy photos which show the back of the head intact. The release of the interview reports in 1993 revealed that the HSCA had lied about what those witnesses had said.) All of this, and more, was presented in this one key episode.

    So ask your friends, go on E-Bay, and one way or another, get your hands on the banned episode of The Men Who Killed Kennedy titled “The Smoking Guns,” and see the bullet hole in the windshield yourself. Then compare it to the photographs of the windshield in the National Archives, and ask yourself what this sorry episode says about the integrity of our national government.

    President Kennedy was killed in Dealey Plaza by a crossfire, meted out by shooters firing from multiple directions, from both the front and behind — therefore, he was felled by a conspiracy, by definition. The windshield bullet hole evidence, all by itself, proves a conspiracy; and its clumsy and unsuccessful suppression, all by itself, is proof of a government cover-up of the facts in President Kennedy’s assassination, since the U.S. government controlled all of the windshield evidence. The facts contained in this tale prove that we had a coup in America in 1963, and that powerful and influential people were still covering it up in 1975, and 1976, and 1979, and in 2003. Former CIA Director William Colby once said that everyone of any significance in the U.S. media was owned by the CIA. I believe it — otherwise, this windshield nonsense would have been exposed long ago on a show like “60 Minutes.”

    I have expressed here my own strong opinion about what is shown in the 84 video frames visible in this documentary. A good follow-on step here would be to obtain the original 16 mm camera footage (presumably a black and white negative, not some multi-generational stock footage), perform a high-resolution digital scan of the film frames in Hollywood, and have them analyzed by motion picture professionals in the film industry who have no axe to grind — not by Gary Mack at the Sixth Floor Museum (who has never been to film school, or worked in the motion picture industry), or by any member of the JFK research community who has espoused a conspiracy or cover-up in the assassination. A true, third-party independent analysis of the camera negative, or of the earliest surviving generation of this newsreel footage, would be a good next step in the process of evaluating these images.

    I have sounded the alarm here — and I am not afraid of a truly independent third-party analysis. Let’s do a little honest science here, and “let the chips fall where they may.”

    *  *  *

    Douglas P. Horne graduated Cum Laude from Ohio State University in 1974, with a B.A. in History. He served for ten years as a Surface Warfare Officer in the U.S. Navy, and then worked for the Navy for ten more years as a Federal civilian. In 1995 he joined the staff of the President John F. Kennedy “Assassination Records Review Board,” and rose to the position of Chief Analyst for Military Records. In that capacity, he focused on the medical evidence surrounding the JFK autopsy; the Zapruder film; and ensured the release of military records on Cuba and Vietnam. In 2009 he published the extensive five-volume work, Inside the Assassination Records Review Board, which documents the U.S. government’s coverup of the medical evidence surrounding JFK’s assassination, and the alteration of the Zapruder film of President Kennedy’s assassination.

     

  • The World's New Reserve Currency? Everything You Need To Know About PetroYuan

    Earlier this week, we pointed out that the 'PetroYuan' is on the verge of becoming reality with Graticule's Adam Levinson noting that the birth of a yuan-denominated oil contract will be a “huge story” in the fourth quarter, and will be a “wake up call” for investors who haven’t paid attention to the plans.

    As a reminder, nothing lasts forever…

    Judging by the interest in the topic, investors are less informed than many believed and so the different teams within Société Générale Cross Asset Research examine what this contract would mean for the global oil markets and for the internationalisation of the yuan – if it gets off the ground.

     

    Part 1 The proposed yuan-denominated crude oil futures contract

    • Why is a yuan-denominated Chinese crude futures contract interesting to think about?  Why is it potentially significant?
    • Would yuan-denominated Chinese crude futures affect the physical markets?
    • Has China actually proposed changing its crude buying from USD to yuan?
    • What about the crude producers and exporters?
    • How much non-USD crude trade currently exists?
    • If small volumes don’t change how the oil market operates, how big would the volumes have to be to make a difference?
    • Is there another commodity that trades in multiple currencies at different exchanges that we can learn lessons from?

    Part 2 Another step towards currency internationalisation?

    • Why does China want to introduce a yuan-denominated crude oil futures contract? 
    • How can the yuan succeed in becoming a reserve currency?
    • What does the status of an international currency mean for the yuan?
    • What will an internationalised yuan mean to China’s FX reserves?

    *  *  *

    Part 1: The proposed yuan-denominated crude oil futures contract

    In November 2013, the Shanghai International Energy Exchange (INE) was established. Fully owned by the Shanghai Futures Exchange, the INE began efforts to offer an alternative crude oil futures contract to the global oil markets. After four years, these efforts are continuing. The proposed contract is for medium sour crude oil, is physically deliverable, and – most significantly – would be denominated in yuan.

    We begin with the oil markets.

    Why is a yuan-denominated Chinese crude futures contract interesting to think about? Why is it potentially significant?

    Such a contract would be a tool that would make it possible for crude exporters selling to Chinese refiners to hedge their sales in yuan. This could help any future effort by China to import crude using yuan; on the other side of the coin, it could also help any future effort by various crude exporters to sell crude in a currency other than USD. 

    In the abstract, the potential volumes are large, which is why this is worth thinking about.  China is the world’s biggest crude importer, with net imports in January-July 2017 of 8.4 Mb/d (and trending higher); the second biggest crude importer is the US, with net imports of 7.2 Mb/d in January-July 2017 (and trending lower). 

    To put this into context, according to the IEA, in 4Q17, global product demand will be 98.5 Mb/d and global crude demand will be 82.2 Mb/d (including refinery runs and direct burn).  Crude trade is much less, at 42.4 Mb/d in 2016, according to the BP Statistical Review; this excludes crude that is produced and consumed in the same country. In other words, Chinese net crude imports account for over 10% of the global crude market and almost 20% of global crude trade. 

    Would yuan-denominated Chinese crude futures affect the physical markets?

    No, not at all. That’s not what this is about – there would be no impact on physical supply (like the example of natural gas – see below). In theory, if this were to happen, it would purely be about pricing. The global oil markets are denominated almost entirely in USD, so it is interesting to think about that landscape changing.

    Has China actually proposed changing its crude buying from USD to yuan?

    No. In recent years, there has been occasional general talk from China of moving away from the USD for purchases of crude oil and other commodities; however, we are not aware of any serious or concrete proposal on the table to start buying crude in yuan any time soon. That said, it is worth acknowledging that most Chinese crude buying is done by three large stateowned oil companies. Therefore, if it so chooses, the Chinese government certainly has the ability to push such an agenda; similarly, the government has the ability to push the use of INE crude futures for hedging crude in yuan.

    What about the crude producers and exporters?

    This is an important question to ask because it’s not just about what the Chinese want. As with any commercial transaction, both the buyer and the seller need to agree. In the case of crude oil, they need to agree on the volume, price, type and quality of crude as well as the delivery date and delivery location, among other things. However, the currency is almost always the USD – that is not a point of negotiation.

    Over the years, including 2017, major crude producers such as Iran, Russia and Venezuela have talked about selling and exporting crude in non-dollar currencies. The reasons have been general geopolitical tensions with the US and Europe, and more specifically, oil-related sanctions; the use of non-dollar currencies may offer a way to circumvent oil-related sanctions, at least partially.  

    Hypothetically, if China were to have serious talks with Iran, Russia and Venezuela about importing crude and paying in yuan, that would be important because it would add another dimension to the geopolitical analysis. If sanctioned countries could simply side-step the measures by selling crude in yuan or other non-dollar currencies, it would mean that the risk of supply disruptions and potential upside risk for oil prices would be reduced.

    How much non-USD crude trade currently exists?

    It is very difficult to make an accurate and confident estimate. Again, depending on the political context, talk of non-dollar crude trade from the countries mentioned above comes and goes, and sometimes some deals are done more for political and public relations purposes than for anything else. 

    Our “guesstimate” is that such volumes probably amount to no more than 300-350 kb/d out of the 82.2 Mb/d global crude market noted above. For reference, to put that in terms of physical crude trade, 5 VLCC-size tankers each month carrying 2 Mb each would equal 333 kb/d. We would consider that, or its equivalent in smaller vessels, to be a generous estimate. We would consider 10 VLCCs or equivalent each month, or 666 kb/d, to be an extreme upside estimate but highly unlikely. This excludes barter arrangements and loans-for-crude deals. China lent Russia large sums of money after the global financial crisis in 2008-2009 in exchange for longterm crude supply deals; more recently, China had such an arrangement with Venezuela.

    The bottom line, in our view, is that actual crude trade paid in cash but not using USD has never amounted to more than a few token cargoes. Importantly, when this does happen, the entire transaction and negotiation of the price is done in USD as usual, with pricing done the normal way; for example, both Urals and Dubai, which are key marker crudes in their own right, are priced as differentials to Brent. The only difference when a non-USD currency is used is that a last step is added, where the amount for the invoice is converted from USD into a different currency.

    If small volumes don’t change how the oil market operates, how big would the volumes have to be to make a difference?

    The question is really: what is the tipping point? How much non-USD crude trade does there need to be for the entire negotiation to take place in yuan, or rubles, or euros?  In other words, what does it take for price discovery and price formation to take place not in USD but in another currency?

    The short answer is that we don’t know. But something on the order of 7-8 Mb/d of crude trade seems to be a sensitive level from a practical standpoint. How do we come up with this?  It’s simple: we are thinking about Saudi Arabia. Saudi crude exports have averaged 7 Mb/d through the first eight months of this year; in 2016, before the current OPEC cuts took effect, they averaged 7.6 Mb/d. The 7-8 Mb/d range works out to 16-19% of the 42.4 Mb/d global traded crude volumes.

    Our view is that physical efforts to shift global crude trade away from US dollars seem doomed to failure unless the Saudis fully participate. Usually in matters of pricing, the other Middle East exporters follow the lead of the Saudis, so there is a “double whammy” effect and the volumes could start to increase quickly.

    In this context, the warming relationship between Saudi Arabia and Russia becomes more interesting, too. Could the two countries cooperate on this in the same way they’ve cooperated on cutting production this year, in order to stabilise prices? Perhaps. That would add even more volumes because Russia is the second-biggest crude exporter in the world.  According to the BP Statistical Review, Russian crude exports averaged 5.5 Mb/d in 2016.

    However, the geopolitics of oil quickly gets complicated. Why would the Saudis want to do something (like encourage non-USD crude trade) that would benefit Iran? This is always true, but is even more true now at a time when US-Iran tensions are ramping up and the US is threatening to re-impose oil sanctions on Iran. Also, why would the Saudis want to do something that would diminish the value of their currency, which is pegged to the USD, their huge USD reserves, and other USD-denominated assets?

    If it would take the Saudis to make a real fundamental change in moving the oil markets away from a sole reliance on the USD to a multiple currency market, from a Saudi perspective, the arguments “against” are at least as strong as the arguments “in favour”. In short, we are sceptical of Saudi support for such a move.

    Rather than support from Saudi Arabia or a cooperative effort between Saudi Arabia and Russia, a more realistic and higher-probability scenario would be a move to non-USD crude exports led by Russia on its own or perhaps a cooperative effort between Russia and Iran – with China being the key crude buyer, using yuan, in all the scenarios. Without the inclusion of Saudi Arabia and other Middle East exporters such as the UAE, Kuwait and Iraq, the volumes involved with Russia and Iran would be much less; this would make a fundamental change in oil price formation away from USD slower and more difficult but not impossible.

    Is there another commodity that trades in multiple currencies at different exchanges that we can learn lessons from?

    The answer to this question is yes and the best example is natural gas. The point of making this comparison is that ultimately different denominated prices in the same underlying commodity do not affect the physical balances but do influence trade flows, arbitrage and market analysis.

    The US natural gas market is the largest regional market in the world (IEA estimates it alone represented 21% of total global gas demand) and is almost entirely priced in USD (AECO, Canada’s most liquid supply point, prices in CAD/GJ). The US LNG market (imports and exports) are also denominated in USD.

    The global LNG market is heavily indexed to USD as well, but that is due to the dominance of oil indexation in long-term LNG sales agreements; the USD dominance of the global LNG market thus reflects the dominance of USD in oil prices.

    In Europe (which represents 13% of total global gas demand according to IEA estimates), there are two main natural gas price points. In the UK, the National Balancing Point (NBP) – the hub of UK gas trading – is denominated in GB pounds and pence/therm. In the Netherlands, the hub of natural gas trading is known as Title Transfer Facility (TTF), and this contract is in euros and euro cents per MWh. Recently, there has been an observed shift in the dominance of these price points regionally; critically, this is a function of the physical characteristics of the market rather than the currency used or the exchange rate.

    Historically, NBP was the most liquid point and also the price structure included in European LNG sales contracts, making it the dominant global representation of the European market. Recently, however, TTF has seen an increase in liquidity (increased open interest) and has become increasingly reflective of the physical continental European market. Factors such as the higher carbon price in the UK, which has an impact on gas competitiveness/pricing within the regional power generation stack, the declining trend of the UK production profile, and the region’s increased dependence (seasonal switching) on the Interconnector pipeline between the UK and continental Europe have all contributed to the reduced ability of NBP to reflect the wider European market; hence the rise of TTF. Importantly, it is the changes in the physical market that have changed the competitive landscape among TTF and NBP, and it has little to nothing to do with the different exchange rates (although Brexit may have decreased NBP’s popularity).

    The existence of varying price structures in the global natural gas market is a critical comparison to make for oil, which has the potential to see a rise in pricing in currencies other than the USD. It is important to emphasise that even with multiple price structures, global natural gas trading behaviour is dominated by physical market conditions. At the same time, there is sometimes an influence from fluctuations in exchange rates, making analysis of flows, arbitrage, and trading somewhat more complicated; however, supply and demand dynamics are not fundamentally affected.

    Part 2: Another step towards currency internationalisation? 

    Why does China want to introduce a yuan-denominated crude oil futures contract? 

    The Chinese government wants the yuan to become an international currency. This means that it wants the yuan to be used widely in international transactions (a settlement currency), to be adopted as a pricing currency for goods and services in global markets (an invoicing currency), and to be considered as a store of value by international investors (an investing currency). The goal of internationalisation also goes hand in hand with the profile objective for the yuan to obtain a reserve currency status since these two are highly correlated. While it is currently unclear (or too early to discern) whether China is aiming for the yuan to become the reserve currency – dethroning the dollar – Chinese policymakers are certainly eyeing the yuan as one of the major reserve currencies.

    China has been working much harder on this project since 2009. The process has moved at varying speeds depending on capital account pressures, domestic asset prices and growth considerations, but much progress has been made (see the timeline on the next page). A quarter of China’s exports and imports are settled in yuan, although most of them are still invoiced in other hard currencies.

    The proposed yuan-denominated crude oil futures contract to be listed on the Shanghai International Energy Exchange (INE), fully owned by the Shanghai Futures Exchange, is another step on the road to promote internationalisation and erode the USD hegemony in the global financial system. While over the years, there have been some relatively small volumes of oil traded in non-USD currencies, including the yuan (as discussed in the oil section above), the value of oil is still priced in dollars. One of the main impacts of the proposed new crude futures contract, and presumably one of the intentions behind the proposal, is that by providing a yuandenominated financial hedging tool for crude oil, this will likely help to promote the appeal of the yuan as a pricing currency in global oil trade.

    From the Chinese policymakers’ perspective, China should arguably have a bigger say in the pricing of commodities since it has become the biggest consumer of many of them. Also, the petro-dollar system seems to be a successful model to imitate: first, the yuan would be more widely accepted by natural resource exporters, and in turn, these exporters could invest their yuan revenues (as FX reserves) into yuan-denominated financial assets.

    How can the yuan succeed in becoming a reserve currency?

    To improve the yuan’s chances of becoming an international and reserve currency, the main areas of development would be strengthening the institutional framework, fully opening the capital account to foreign residents, allowing market forces to play a greater role and establishing and managing a policy framework that alleviates the risk of crisis over an extended period.

    China technically joined the reserve currency club when the IMF added it to the SDR basket in September 2016. The narrow definition of a reserve currency is for currencies used for international trade and willing to be held by other central banks as part of their reserves. On these narrow criteria, China has achieved what few currencies have been able to do.

    Realising “true” reserve status and supplanting or even meaningfully competing with the USD in the global financial system is a very high hurdle that will take time (maybe 10-20 years) and require further enhancements in various areas. A broader set of criterion (listed below) of a reserve currency highlights the enormous challenges that China faces:

    Medium of exchange. Entities outside China would need to widely adopt the RMB for transactional purposes (i.e. trade settlement). The yuan trade/investment settlement, the offshore yuan market and the Belt & Road Initiative (BRI) would need to be promoted. China is making steady strides in this area, with now 25% of China’s cross-border transactions settled by yuan. According to the SWIFT, however, the yuan share in international payments has not been able to advance and has hovered around 2% since late 2014.

     

    Store of value. Individuals, companies and central banks would need to have faith in the currency as able to preserve wealth. About 60 central banks now hold some RMB assets in their portfolios, but this amount only represented 1% of total global reserves at the end of 2016.

     

    Liquidity and market access. To become widely accepted, a currency would need to have high liquidity with foreigners having unencumbered access to local financial markets. China has created numerous schemes for global investors to access its equity and bond markets, but it is only a start, with foreign investors’ share in onshore capital markets at merely 2%. Further liberalising the capital account for foreign residents would be a necessary condition.

     

    Institutional framework. Ultimately, confidence in the legal, regulatory and policy framework would need to be paramount for foreigners to hold large quantities of the currency. The current (USD) and previous (GBP) dominant global reserve currencies already had these qualities before attaining their status.

    In many ways, China is working in reverse order – pushing internationalisation before the others condition are in place. Critically, policy priorities would need to be reoriented. It will be a challenge for China to meaningfully challenge the USD’s dominance, but it is not insurmountable over the next 10-20 years provided China takes steps in opening up (full capital account convertibility), giving up control of markets and strengthening and improving transparency in its legal, regulatory and policymaking framework.

    What does the status of an international currency mean for the yuan?

    Before the reserve currency status can support the yuan, the yuan may have to continuously prove itself as a stable currency to boost its status as a reserve currency. We think that the fundamental factors of economic growth, debt risk and interest rate differentials will continue to play dominant roles in the yuan’s FX trends over the medium term.  
    A quick check of the history of the four major currencies – the dollar, euro, yen and sterling – since the 2000s suggests a visible and positive correlation between a currency’s traded weighted performance and its share in global FX reserves. However, correlation does not necessarily mean causality, and the causality can go both ways.

    For instance, in the case of the yen and sterling, however, changes in their valuations look to have led their changing popularity among global reserve managers. The strength of the yen between 2009 and 2013 did not attract significantly more reserve inflows right away, probably because of the lacklustre economic development at the time. Sterling only started to gain a share in global reserves in 2003 despite its persistent strength since late 1990s.

    For the yuan, we observe that the pace of yuan internationalisation was faster during the phase of currency appreciation or stability and slower when the yuan depreciated. This came despite the continuous policy efforts.

    For the past seven years, USD/CNY has moved surprisingly closely with US-China yield differentials, and in the past three years the correlation of CNY to broad dollar moves has increased. Contrary to popular belief, the CNY shows few idiosyncratic tendencies and rather behaves in a similar manner to other EM/G10 currencies.

    No matter what happens, the correlation between the CNY and the USD could remain high. The simple fact is that the correlation across most currencies is high over the cycle given that many top-down macro factors tend to drive FX over the medium term. 

    The CNY may, however, play an increasing role in leading currency cycles, just as the USD does now. This would mean an increasing importance of Chinese data, monetary and fiscal policy in affecting global currency trends.

    What will an internationalised yuan mean to China’s FX reserves?

    The project of yuan internationalisation comprises currency liberalisation, capital account open-up and domestic capital market deepening. Liberalising the currency implies that the central bank will intervene less and less in the currency market, and a relatively stable level of FX reserves is therefore most consistent with the goal of making the yuan an international currency. 

    Indeed, Chinese policymakers have repeatedly expressed their commitment to making the yuan a more flexible currency, freer from direct currency interventions by the central bank. However, it is also a stated goal for the yuan to maintain relatively stability against a basket of China’s major trade partners’ currencies. These two goals are only compatible when there is no major depreciation (or appreciation) pressure on the yuan resulting from major outflow (or inflow) pressure. 

    China’s FX reserves can recover this year after the $1tn drop over the previous 2.5 years because the yuan has managed to stabilise against the dollar and a basket of currencies. The yuan’s stability should be a function of 1) dollar weakness, 2) capital controls and 3) China’s stable growth this year. These three factors will likely be the main drivers of the trend in China’s FX reserves over the next few years. While there remains much uncertainty around the dollar, it seems that Chinese policymakers have honed the skill of capital controls. This ought to reduce the risk of sharp declines in FX reserves going forward.

    In the meantime, we think the chance of China persistently increasing its FX reserves is also limited unless the weak dollar trend continues and accelerates. The relationship with the US is one factor, and domestically there will likely remain strong demand from Chinese households and corporates for investment diversification if China continues to rely on rapid debt growth and money creation to sustain its economic model (see Anatomy of China's outflows). As the developments in 2015 and 2016 proved, such capital outflow pressure could outweigh the support from a decent current account surplus for the yuan.

    What will the yuan’s internationalisation mean to global FX reserves?

    China’s share of global reserve portfolios should increase over time. Depending on whether it achieves true reserve currency status in the eyes of foreign participants, that share will be either low (5%), high (25%) or very high (25%+). 

    Emerging market central banks still need a significant amount of dollars to undertake intervention assuming their currency regimes are not fully flexible, and a precautionary stockpile is desired to manage balance of payments shocks. Against all EM currencies, except most notably the CEE euro bloc, the dollar is by far the most widely traded and liquid FX cross. Virtually all intervention is done in USD crosses, and one prerequisite for central banks to shift their anchor currency to the RMB would be CNY crosses that are tradable without underlying dollar transactions being required. For instance, while EUR/CNY is quoted and traded onshore through the CFETS, it requires dealers to facilitate the trade through two separate transactions (USD/CNY and EUR/USD). The sheer size of the Chinese economy, growing global financial linkages and increasing RMB trade settlement will see a shift in this direction over time, but it will be a very long and slow process. Products such as the proposed yuan-denominated crude oil futures contract will help to marginally speed up the progression. 

    Reserves can be divided into two broad categories: precautionary and excess. The precautionary portion needs to be in liquid assets to meet demand for foreign currency/dollars on short notice and mitigate balance of payments stress. Currently, these are mostly held in US government bonds or deposits, followed by European bonds, then UK, Japan, Canada and Australia down the list. China is below these. Gold is liquid but somewhat lower on the scale compared to deposits or government bonds, so there are natural limitations to how much central banks would hold. 

    The excess portion of reserves can be invested in anything, and central banks have an excess globally. Central banks have undertaken various diversification efforts over the past few decades, with the share of euros in global reserve portfolios for example having increased from 20% in 2002 to 27% in 2008 before falling back to 20% in 2016. Central banks have been more active in holding commodity currencies (CAD and AUD) over the past five years.  
    Russia has been buying a lot of gold. To do this, it either sells existing USD or other currency holdings, or when it intervenes and accumulates dollars it then diverts the currency to gold instead of treasuries. If central banks have excess reserves or do not want to accumulate more dollars, they could hold gold instead. 

    The proposed yuan-denominated crude oil futures contract reduces the need to use dollars for the transaction, but it does not change the outcome or address the fundamental question: do central banks want/need USD or yuan? They could have bought yuan previously. The proposed yuan-denominated crude oil futures contract does not make it an easier process. But for those countries subject to sanctions, it might be attractive. According to the 4Q16 IMF COFER report (link), foreign central banks held USD85bn in allocated reserves in the CNY (or 1% of global reserves). Total foreign holdings of Chinese bonds amounted to USD135bn, according to ChinaBond, suggesting the vast majority of holdings are from central banks.

    If reserve manager allocations to the RMB doubled over the next five years, and if those inflows were spread out evenly over the period, they would amount to roughly USD6bn per quarter (or another USD100bn). While not insignificant, that is still a drop in the ocean compared to other balance of payments components. However, if reserve manager allocations reached the weighting of the JPY in allocated global reserves (4%), the inflows could be closer to USD500bn over five years. An allocation equivalent to the euro (around 20% of global) reserves could see nearly USD1.5trn in inflows.

    It could be challenging for the CNY to reach a high weight if global reserves are not rising. In 2002-2008, when central banks were diversifying into euros, global FX reserves were rising sharply and a significant portion of the growth in reserves was due to China. During this period, central banks were buying dollars through intervention (in an attempt to keep their currencies weaker than otherwise) and with some of those newly acquired dollars they decided to diversify their holdings and buy euros. However, in the absence of a strong increase in global FX reserves going forward, it would present a significantly higher hurdle for reserve managers to diversify into the CNY. It would require active diversification out of other currency holdings (i.e. sell existing dollar assets) to acquire the CNY.

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Today’s News 27th October 2017

  • UK Retail Employment Plunges Most Since 2008 As Retail Sales Crash

    Yesterday we noted the surge in cable following the stronger-than-expected Q3 GDP print of 0.4% Q/Q, above the 0.3% estimate. Afterwards, the market was calculating an 87% chance that the BoE would hike next week. Brown Brothers commented that:

    The case against a hike is that inflation appears poised to peak shortly, the economy is softening, and real wages are falling. This may already be squeezing households, where an increase in the base rate is quickly passed through to households.

    However, two reports from the UK retail sector might encourage some nervous MPC members to stand pat.

    Bloomberg reports, U.K. retail sales are falling at the fastest pace since the depths of the recession in 2009 and worries about the housing market could exacerbate the weakness in consumer spending seen this year. The Confederation of British Industry said its measure of sales plunged to minus 36 in October – the lowest since March 2009 — from a positive 42 in September. Sales for the time of the year were slightly below the usual seasonal rates, it said.

    Rain Newton-Smith, CBI Chief Economist, blamed the weakness on higher inflation.

    “It’s clear retailers are beginning to really feel the pinch from higher inflation. While retail sales can be volatile from month to month, the steep drop in sales in October echoes other recent data pointing to a marked softening in consumer demand.”

    According to Bloomberg, faster inflation has put the squeeze on shoppers this year, and a separate report on Thursday suggests a cooling housing market could further dampen consumers’ enthusiasm for spending.

    YouGov and the Centre for Economics and Business Research said while their headline sentiment measure rose this month, confidence in the housing market weakened. For Bank of England policy makers, all this may play into their thinking as they prepare for a crucial meeting next week.

     

    While they’ve signalled that an interest-rate increase may be needed soon, a rate hike – even a small one – could also have an impact on spending habits, particularly for those concerned about the cost of their mortgage. Most U.K. property reports point to a property slowdown, with Halifax saying annual price growth has fallen to 4 percent from 10 percent in early 2016. According to Acadata and LSL, London house prices may be falling at their fastest pace since the financial crisis.

     

    “The downtick in the house value measures is a concern,” said Nina Skero, head of macroeconomics at the CEBR.

     

    “One’s perception of own home value has direct implications on their future willingness to spend.”

     

    The CBI survey points to continued pressure on households from the mix of stronger price increase and sluggish wage growth. Official data this month showed stores had their worst quarter in four years in the three months through September. The John Lewis Partnership, owner of a grocery and department store chain, has seen sales growth slow by more than half this year.

    The second report on the UK retail sector was from the British Retail Consortium which stated that retail employment dropped at the fastest rate since 2008.

    From The Independent, UK retailers cut jobs over the past three months at the fastest rate since comparable records began in 2008, due to technological change and rising employment costs, the British Retail Consortium said on Thursday.

    The BRC, which represents major retailers, said its members employed 3.0 per cent fewer staff in the third quarter of this year than during the same time in 2016, and total hours worked fell by 4.2 per cent year-on-year.

    Both were the steepest falls since the BRC started collecting records in 2008, when Britain was in the middle of its sharpest recession in decades. This contrasts with the picture in the broader economy, where the unemployment rate is its lowest since 1975 and job creation has been strong, albeit partly at the expense of wages. Still, the BRC report chimed with a European Commission survey last month that showed British retailers’ expectations for employment sank to their lowest since late 2011.

    “The pace of job reductions in the retail industry is gathering steam,” BRC chief executive Helen Dickinson said.

     

    “Behind this shrinking of the workforce is both a technological revolution in retail, which is reducing demand for labour, and government policy, which is driving up the cost of employment,” she added.

    Retail, which accounts for just under 10 per cent of jobs in Britain, has a lot of low-paid jobs that have been affected by rapid rises in the minimum wage in recent years, as well as a new government training levies and pension requirements.

    So while Corbyn and May continue to battle, and the central bank is threatening rate-hikes, the nation's core is collapsing. One wonders whether hard, soft, or no Brexit would make any difference now…

  • The EU Lectures Journalists About PC Reporting

    Authored by Bruce Bawer via The Gatestone Institute,

    • Nor, we are told, should we associate "terms such as 'Muslim' or 'Islam'… with particular acts," because to do that is to "stigmatize." What exactly does this mean? That when a man shouts "Allahu Akbar" after having gunned down, run over with a truck, or blown to bits dozens of innocent pedestrians or concertgoers, we are supposed to ignore that little detail?
    • But that is what this document is all about: advising reporters just how to misrepresent reality in EU-approved fashion.
    • It is interesting to note that while many people fulminate over President Trump's complaints about "fake news," they are silent when an instrument of the EU superstate presumes to tell the media exactly what kind of language should and should not be used when reporting on the most important issue of the day.

    "Respect Words: Ethical Journalism Against Hate Speech" is a collaborative project that has been undertaken by media organizations in eight European countries – Austria, Germany, Greece, Hungary, Ireland, Italy, Slovenia, and Spain. Supported by the Rights and Citizenship Programme of the European Union, it seeks, according to its website, to help journalists, in this era of growing "Islamophobia," to "rethink" the way they address "issues related to migratory processes, ethnic and religious minorities." It sounds benign enough: "rethink." But do not kid yourself: when these EU-funded activists call for "rethinking," what they are really doing is endorsing self-censorship.

    In September, "Respect Words" issued a 39-page document entitled Reporting on Migration & Minorities: Approach and Guidelines. Media outlets, it instructs, "should not give time or space to extremist views simply for the sake of 'showing the other side.'" But which views count as "extremist"? The report does not say – not explicitly, anyway. "Sensationalist or overly simplistic reporting on migration," we read, "can enflame existing societal prejudices" and thus "endanger migrants' safety." Again, what counts as "sensationalist" or "overly simplistic"? That is not spelled out, either. Nor, we are told, should we associate "terms such as 'Muslim' or 'Islam'… with particular acts," because to do that is to "stigmatize." What exactly does this mean? That when a man shouts "Allahu Akbar" after having gunned down, run over with a truck, or blown to bits dozens of innocent pedestrians or concertgoers, we are supposed to ignore that little detail?

    Or perhaps we should entirely avoid covering such actions? After all, the document exhorts us not to write too much about "sensationalist incidents involving migrants," as "[v]iolent individuals are found within every large group of people." If, however, we do feel compelled to cover such incidents, we must never cease to recall that the "root causes" of these incidents "often have nothing to do with a person's ethnicity or religious affiliation." What, then, are those root causes? The report advises us that they include "colonialism, racism, [and] general social inequality." Do not forget, as well, that there is "no structural connection between migration and terrorism."

    When the EU-funded activists behind the document "Reporting on Migration & Minorities" call for "rethinking," what they are really doing is endorsing self-censorship.

    At least the report's authors do not have the audacity to maintain that there is no connection between Islam and terrorism. But they do urge us to remember that Islam is "diverse." The notion that it is inherently violent is — what else? — a "stereotype." So is depicting Islam as "grounded in a different reality and lacking common value with other cultures" or portraying Muslim immigrants as being "fundamentally different from the citizens of the host country." And it is just plain wrong, needless to say, to encourage "the widespread perception that there is a 'cultural clash' between Islam and the West with religion at the heart of the 'problem.'" (On the contrary: Islam is, the report tells us, "a belief system that can exist alongside others.") And do not dare to suggest that Islamic culture is in any way "inferior to Western culture." Or that Muslim men are "highly patriarchal." (Repeat after me: "Many societies around the world remain highly patriarchal, independent of religion.") And do not pay too much attention to Muslim women's "clothing styles." Why? Because doing so tends to "homogenise" them. (Banish from your mind the thought that it is the clothing itself that homogenizes them.)

    During the last couple of years, many countries in Europe have experienced a veritable tsunami of Islamic migration. But responsible journalists, according to "Respect Words," must never, ever put it that way: "When describing migration, don't use "phrases such as 'tide,' 'wave' and 'flood'" (or, the authors later add, "horde" or "influx") because such language can "evoke the sense of a 'mass invasion.'" It "dehumanises migrants," you see, and "constructs a false sense among the audience of being 'under siege' by an 'enemy' that must be repelled." Of course, much of Europe is "under siege"; this fact is becoming clearer by the day; to use milder terms when discussing this topic is to do nothing less than misrepresent reality. But that is what this document is all about: advising reporters just how to misrepresent reality in EU-approved fashion.

    "Inform your audience," the report urges journalists, "about the reasons why people feel compelled to leave their homelands, and investigate what connections there may be to policies and practices of European states." Possibly, however, a massive percentage of the Muslims pouring into certain European states are doing so because of those states' "policies and practices" — namely, their readiness to start handing immigrant families large sums of cash the minute they arrive, to set them up with free housing, furnishings, etc., and to allow them to stay on the dole for the rest of their lives. Many of those countries are more generous to Muslim newcomers than they are to their own citizens who have fallen on hard times; immigrants often go to the front of the line, while elderly citizens of some of these countries – people who have worked hard and paid into the welfare system since the world was young – have been turned out of their homes in order to accommodate newly-arrived Muslim families.

    But these obviously are not the "policies and practices" to which the "Respect Words" document is referring. Quite the opposite. The transparent implication here is that Muslim refugees and asylum seekers are fleeing conditions for which they and others in their countries of origin hold no responsibility whatsoever and that can, in fact, ultimately be traced back to Western wrongdoing, whether in the last generation or centuries ago. Never mind that Muslims took over Persia, the Byzantine Empire, all of North Africa and the Middle East, Greece, Northern Cyprus, much of Eastern Europe, and Southern Spain. Ultimately, everything that is wrong with the Muslim world is seemingly the fault of the West, so Europeans owe all incomers a new life — and perhaps even a new country — peaceably handed over to them so that they can import sharia law?

    No, the report does not quite go so far as to make this argument. But the report does caution that even to touch on the question of "whether asylum seekers' claims are genuine" or "whether migrants have a right to be in the country" is thoroughly inappropriate: it places the focus on "law and order" rather than on such things as "the fundamental right of asylum." Yes, you read that correctly: "the fundamental right of asylum." Never mind that under international law not everyone is entitled to asylum — and that a huge proportion of self-styled asylum seekers in Europe today have no legitimate grounds for such a claim but are, like many of us, seeking better economic opportunities.

    But such facts are inimical to the authors of the "Respect Words" document. In their view, no human being can be "illegal"; therefore, the word "illegal," they admonish, should be used to describe actions, not people.

    The only surprising thing about this document is that it actually includes a brief section on anti-Semitism, in which it suggests — believe it or not — that equating Israel and Nazi Germany may not be a good idea. For the most part, however, the report is one long taxpayer-funded catalog of politically correct protocols which — if adhered to by everyone in Europe who is professionally involved in reporting on events concerning Islam and immigration — would guarantee a full-scale whitewash of the alarming developments currently underway on this unfortunate continent. It is interesting to note that while many people fulminate over President Trump's complaints about "fake news," they are silent when an instrument of the EU superstate presumes to tell the media exactly what kind of language should and should not be used when reporting on the most important issue of the day.

  • Lies And Distractions Surrounding The Diminishing Petrodollar

    Authored by Brandon Smith via Alt-Market.com,

    There are a few important rules you have to follow if you want to join the consortium of mainstream economic con-men/analysts. Take special note if you plan on becoming one of these very "special" people:

    1) Never discuss the reality that government fiscal statistics are not the true picture of the health of the economy. Just present the stats at face value to the public and quickly move on.

     

    2) Almost always focus on false positives. Give the masses a delusional sense of recovery by pointing desperately at the few indicators that paint a rosier picture.  Always mention a higher stock market as a symbol of an improving economy even though the stock market is irrelevant to the fundamentals of the economy. In fact, pretend the stock market is the ONLY thing that matters. Period.

     

    3) Never talk about falling demand. Avoid mention of this at all costs. Instead, bring up "rising supply" and pretend as if demand is not a factor even worth considering.

     

    4) Call any article that discusses the numerous and substantial negatives in the economy "doom porn." Ask "where is the collapse?" a lot, when the collapse in fundamentals is right in front of your face.

     

    5)  Avoid debate on the health of the economy when you can, but if cornered, misrepresent the data whenever possible. Muddle the discussion with minutia and circular logic.

     

    6) When a crash occurs, act like you had been the one warning about the danger all along. For good measure, make sure alternative economic analysts do not get credit for correct examinations of the fiscal system.

     

    7) Argue that there was nothing special about their warnings and predictions and that "everyone else saw it coming too;" otherwise you might be out of a job.

    Now, if you follow these rules most of the time, or religiously, then you have a good shot at becoming the next Paul Krugman or one of the many hucksters at Forbes, Bloomberg or Reuters. A cushy job and comfortable salary await you. Good luck and Godspeed!

    However, say you are one of those weird people cursed with a conscience; becoming a vapid mouthpiece for the establishment may not sound very appealing. Or, maybe you just have OCD and you can't stand the idea of "creative math" when it comes to economic data. Whatever the case may be, you want to outline the deeper facts of the economy because the economy is life — it is the structure which holds together our civilization, and if we lie about it in the short term, then we only set ourselves up for catastrophe in the long run. Welcome to another dimension. Welcome to the world of alternative economics.

    Every aspect of the U.S. economy or the global economy can be presented two very different ways depending on whether you "interpret" the data to fit a preconceived conclusion, or simply relay it to the public as it really is.

    Let's use oil and the petrodollar as an example…

    To illustrate the mainstream establishment reaction to legitimate economic concerns on oil, I highly suggest going back and reading an article by Foreign Policy, the official magazine of the Council On Foreign Relations, titled "Debunking The Dumping-The-Dollar Conspiracy," published in 2009. The idiocy of this article was truly bewildering at the time it was released, but even more so now in retrospect.

    First, it is important to note that Foreign Policy refused to even acknowledge the issue of the dollar losing petro-currency status until Robert Fisk of The Independent, someone closer to mainstream exposure, dared to broach the topic, warning that a trend was in play to dump the dollar as the petro-currency by 2018. The alternative economic community had been warning about the world moving away from U.S. oil dominance for some time beforehand.

    Second, the CFR uses a typical circular fallacy when confronting the potential end of the dollar's world reserve status; the fallacy that the dollar is the world reserve currency because "the U.S. is the preeminent world economic power." Actually, the reverse is true — the U.S. is the world's preeminent economic power only because the dollar has world reserve status. It was also once an industrial powerhouse after WWII, but this was ONLY because the U.S. was one of the few manufacturing hubs in the world that wasn't demolished by years of kinetic destruction. When you are the only game in town, of course you reap huge economic benefits including massive international investment, but not forever.

    Today, obviously, the U.S. is far surpassed by other nations in the area of manufacturing and production, and has also been surpassed as the largest global importer and exporter. The "preeminence" argument is unmitigated garbage.

    Third, almost every danger Foreign Policy dismissed as "conspiracy" back in 2009 is now coming true. Just as Robert Fisk warned, and just as the alternative economic community warned long before him, numerous shifts in the world of oil as well as geopolitical relationships have created a spiraling nexus of anti-dollar sentiment. Is it possible that the dollar will lose petro-status by 2018? Absolutely, and here is why…

    While the U.S. remains the world's largest oil consumer according to the Energy Information Administration (EIA), American consumption of petroleum products has greatly diminished over the past few years; falling demand by increasingly destitute U.S. consumers has left oil producers searching for buyers elsewhere. The World Economic Forum noted in 2015 the drastic fall in U.S. demand since the 2008 debt crisis, but this admission went largely unnoticed in the mainstream media. Interestingly, while demand was crashing, the price per barrel continued to skyrocket because of the Federal Reserve's inflationary QE policies. Almost immediately after the Fed began tapering QE, oil prices drastically declined in line with the lack of existing demand.

    In 2017, the EIA claims there has been a rise in global demand since the second quarter.  And has "projected" increasing demand including higher U.S. demand going into 2018, outpacing supply.

    Yet, at the same time the EIA admits a frustrating stagnation in global oil demand, with the U.S. being the primary drag on consumption since 2010.

    So, which trend are we supposed to believe? The one that is right in front of us, or the one that is optimistically projected? It is clear, even according to "official" statistics on crude oil imports, that the U.S. market began sinking in 2009 to levels not seen since the 1990's and has not recovered since. Everyone knows that each new year is supposed to bring exponential demand, like clockwork. But this has not been the case at all in the U.S.

    Meanwhile, China has recently surpassed the U.S. as the world's largest oil importer, even though the EIA lists the U.S. as the world's largest oil "consumer."

    The argument mainstream analysts would probably make here is that imports of oil are diminishing because U.S. shale oil is filling demand domestically. This argument overlooks the overall process of declining demand, though.  The US is the largest consumer of oil NOW, but will that pace continue?  According to the data, the answer is no.   Americans are buying less petroleum products since the 2008 credit crisis, regardless of where they come from, and oil producers are seeking to diversify into other markets, and other currencies.

    On top of that, even if it were true that imported oil is crumbling because US domestic oil is filling rising demand, this still begs the question – Why would oil producing nations stick with the dollar as the petrocurrency when the US has decided to take its ball and go home? 

    The US has now become a COMPETITOR in the oil market with shale, so why would OPEC nations and others also continue to give the US the enormous advantage of owning petrocurrency status?

    In the meantime, the geopolitical situation grows more unstable. I believe the Iranian sanctions issue has gone ignored far too long, and this has direct repercussions on the dollar's petro-status. How? Well, consider this — Europe continues its appetite for Iranian oil, with 40 percent of Iran's oil exports going to the EU. With the very oddly timed U.S.-led effort by the Trump administration to renew sanctions, Europe has been caught in a catch-22; either defy sanctions and upset relations with the U.S. or lose a significant source of petroleum imports. For now it appears that the EU will support sanctions, but this time solidarity on the issue is nowhere near as strong as it was back in 2012.

    With Iran as a major supplier for Europe as well as China, and overtaking Saudi Arabia as the top oil supplier for India, Trump's latest call to put economic pressure on the nation may add more fuel to the accelerating rationale against the dollar as the primary trade mechanism for oil. The question becomes, who benefits from American influence in oil, and who suffers? The more countries that suffer because of a world reserve dollar, the more likely they will be to look for an alternative.

    China has deepened ties to Russia for this exact reason. With Russia supplanting Saudi Arabia as China's largest petroleum source, and bilateral trade between Russia and China cutting out the dollar as world reserve, this is just the beginning of the shift.  In the past week it has been hinted that China will be shifting in the next two months into using its OWN currency, the Yuan, to price oil instead of using the dollar.

    Saudi Arabia, America's longtime partner in the oil dominance chain, is now moving away from the old relationship. Tensions between the Saudis and the U.S. State Department over the rather surreal Qatar embargo are just part of a series of divisions. With China's influence in the region increasing, the mainstream has finally begun to acknowledge that Saudi Arabia may be "compelled" to trade oil in currencies other than the dollar.

    Why is oil so important? Because energy, along with currency, is the key to understanding the state of the economy. When demand for energy goes stagnant, this usually means the economy is stagnant. When a nation has maintained a monopoly on global energy trade by coupling its currency to oil, an addiction can be formed and its financial structure becomes dependent in that addiction being continuously satiated.

    Foreign Policy argued in 2009 that oil trade in dollars is "nothing more than a convention." I would actually agree with that in part; it is indeed a convention that can change dramatically at any given moment. But, Foreign Policy asserts that there would be no consequences for the U.S. if and when the change takes place and the dollar loses petrostatus. This is absurd. Trillions in dollars are held overseas and the singular function of those dollars is to fulfill international trade based on the "convention" of the dollar's world reserve status. What purpose do those dollar's serve if world reserve status is abandoned? The answer is none.

    All of those dollars would come flooding back into the U.S. through various channels. Market psychology would immediately trigger a massive loss in the dollar's international value, not to mention incredible inflation would be spiking here at home. This process has already begun, and it is looking more and more like the next couple of years will bring a vast "reset" (as the IMF likes to call it) in the hegemony of certain currencies.

    Some people believe this will be a wellspring, a change for the better. They think the death of the dollar will lead to "decentralization" of the global economy and a "multipolar world," but the situation is far more complex than it seems. I will go into greater detail in my next article as to why the dollar and the U.S. economy in general has actually been slated for deliberate demolition and how this will likely come about.

    As far as oil and petro-status are concerned, the mainstream media is perfectly willing to report on the developments I have mentioned here in a fleeting manner, but at the same time they are completely unwilling to account for the effects that will result or the deeper meaning behind these events.  They will report on the smaller stories, but refuse to acknowledge the bigger story. It is quite a contradiction, but a contradiction with a purpose.

  • Goldman Sachs Maintains The Most Tax Havens Of Any US Company… By Far

    Multinational companies based in the United States are able to avoid paying an estimated $100 billion in federal income tax every year through the use of tax havens.

    As Statista's Niall McCarthy notes, a recent report from the Institute on Taxation and Economic Policy has found that 366 of America's largest 500 companies maintain 9,755 tax haven subsidiaries holding over $2.6 trillion in accumulated profits.

    Infographic: Which Companies Have The Most Tax Havens?  | Statista

    You will find more statistics at Statista

    Despite only having three tax haven subsidiaries in Ireland, Apple stashes the most cash off shore by far, some $246 billion which helps the company avoid $76.7 billion in U.S. taxes.

    The Goldman Sachs Group maintains the most tax havens of any large U.S. company by far with 905 in total. That includes 511 in the 511 in the Cayman Islands (though the company does not have an office there), 183 in Luxembourg, 52 in Ireland and 41 in Mauritius.

    Morgan Stanley is in second place with 619 tax haven subsidiaries while ThermoFisher Scientific rounds off the top three with 199.

    Even though small island nations like Bermuda and the Cayman Islands are notorious for tax avoidance schemes, the Netherlands is actually the country most frequently used as a tax haven by American companies.

  • DoD Plans Solar-Storm-Based National Blackout Drill During Antifa Protests In November

    Via StockBoardAsset.com,

    According to The National Association for Amateur Radio (ARRL), elements of the US Department of Defense (DOD) will simulate a  “communications interoperability” training exercise across the United States on November 04-06. The announcement released on October 24 has not been widely distributed to the media, because the drill is simulating a total grid collapse and could spark public fear.

    Explained by Army MARS Program Manager Paul English,

    “This exercise will begin with a national massive coronal mass ejection event which will impact the national power grid as well as all forms of traditional communication, including landline telephone, cellphone, satellite, and Internet connectivity,”

    In July, we warned about the US government quietly preparing for a massive coronal mass ejection with the passage of an Executive Order – “Coordinating Efforts to Prepare the Nation for Space Weather Events”.

    Here is snippet of section 1 of the executive order:   

    Space weather events, in the form of solar flares, solar energetic particles, and geomagnetic disturbances, occur regularly, some with measurable effects on critical infrastructure systems and technologies, such as the Global Positioning System (GPS), satellite operations and communication, aviation, and the electrical power grid. Extreme space weather events — those that could significantly degrade critical infrastructure — could disable large portions of the electrical power grid, resulting in cascading failures that would affect key services such as water supply, healthcare, and transportation. Space weather has the potential to simultaneously affect and disrupt health and safety across entire continents. Successfully preparing for space weather events is an all-of-nation endeavor that requires partnerships across governments, emergency managers, academia, the media, the insurance industry, non-profits, and the private sector.

    Back in April 2017, we wrote an article titled ‘Yesterday’s Broad Power Outage Likely Caused By Geomagnetic Storm‘. While everyone thought terrorism was to blame, we correctly pointed out that large power failures in major US cities was due to an intense geomagnetic storm registering 8-10 on K-Planetary Index.

    Earthsky.org provides an easy understanding of what is a cornoal mass ejection…

    A CME can launch a billion tons of plasma from the sun’s surface into space, at speeds of over a million miles per hour. Every so often, the sun burps.  But, unlike myself, when the sun burps, it does so with the power of 20 million nuclear bombs.  These hiccups are known as coronal mass ejections (CMEs)—powerful eruptions near the surface of the sun driven by kinks in the solar magnetic field.  The resulting shocks ripple through the solar system and can interrupt satellites and power grids on Earth.

     Back to the exercise on November 04-06,  the US Department of Defense headquarters entity will work with the US Army and US Air-Force MARS organizations and the Amateur Radio community to request status reports for 3,143 US counties. During the exercise, communication frequencies will use HF NVIS, VHF, UHF, and non-internet linked Amateur Radio repeaters.

    In addition, Army MARS Program Manager Paul English said,

    We want to continue building on the outstanding cooperative working relationship with the ARRL and the Amateur Radio community,” English said. “We want to expand the use of the 60-meter interop channels between the military and amateur community for emergency communications, and we hope the Amateur Radio community will give us some good feedback on the use of both the 5-MHz interop and the new 13-MHz broadcast channels as a means of information dissemination during a very bad day scenario. 

    Full Report from The National Association for Amateur Radio (ARRL):

    Bizarrely enough, this was first reported by Rob Dew of InfoWars, the US Department of Defense (DOD) training exercise will occur on ANTIFA’s day of rage across the United States.

    On refusefascism.org, a post titled: November 4 It Begins: The Trump/Pence Regime Must Go! has more than 33,000 shares on Facebook…. The post explains what the group’s intentions are during the day of rage.

    The bottom line: The United States government is quietly preparing for a major space-weather event to paralyze communication systems and energy grids across the entire country. As a citizen, you’re not allowed to know this knowledge and frankly you will not be prepared—only the government will be. The writing is on the wall of what is coming through an executive order and DOD drills.

    No wonder public trust with government is at historic lows, because you’re not allowed to know the truth.

    Simultaneously, the wealthiest families who own mega corporations in the United States are plowing millions into their proxy armies called community organizing groups. Let’s just hope, a coronal mass ejection doesn’t occur when these severely misguided folks are protesting.

    *  *  *

    Here is the curve ball: Is the United States really preparing for a North Korean EMP attack?

     

     

  • 1,000,000,000,000 – Japanese Foreign Assets Top One Quadrillion For First Time

    "…a quadrillion here, a quadrillion there… and pretty soon you're talking real money!"

    For the first time in history, foreign assets held by Japanese institutional and individual investors appear to have topped 1,000 trillion yen ($8.79 trillion), according to Nikkei estimates.

    The amount has increased roughly 50% during the past five years and now is more than twice as much as the country's gross domestic product.

    Japanese investors are in the midst of a major shift — pulling their cash out of domestic securities and placing it in overseas markets.

    Securities seem to have accounted for nearly half of the 1,000 trillion yen that has escaped overseas. Japanese investors were holding 453 trillion yen worth at the end of June, up 100 trillion yen or so over the past three years.

    By investment destination, nearly half of securities investments were directed to the U.S., while close to 30% went to Europe.

    They have been pushed to this collective decision by a hyper-aggressive Bank of Japan, which for more than four years now has been flooding the country's economy with so much yen that cash instruments can only earn negligible interest.

    And given Shinzo Abe's recent super-majority election win… do not expect this flood of liquidity – fungibly leaking out to the rest of the world's assets – to stop anytime soon!

    Just ask Kuroda…

  • From Shadow Wars To Overt War: The Pentagon's New 'Scramble For Africa'

    When news broke of the October 4 ambush and deaths of four elite Green Beret soldiers in Niger, the immediate reaction voiced among congressional leaders and echoed generally in the media was: we have troops in Niger? But the bigger questions of the US military's increasingly sizable footprint in Africa (or what has long been called our 'Shadow War') quickly disappeared from public debate, instead, in usual fashion the media quickly focused on myopic details of phone calls and whether Trump's handling of the aftermath was "presidential" enough. 

    Gone were the larger looming questions the average American might rightly ask: when did Congress authorize or oversee operations in Africa which would put "boots on the ground" in potential live combat zones? What is the ultimate purpose in our being in Africa? Were the tragic deaths, and subsequent sufferings of their families worth whatever nebulous mission they were tasked with? If this was about fighting ISIS in Africa, how did ISIS establish a presence in Africa to begin with? (hint: it could have something to do with US-driven regime change wars in Iraq, Libya, and Syria). 

    But as has been the case with all administrations going back to 9/11, the moment the White House and congressional leaders invoke those magical letters, AUMF (the 16-year old authorization for use of military force), the media quickly falls in line, in spite of the fact that the War Powers Resolution (WPR) was designed to prevent the president from unilaterally placing US troops in harm's way (though because it's Trump, and not Obama, even CNN will publish the occasional and rare anti-war op-ed).


    'Shadow Wars' become overt wars: Regime change begets terrorism begets more regime change ad absurdum. 

    Meanwhile on the "serious" network talk shows with "expert" panels, such inconvenient big picture questions are never dealt with, not even as the Pentagon absurdly offers the rationale of military expansion in Africa as key to a "global strategy" as ISIS is a "global threat" – or so we are told. AFRICOM (US Africa Command) defines its mission as to defeat “transnational threats in order to advance U.S. national interests and promote regional security, stability, and prosperity.” 

    So if we are now in the business of defeating all potential threats labelled "transnational" then of course a large-scale military presence can be justified just about anywhere, no questions asked (akin to Dick Cheney's notorious "one percent doctrine": if there was even “a one percent chance” that a threat was real “we have to treat it as a certainty in terms of our response.”) Indeed, at the very moment the Islamic State is in rapid retreat and is on the verge of collapsing in Iraq and Syria, the mantra is now once again (conveniently) ISIS! ISIS! EVERYWHERE! …And now especially on a whole new continent: Africa.

    The below map has been around for a while, but its creators assure us it was approved by "respected counter-terrorism experts"…


    Map source: The Daily Mail

    Senator Lindsey Graham, of course, loves such jingoistic talk. He told Meet the Press over the weekend that "he had no idea" there were 1000 troops in Niger, and it then took him less than a minute to invoke 9/11 and the AUMF (predictably) to say "the war [on terror] is going to places we haven't heard of before" – after which he literally described it as "endless". But for Graham and other hawks, however, this presents yet another opportunity for US military expansion, including ever-swelling defense budgets, and more "projection" of US power abroad. Though the US now has troops in 53 out of 54 countries, Graham was elated at the idea that the US military was fighting "radical Islamic extremism" in Niger and throughout Africa.

    Sen. Graham said further, "If you don't think it's a generational struggle, you don't understand the war. If you think it's limited to the Mid East, you don't understand the theology. It is spreading throughout the world," and added, "Particularly Africa." Of course, Graham – with his chicken-hawk non-existent war record understands neither war nor Africa: this is simply the classic Graham-McCain-neocon recipe for being everywhere, all the time.

    And keep in mind this was his reaction upon discovering there were troops in Niger in the first place after learning of the deaths of four young soldiers. Senator Rand Paul responded best when he said on Monday, "You know you are in too many wars in too many places when even warmonger Lindsay Graham can’t keep track anymore."

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

    But the big question ignored in mainstream media is this: Is the United States in the midst of a new military "scramble for Africa"?

    Below are astounding statistics and figures excerpted from veteran Pentagon and Africa researcher and journalist Nick Turse's new investigation into the Pentagon's presence in Africa titled appropriately, The war you've never heard of:

    • U.S. troops are now conducting 3,500 exercises, programs, and engagements per year, an average of nearly 10 missions per day, on the African continent, according to the U.S. military’s top commander for Africa, General Thomas Waldhauser.
    • Secretary of Defense James Mattis reportedly indicated to two senior members of the Senate Armed Services Committee Friday that these numbers are only likely to increase as the U.S. military shifts even greater attention to counterterrorism in Africa.
    • When U.S. Africa Command first became operational in 2008, it inherited 172 missions, activities, programs, and exercises from other combatant commands. Five years in, that number shot up to 546.
    • Today’s figure of 3,500 marks an astounding 1,900 percent increase since the command was activated less than a decade ago, and suggests a major expansion of U.S. military activities on the African continent.
    • These developments stand in stark contrast to early assurances that AFRICOM’s efforts would be focused on diplomacy and aid.

    *****

    • But despite a claimed "diplomacy and aid" presence, AFRICOM has launched 500 airstrikes in Libya in the last year alone, and U.S. forces have regularly carried out drone attacks and commando raids in Somalia.
    • In May, for example, a Navy SEAL was killed by al Shabaab militants in Somalia while “assisting partner forces,” according to AFRICOM. Earlier this month, four Special Forces soldiers were killed in an ambush while providing “advice and assistance” to local forces in Niger.
    • U.S. troop deaths or scandals are frequently the only mechanism by which Americans come to know about military deployments to African nations like Niger.
    • Every day, 5,000 to 6,000 U.S. personnel are deployed across the African continent.
    • These near-constant training exercises, missions, and activities with troops from Benin and Burkina Faso, Cameroon and Chad, Gabon and Guinea Bissau, not to mention Mali, Nigeria, Senegal, the Seychelles, Sierra Leone, Togo and Uganda, among other nations, remain largely unknown to most Americans.

    *****

    • The number of African troops trained by U.S. military personnel jumped 89 percent… from 22,825 trained in 2014 to at least 42,815 individuals a year later.
    • This month, Donald Yamamoto, the acting assistant secretary of state for African Affairs, told the House Foreign Affairs Committee that the Trump administration’s proposed $5.2 billion African aid budget would address “key priorities” such as “assist[ing] partner nations to defeat ISIS branches and affiliates and other terrorist organization threats and networks in Mali and the Sahel, Nigeria and the Lake Chad Basin, Somalia and the Horn of Africa, and elsewhere.”
    • Experts warn that further militarizing African countries which have "inadequate civilian control of the military” will result in absurdities such as… in 2012, for example, a U.S.-trained Army captain, Amadou Sanogo, overthrew Mali’s elected government. Two years later, Lt. Col. Isaac Zida, another U.S.-trained officer, seized power in Burkina Faso.

    *****

    • Six years ago, a deputy commanding general for U.S. Army Special Operations Command gave a conservative estimate of 116 missions being carried out at any one time by Navy SEALs, Army Green Berets, and other special operations forces across the globe.
    • Today, according to U.S. military documents… special operators are carrying out nearly 100 missions at any given time — in Africa alone. It’s the latest sign of the military’s quiet but ever-expanding presence on the continent, one that represents the most dramatic growth in the deployment of America’s elite troops to any region of the globe.
    • In 2006, just 1 percent of all U.S. commandos deployed overseas were in Africa. In 2010, it was 3 percent. By 2016, that number had jumped to more than 17 percent.

  • Postcard From A Brave New World Order

    Via Clarmond Wealth Limited,

    Dear Mustafa,

    I arrived in Karachi at 5.30am this morning on the direct PIA flight from Heathrow. The city of 26 million people had not yet woken up and I made it to the Sind Club in under 20 minutes. But as I write this now I can hear the horn-filled throb of city life on all four sides of the Club walls; this city pulsates with growth.

    If you click on the map I attach here you will see one of the main reasons – the Chinese Economic Corridors – otherwise know as ‘One Belt…One Road’. Pakistan lies directly on one of these routes, but look at this map carefully as it will change our world and world order, wherever we live.

    Lets look a some facts on ‘One Belt…One Road’:

    • It connects 65 countries and 4.4 billion people.
    • In 2016 Chinese companies signed 8,158 contracts in 61 countries worth $150b.
    • In 2016 China’s trade with the One Belt…One Road countries reached $953b.

    Over the next 10 years China will spend $2 trillion on ‘One Belt…One Road’ infrastructure, and, more amazingly, they are not asking the investee countries and corporates to pay it back; 80% of the money spent will be a perpetual bond, with only the interest needed to be paid. The principal is never returned.

    What is also very clear from the map is that China has no interest in controlling the seas. In fact they have taken a conscious decision to bypass the seas, to bypass the 7th, 8th and 9th US fleets that currently ring the Eurasian landmass. The US navy can sail the oceans to their heart’s content, the action is now on land. And to that end the first test train from China arrived directly in London in July this year; it took 20 days less than by sea. This is all pretty revolutionary stuff.

    China is attempting ‘the project of the century.’

    And as I am served a cool lemonade at the Club, a final remnant of the British empire, it is another empire – the American empire – that may be taking its last few sips of leadership.

    See you in London next week.

    Chris

  • Rental Insecurity: Survey Finds 1 In 5 American Renters Missed A Payment In Past 3 Months

    A new survey conducted by ApartmentList.com recently found that Americans, despite historically low unemployment levels and surging stock indices which would both seem to suggest that ‘everything is awesome’, are having a very difficult time making ends meet.  Per the survey, some 20% of renters admit they were unable to make their monthly payments on time at least once over the preceding three months with the results being even worse among minorities and those lacking a college degree.

    • Analyzing data from Apartment List users, we find that nearly one in five renters were unable to pay their rent in full for at least one of the past three months. We estimate that 3.7 million American renters have experienced an eviction.
    • Evictions disproportionately impact the most vulnerable members of our society. Renters without a college education are more than twice as likely to face eviction as those with a four-year degree.
    • Additionally, we find that black households face the highest rates of eviction, even when controlling for education and income. Perhaps most troublingly, households with children are twice as likely to face an eviction threat, regardless of marital status.
    • The impacts of eviction are severe and long-lasting. Evictions are a leading cause of homelessness, and research has tied eviction to poor health outcomes in both adults and children. These effects are persistent, and experiencing an eviction makes it difficult to get back on one’s feet.
    • Performing a metro-level analysis, we find that evictions are most common in metros hit hard by the foreclosure crisis and in those experiencing high rates of poverty. Perhaps counterintuitively, expensive coastal metros have comparatively low rates of eviction, in part because strong job markets with high median wages offset expensive rents in those areas.

    As ApartmentList notes, some 3.7 million Americans, of roughly 118 million total renters, have experienced an eviction at some point in their life.  Meanwhile, “rent insecurity” is even more prevalent with nearly 30% of folks making less than $30,000 per year saying they have difficultly making monthly rent payments.

    3.7 million Americans have experienced eviction, with rental insecurity affecting nearly one in five.

     

    Our Apartment List estimates show that 3.3 percent of renters have experienced an eviction at some point in the past, and 2.4 percent were evicted from their most recent residence. With an estimated 118 million renters in the U.S. today, we estimate that 3.7 million Americans have been affected by eviction at some point. If we assume that some share respondents fail to report informal evictions, this estimate is most likely understated.

     

    While experiencing eviction is a worst-case scenario with dire effects, a much larger share of renters still struggle with some form of rental insecurity. Our analysis shows that 18 percent of respondents had difficulty paying all or part of their rent within the past three months. The issue is particularly acute for low-income renters, 27.5 percent of whom were recently unable to pay their full rent.

    Renters with just a high school diploma are more than three times as likely to have faced an eviction threat in the past year than those with a Bachelor’s degree.

    Of those who did not attend college, 4.1 percent cited an eviction as the reason for their last move, compared to just 1.9 percent of those with at least some college education. This trend points to a broader issue of the housing market leaving behind less educated Americans. A recent Apartment List study showed that the gap in homeownership rates between high school and college graduates widened from 1.6 percent in 1980 to 14.9 percent in 2015.

     

    A similar trend holds when broken down by income. Of those earning less than $30,000 per year, 11 percent faced an eviction threat in the past year, and 3.4 percent were evicted from their previous residence. In contrast, for those earning more than $60,000 per year, these figures are 3.1 percent and 1.5 percent, respectively.

    Meanwhile, households with children were found to be twice as likely to face an eviction threat, regardless of marital status.

    Single parent households are at the highest risk, with 30.1 percent reporting difficulty paying rent within the past three months. However, married couples with children do not fare much better, with 27.2 percent struggling to pay rent. For those without children, the rates are 14.7 percent for single respondents and 13.3 percent of married respondents. Our findings are consistent with previous research showing that, among tenants who appear in eviction court, those with children are significantly more likely to be evicted.

     

    This result points to the fact the child care represents an essential but often overwhelming expense for many families, even those with both parents in the house. Analysis from Care.com shows that average daycare costs for toddlers range from $8,043 to $18,815 per year. Furthermore, one-third of families surveyed reported that childcare costs take up 20 percent or more of their household income.

    Not surprisingly, evictions were found to be most prevalent in metro areas where poverty rates are the highest.  

    Of the 50 largest metros in the nation, evictions are most prevalent in Memphis, with 6.1 percent of users reporting a prior eviction. Most of the metros with the highest eviction rates are located in the South and Midwest and include Atlanta, Indianapolis and Dallas. We find that the factors most strongly correlated with eviction rates include (1) the rate of foreclosures from 2007 to 2008, during the height of the foreclosure crisis, and (2) current poverty rates.

     

    Memphis, for example, has the highest share of its population living in poverty at 19.4 percent, and it also has the highest eviction rate. In metros with high poverty rates, many households may qualify for assistance through programs such as Section 8, but, unfortunately, only a small share of those eligible for such benefits actually receive them, leaving the majority of low-income households struggling to pay rent.

     

    Las Vegas had the second highest foreclosure rate from 2007 to 2008 at 9.2 percent and now has the sixth-highest eviction rate at 5.5 percent. This correlation suggests that many of the areas hit hardest by the foreclosure crisis have had a difficult time recovering. Despite lower housing costs, renters in these areas — some of whom are likely former owners who had their homes foreclosed upon — face a lack of opportunity that makes it difficult for them to pay their rent.

    Of course, with rental rates steadily climbing since the great recession, in spite of stagnant wages, it’s hardly surprising that Yellen’s “recovery” hasn’t helped all Americans equally.

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