• French Bond Investors Skeptical That Election Risk Is Over

  Bond investors are far from convinced that the risks surrounding the French election are over despite the broader market exuberance following the outcome of the first round.

  French 2Y yields have only corrected about half of the risk premium over German 2Y yields since the election (and in fact are widening out today)

  

   

  Furthermore, as Bloomberg details, open interest, a measure of the number of contracts outstanding, has dropped only 10 percent so far this week even as French government bond futures surged after the race for presidency narrowed to Emmanuel Macron and Marine Le Pen.

  

  A decline in open interest amid a rally in an asset typically suggests short-covering rather than new positions being added… but the modest size of the drop suggests few investors are relieved enough to pile back into 'still cheap' OATs.

  

  

• Will Your Savings Get Caught In Government Shutdown Crossfire?

  Via Birch Gold Group,

  Donald Trump and the GOP face a major hurdle as their first budget test looms next week, along with several problematic issues that could prevent an agreement and trigger a government shutdown.

  The potential shutdown would put a hiccup in federal bureaucracy for a few weeks, but that’s not the real reason Americans should be worried. Turns out, there may be an unseen economic danger that could affect you and your savings.

  Shutdown Dejavu?

  We’ve been down this road before, haven’t we?

  Back in 2013, federal legislators failed to reach an agreement on funding appropriation, and there were some serious consequences. This time the fallout could be just as bad, or even worse.

  The political mechanics of why are a little confusing, so let’s break it down piece-by-piece.

  There’s a sensitive relationship between the debt ceiling and the federal budget. Both require congressional approval, and big problems arise if either gets blocked.

  Here’s where things get complicated…

  In negotiations of the federal budget, the majority party (in this case, Republicans), can hold the debt ceiling “hostage,” so to speak as a way to influence the president — plus legislators from the opposing party.

  Republicans have to be careful not to overplay their hand, though. If they do, it could result in a shutdown, which nobody wants – each group for their own reasons.

  That said, why should Americans care? What are the risks? And why could this shutdown be worse than the last?

  Why the Stakes Are So High

  On March 15, the debt ceiling expired, and the Treasury (acting on behalf of the president) was forced to start using “extraordinary measures” to keep the U.S. from defaulting on its debt.

  If Congress doesn’t act briskly, we could see another credit downgrade or worse. And a government shutdown caused by budgetary squabbles would dramatically increase the chances of that happening.

  However, there’s one thing that makes this shutdown particularly special, not to mention uniquely risky.

  According to data from LPL Financial, analyzed and reported on by Ryan Vlastelica at MarketWatch, there have only been a handful of government shutdowns under one party’s control. But those few shutdowns have historically been the most economically damaging.

  Vlastelica writes (emphasis added):

  “A shutdown during a united government could underline the difficulty of major legislation getting passed, something investors are particularly attuned to right now. The rally that was sparked by Trump’s election started to unravel when a health-care reform bill was pulled because it didn’t have the votes to pass. The post-election rally largely occurred because investors viewed Trump’s economic agenda on taxes, infrastructure and regulation to be positive for growth. The prospect of those initiatives not coming to fruition has raised questions that the market’s robust move was unwarranted.”

  So not only could this potential shutdown put the U.S.’s creditworthiness at risk of taking another hit (and causing a repeat of all the negative economic consequences Americans were forced to suffer last time), but it could be a big downward trading signal for equities markets as well.

  But in the meantime, your savings could easily get caught in the crossfire while federal politicians duke it out.

  How to Keep Another Shutdown from Touching Your Wealth

  The last time there was a government shutdown, then-President Obama acted like a petulant child by shutting down national parks and even fencing off national monuments and posting armed guards to keep people out. This was intentionally designed to cause conflict so that Congress would raise the debt ceiling faster — illustrating how desperately the president needs Congress to act on it.

  This time the president is facing off against his own party, and throwing up roadblocks to the negotiation like border wall funding.

  Trump is calling Republicans’ bluff, most likely because the all-important 100-day mark of his presidency is quickly approaching. Fearing scorn from media and the public for compromising his plans, Trump is increasing the chances of another shutdown (and consequently another debt ceiling crisis) to avoid losing face.

  Obviously, it’s not the end of the world if certain non-essential functions of government don’t have money to operate for a week or two… so what’s there to worry about?

  Well, the biggest risk is another downgrade to the U.S. credit rating, which could crash both bonds and stocks…

  On top of that, a shutdown under single-party rule sends a message to market makers that Trump’s many proposed policies for the economy — the ones responsible for the rally in stocks we’ve seen over previous months — aren’t as likely to come true as previously hoped, which could send markets down even further.

  However, such a scenario would cause an equal and opposite reaction in another type of investment that Americans could take advantage of. Essentially, it would send investors flocking to safe haven investments like gold and silver, which would drive metal prices through the roof.

  This shutdown could send a huge ripple effect throughout the global economy, affecting financial markets across world. Securing your wealth yet with gold could be a crucial step toward ensuring your safety.

  

  

• Tiny Trump Hands Deliver Teeny Tiny Tax Plan, US Stocks Collapse in Despair

  The following article by David Haggith was published on The Great Recession Blog:

  

  The big announcement of the really, really big Trump Tax Plan with the “biggest tax cuts in history” came out bigly on Wednesday, as Trump promised. Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, Trump’s latest tax team, beamed proudly as they presented their baby. The stock market took a deep breath, then  looked at their brainchild and completely petered out.

  First, let me say, I clearly have nothing to recant from my earlier predictions about Trump’s tax plan. The plan that came out looks almost exactly as I thought it would — the only difference being that it is far more pathetic.

  Some news organizations, getting a little ahead of themselves, talked about the US stock market taking off because of the Trump tax plan when the market first got wind that the plan had been released and heard some of the key points:

   

  Once again, investors appear to be placing the bet that Good Donald Trump will be great for the market and that Bad Trump won’t be all that horrible. That was on display on Tuesday. The Dow Jones Industrial Average soared more than 230 points after it was reported that the White House’s tax plan, whose broad outlines will be announced on Wednesday, will propose cutting corporate tax rates to 15 percent, a Trump campaign pledge that many thought the president was backing away from. (Newsmax)

   

  Ah, but that was this afternoon, and now it is the evening after the market plunged as steeply as it soared (and twice as far) to finish the day with the Dow slightly down from its pre-tax open — a sign of a mercurial market that was, for an instant pleased, until it started to feel a little indigestion from consuming its dinner too quickly. At that point, it barfed up all its gains for the day and went to bed sour.

  What the White House billed in its release as “the biggest tax cut in history” rapidly turned into digestive gas. As I speculated earlier in the day, no real plan was released. Just gas. Once again the Trumpet blew his horn loudly (probably from his back side) as he released the big plan, and then his team turned out a summary statement, devoid of any details or calculations.

   

  Here is my own summary of the Greatly Trumped-up Tax Plan:

   

  • The plan will eliminate estate taxes, which only the wealthiest Americans now play, helping Trump and family considerably in the future, but most of you not one iota. (This is a cut 100% for the rich, but it makes things equitable.)
  • The White House compensates for this by saying some other tax breaks that help the rich will be eliminated so that the plan would largely help the middle class; only, as usual, it doesn’t specify what those “other” current tax breaks are that will be eliminated. (So, read that as, “Just trust us on this one.”)
  • The new, new New Trump Tax Plan contains no math to show how much of a deficit the new plan will create, but co-creator Cohn offers assurances that the tax cuts “will pay for themselves” through economic growth and that the president knows we have to “be good stewards.” (“Just trust us on that one.”)
  • The plan comes with Cohn’s personal assurance that the president “will get this done for the American people.” (I feel better knowing that assurance is still being offered as it was in past months. I do note, though, that missing their stated and revised schedules during those months now leaves them simply assuring us it will still get down, but without anymore undoable deadlines.)
  • Corporate taxes will fall from 36.9% to 15%. (That will include closely held businesses and limited partnerships, like legal firms, construction companies in the oil industry, and … real-estate companies, where business income largely passes through to the owners (sometimes the family) so the business does not pay the tax but the owner does when the money passes through. (In other words, the bulk of Trump’s income tax — and his children’s — will drop from 35% to 15%, except that the plan comes with a footnote that this will be done in such a way as to insure that wealthy Americans do not exploit the change. So, we’re good!)
  • The plan reduces the number of tax brackets to three simple levels (10, 25, and 35 percent), and states the tax rate of each bracket. (Unfortunately, it omits stating what income levels will apply to each bracket.)
  • The plan comes with a note that details will be hashed out with the House of Representatives and the Senate in coming weeks. (Maybe months? Like the Obamacare repeal details got hashed out … of existence?)
  • “We know this is difficult,” Cohn said. “We know what we’re asking for is a big bite.” (That’s a plus because with Obamacare, “who could have thought it would be this difficult?” At least, now they’ve learned it is difficult. They have learned something on the job, so we can feel good about having a smarter team.)
  • It does help some of the middle-class by doubling the standard deduction for married couples, and it maintains the allowance for charitable deductions, and it says it will allow tax relief for childcare expenses (though, again, without any details).
  • The plan promises to alienate anyone who lives in a state with high state income taxby making state income tax no longer deductible. (No help if you’re not in such a state, and a bite in the butt if you are; but the plan softens this news by noting that this effects higher income people the most — well, yeah, the ones unlike Romney and Trump who have been known to pay no state income tax.)
  • The plan simplifies tax code (albeit it doesn’t tell us how, just that it WILL). This will presumably happens when congress actually sits down to create the plan with laws under Trump’s instruction that the laws be more simple. (Trust us on that one, even though everything we’ve simplified so far has been ruled unconstitutional in a court of law or died in debate.)
  • Repatriated corporate profits will get a one-time major tax reduction, but all profits made overseas after that will be completely tax free for years to come! (That’s a glory-hallelujah! Well, except for the detail that the tax rate for repatriation is omitted. But, hey, at least they’re thinking about it! And they’re gonna do something! Those cuts will be the “biggest in history!” We just don’t get to know how big until they figure that out. Details.)
  • One thing that is NOT mentioned in the Trumped-up Tax Plan is capital gains tax. If the lack of mention means there will no longer be a special capital-gains tax rate, the elimination of that gift, which goes largely to rich stock and real-estate speculators who can pay to play in that realm, is something I will like. (But the plan doesn’t say one way or another, and you can be sure Republicans will insist on putting that objectionable trickle-down part in as details are “hashed out.”)

   

  Fine print: “details to be determined.”

   

  Wouldn’t you know it? The one part where the devil always rests is still cloaked under a sheet to be revealed at some vague later date.

  Written on all of one side of one page, the newly Trumped-up Tax Plan looks like a scheme worked out by a couple of guys in a paneled club room, smoking cigars over whisky on the rocks and deciding what sounds “great.” That’s clearly why the US stock market plunged once the cigar smoke cleared so investors could actually see the Trumped-up Tax Plan … and the napkin it was written on. How pathetic is that plan when it gives the “biggest tax cuts in history” all aimed at pumping up the stock market, and all its coming-out accomplishes is to cause the stock market to slump in disappointment? Talk about an anti-climax.

  I think Trump announced, “We’re going to present our tax plan on Wednesday,” and his two tax boys said, “Yikes, we better get the plan laid out. Let’s meet tonight after work for drinks and draw something up, and then we’ll give it one of our secretaries to make it look nice.”

  Where we got Trumped on this plan was in thinking a plan might actually be coming out today!

  Hah! Silly us! It’s more of a promissory note, really. I’ve seen footnotes larger than this plan. What we got today was, again, nothing more than just talk! Talk about what Team Trump WILL do … whenever it is that it finally does it. They’ve managed to finish a one-page outline. I think the market rose when it heard general statements about the plan, then plunged all the way to closing when it saw that it was written with lots of white space and NO detail on one page. What the market first thought were summary statements introducing the plan, actually are the plan. Great work for your first hundred days, Boys!

  Read my last article, “You Got Trumped! Trump tax plan taxing for the maestro of negotiation?” and you’ll see I sure called this one. If there is anything that has gotten to be predictable about Trump, it’s that he’s all talk all the time. He’s appropriately named after his loud and brassy mouth. Now, if he can just get his band of merry boys to orchestrate a tune. Trump promised the plan would be beautiful, and it is that; it’s written on a lovely piece of paper — very high quality like the menu at Mar-A-Lago — in an attractive font. It’s a thing of beauty. You should see it. Really, you should see it. I think it even has a picture of chocolate cake on it!

   

  Here is the actual plan if you want to read something truly pathetic after months of waiting:

   

  It’s so full of vague platitudes or catch phrases that it’s practically a tax cliché.

   

  Goals for Tax Reform

  ? Grow the economy and create millions of jobs

  ? Simplify our burdensome tax code

  ? Provide tax relief to American families—especially middle-income families

  ? Lower the business tax rate from one of the highest in the world to one of the lowest

  Individual Reform

  ? Tax relief for American families, especially middle-income families:

  • Reducing the 7 tax brackets to 3 tax brackets of 10%, 25% and 35%

  • Doubling the standard deduction

  • Providing tax relief for families with child and dependent care expenses

  ? Simplification:

  • Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers

  • Protect the home ownership and charitable gift tax deductions

  • Repeal the Alternative Minimum Tax

  • Repeal the death tax

  ? Repeal the 3.8% Obamacare tax that hits small businesses and investment income

  Business Reform

  ? 15% business tax rate

  ? Territorial tax system to level the playing field for American companies

  ? One-time tax on trillions of dollars held overseas

  ? Eliminate tax breaks for special interests

  Process

  Throughout the month of May, the Trump Administration will hold listening sessions with stakeholders to receive their input and will continue working with the House and Senate to develop the details of a plan that provides massive tax relief, creates jobs, and makes America more competitive—and can pass both chambers.”

   

   

  

  Trumped you!

   

  In other words, it is a plan to start creating a plan!

  And you thought I was just joking about how vague and utterly deplete of details this so-called plan is! After six months of poring over the details and laboring late into the nights, this fourth rendition of Trump’s plan is not that different from what he presented during the campaign, and it’s equal in depth of thought and detail to the kind of outline you come up with after a day of brainstorming and sorting out the the most-liked ideas.

  Now that Team Trump has done all the heavy lifting, it falls to congress to turn this masterplan into months of argument and volumes of law.

  I knew it was going to be pathetic; I didn’t know it was going to be deplorable.

  

• Paul Craig Roberts Warns "Trump Now A Captive Of The Deep State"

  Authored by Paul Craig Roberts,

  When the gullible and insouciant American public and the presstitutes who participate in the deceptions permitted the Deep State to get away with the fairy tale that a few Saudi Arabians under the direction of Osama bin Laden, but without the support of any government or intelligence agency, were able to outwit the entirety of the Western Alliance and Israel’s Mossad and deliver the greatest humiliation in history to “the world’s only superpower” by making the entirety of the US government dysfunctional on September 11, 2001, Washington learned that it could get away with anything, any illegal and treasonous act, any lie. The gullible Western populations would believe anything that they were told.

  Not only insouciant Americans, but much of the world accepts any statement out of Washington as the truth despite the evidence. If Washington said it, Washington’s vassals in Germany, France, UK, Canada, Australia, New Zealand, Netherlands, Belgium, and Japan assent to the obvious lie as if it were the obvious truth. So do the CIA purchased media of these vassal states, a collection of whores who prefer CIA subsidies to truth.

  When Obama inherited the Deep State’s agenda from George W. Bush, he set up Syria’s Assad for regime change by repeating for many months that if Assad used chemical weapons in the “civil war” that Washington had sent ISIS to conduct, Assad would have crossed the “Red Line” that Obama had drawn and would, as the consequence, face an invasion by the US military, just as Iraq had been invaded based on Washington’s lie about “weapons of mass destruction.”

  Having burnt this idea into the feeble minds of the Western populations, Obama then arranged for a chemical weapon to be exploded in Syria and blamed it on Assad. Thus, the Red Line had been crossed, the insouciant West was told, and America would now invade.

  The UK prime minister, the usual piece of Washington-owned garbage, rushed to the support of the American invasion, promising British support. But the British Parliament voted NO. The MPs said that the UK was not going to support another American war crime justified by obvious lies. Only in Britain does democracy still have any teeth, as we saw a second time with the Brexit vote. All the rest of the West lives in vassalage and slavery.

  The Russian government also took a firm stand, admitting that Russia stupidly trusted America in Libya, but no more. We, said the Russians, will ourselves remove any and all chemical weapons from Syria and turn them over to Western “civilization” to be destroyed, which the Russians did.

  What did Western “civilization” do with the weapons? They gave some of them to ISIS. This gave Washington a second chance to accuse Assad of using chemical weapons “against his own people.”

  And so Washington has rolled out this hoax a second time. During a Syrian air force attack on an ISIS position, a chemical weapon exploded, or so it is alleged. Instantly Washington said that Assad had used “Sarin gas against his own people.” Trump was shown photos of dead babies and stupidly ordered a US military strike against Syria.

  This was the first time that Washington had engaged in an unambigious war crime without any cover. Trump had no UN resolution, not even one that could be stood on its head as in Libya. Trump had no NATO participation, no George W. Bush “coalition of the willing” to give cover to the war crime with the support of other governments.

  There are no skirts for Trump to hide behind. He stupidly let himself be pushed into commiting an unambigious war crime.

  Now all his opponents—the Deep State, the military/security complex, the CIA, the Hillary Democrats, the warmonger Republicans—have the New White House Fool under their control. If Trump doesn’t do as they want, they will impeach him for his war crime.

  Meanwhile the risk of war with the Russian/Chinese/Iranian/Syrian alliance grows closer. The US shows every intention of provoking this war. Washington has imposed sanctions on 271 employees of Syria’s Scientific Studies and Research Center for, in Washington’s lying words, responsibility “for developing and producing non-conventional weapons and the means to deliver them.”

  In order to make this false charge stick, Washington prevented any investigation whatsoever into the facts of the alleged chemical weapon associated by Western propaganda, not by any known fact, with a Syrian air attack on ISIS. If Washington is so certain that Syria is responsible, why does Washington block an investigation? If Washington is right, an investigation would prove Washington’s case. But as Washington is again lying through its teeth, an investigation would prove the contrary. And that is what Washington fears and is the reason Washington blocked an investigation.

  Why do Western peoples believe the US government, a well proven liar, who blocks an investigation and asserts that everyone must believe Washington or else be put on a list of Russian agents?

  Here is the lie, the raw propaganda, that the US government has no qualms about issuing: https://www.treasury.gov/press-center/press-releases/Pages/sm0056.aspx It comes from the US Department of the Treasury in which I once served honorably. But honor no longer exists in the US Treasury.

  Are Western populations intelligent enough to understand that the only reason for Washington to block an investigation of the alleged use by Syria of a chemical weapon is that the facts clearly do not support Washington’s lie? No, they are not.

  Theodore Postol, a scientist at MIT, has concluded from his investigation that the chemical weapon was not dropped from the air but was set off on the ground and that it was not Sarin gas as Sarin lingers and the alleged aid workers who were immediately on the scene were unprotected by gloves or masks or by anything. If the gas were Sarin, they would be dead also.

  The Russian explanation is that the Syrian air force attack hit a storage facility, conveniently arranged by Washington, that contained chemical weapons. I have seen reports that Washington, or Washington’s vassals such as Saudi Arabia, have provided ISIS with chemical weapons. President Putin of Russia says the reason Washington has delivered chemical weapons to ISIS is that there can be more orchestrated instances of their use that can be blamed on Assad.

  I think I can say in complete confidence that this is what is happening: Washington intends to wear Russia down with orchestrated chemical attack after chemical attack, portraying Russia as an inhuman defender of Assad’s alleged chemical attacks, in order to more thoroughly isolate Russia and in order to provoke opposition to Putin’s government, especially among the US and German financed NGOs that Russia stupidly permits to operate in Russia and in the Russian media. Washington’s goal is to force by the weight of world opinion Putin to abandon Assad to Washington.

  US Secretary of State Tillerson, another gigantic disappointment to those who hoped for peaceful relations between the US and Russia/China/Iran/Syria, has said that the US still intends regime change in Syria. Tillerson has advised Russia to get out of Washington’s way and to “consider carefully their support for Bashar al-Assad.”

  Russia cannot abandon Assad, because if Syria falls to Washington, Iran will be next, and then the Washington-financed jihadists will be set upon the Muslim populations of the Russian Federation and China.

  This is Washington’s game plan. I am certain Putin is aware of it, and I think the Chinese are, despite their inordinate focus on making money.

  The questions before us could not be any clearer: Will Russia and China break and give in to Washington? If not, will Washington become a good world citizen for the first time in America’s history, or will Washington issue more threats, thereby convincing Russia and China that their alternative is to wait for Washington’s preemptive nuclear strike or deliver one themselves?

  This is the only question that the world faces that is worth our attention. I spent a quarter century in Washington. The evil that is in control there at the present time is unprecedented. I have never seen anything like it.

  Can the world survive the evil that is concentrated in Washington, evil that has the support of the governments of the Western world?

  

  

• Massive Explosion Reported Near Damascus International Airport In Syria

  In what is believed, but has not been confirmed, to be an Israeli air strike, moments ago the area around the Damascus International Airport in Syria was rocked by at least one massive explosion.

  Explosion around #Damascus airport now pic.twitter.com/ZNsZs0BY3L

  — Armies And Weapons (@ArmiesWeapons) April 27, 2017

  //platform.twitter.com/widgets.js

  Video showing the explosion in #syria #Damscus international airport pic.twitter.com/Y4R22MyT3Q

  — Armies And Weapons (@ArmiesWeapons) April 27, 2017

  //platform.twitter.com/widgets.js

  #BREAKING: Huge explosion reported near Damascus International Airport in Syria pic.twitter.com/FrND1p1WFd

  — People’s Daily,China (@PDChina) April 27, 2017

  //platform.twitter.com/widgets.js

  #Syria #Damascus Bunch of #Syrian Activist Saying a Huge Explosion from the countryside Shaked #Damascus. & No Info on what it was yet

  — Ivan Sidorenko (@IvanSidorenko1) April 27, 2017

  //platform.twitter.com/widgets.js

  #Syria #Damascus A #Syrian Reporter is now Saying the Sound of HUGE EXPLOSION came from Vicinity of Damascus International Airport. pic.twitter.com/K9iLZcmful

  — Ivan Sidorenko (@IvanSidorenko1) April 27, 2017

  //platform.twitter.com/widgets.js

  If confirmed, it would be the second Israeli attack on Syria in the past week: on Sunday, Israeli forces bombed a camp for pro-government forces killed three fighters near the Golan Heights on Sunday according to AFP. Two fighters were also wounded in the attack on the Al-Fawwar camp near Quneitra in southwestern Syria, adding that it was unclear whether the damage was inflicted by an air strike or shelling.

  Israel’s army declined to comment Sunday on the attack. On Friday the army said it targeted positions inside Syria in retaliation for mortar fire that hit the northern part of the Golan Heights.

  Syria’s official news agency SANA said Israel had struck a Syrian army position in the province of Quneitra on the Golan plateau, “causing damage”. The Syrian government labels rebel groups and jihadists fighting the regime as “terrorists” and accuses Israel of backing them.

  One thing is certain: the party behind today’s attack on Syria was not the US – otherwise CNN would be blasting it in real time – although with Russia having withdrawn half of its warplanes and with the Syrian army eager to avoid further airborne confronations, it is easy to imagine why the IDF can now enter the sovereign territory unopposed and without fear of reprisals.

  

  

• Visualizing Exter's Liquidity Pyramid (In Physical $100 Bills)

  All the money and all the assets in the world, shown in physical cash form, in one graphic.

  (click image for huge legible version)

  

  Source: Demonocracy

  The Liquidity Pyramid was created for visualizing the organization of asset classes in terms of risk and size. As Demonocracy explains, the Liquidity Pyramid was created during the time in United States, when each dollar was backed by Gold. Gold forms the small base of most reliable value, and asset classes on progressively higher levels are more risky. The larger size of asset classes at higher levels is representative of the higher total worldwide notional value of those assets. While Exter's original pyramid placed Third World debt at the top, today derivatives hold this dubious honor.

  As financial risk increases, money tends to move from the more risky assets (Derivatives), to the least risky assets (to physical cash and then gold). Nothing is without risk, but risk is relative.  The issue is that there is very little physical cash and even less Gold compared to the more risky assets, this makes for a crowded trade in times of high risk when everyone wants to jump into cash and gold, pushing up the price.

  The little yellow rectangle on the left front is all the gold in the world in physical form.

  

  Source: Demonocracy

  All the gold in the world is NOT all in "financial investment grade" form. World Trade Center, Empire State & bunch of too-big-to-fail Bank HQ buildings are in the background to help illustrate the size. You are eye-level to the WTC top floors. The $1 Quadrillion Derivatives cash wall fades into the distance, because $1 Quadrillion is an estimation by the best analysts and truth is no one really knows the true size of the Derivatives Market.

  

  

• Prepare To Be Put To Sleep By Draghi: Full ECB Preview

  With the ECB set to announce its latest monetary policy decision in less than 12 hours, one can summarize in one word what the market expects: nothing. Sure, there are some nuances – the central bank may wax philosophical about Europe’s better growth prospects, and maybe even set the stage for a small signal as early as June about an eventual reduction of stimulus, but don’t count on it. After all, there is a reason – or rather two – why markets are where they are today, and it has to do with central banks creating a record $1 trillion in new money out of thin air. The ECB has been responsible for half and Mario Draghi knows it.

  Which is why the former Goldmanite will to point to still-weak inflation, muted wage growth and an uncertain outlook to argue that easing off the accelerator now could unravel years of work that have consumed much of the ECB’s firepower, a Reuters poll showed. That won’t stop him however from acknowledging the euro zone’s “solid growth momentum”, surging consumer and business confidence, and receding political risk after the first round of France’s presidential vote put a pro-euro centrist in pole position. After all, Jean-Claude Trichet dud just that in 2011 when he, too, mistook a burst of exported Chinese inflation for “recovery.” We all know what happened after: first he hiked by 25 bps, and a few months later the Fed had to bail out Europe with unlimited swap lines.

  In any case, for those who need a more erudite assessment of why Draghi will say nothing at all of consequences tomorrow, here is BofA’s Gilles Moec who says that “we do not expect hard decisions or communication changes from the ECB this week” howver “policy debate may get fierce from June.” What happens then: “we expect very slow QE tapering in 2018 and no policy rate hike before well into next
  year, if at all.” As for the market, rates traders will focus on any mention of bond scarcity and exit sequencing.

  From Moec’s full note “No Need to Rush”:

  No need to rock the boat yet

  Given the recent focus on political developments, we think it is easy to forget the ECB’s Governing Council is due to meet on Thursday. Our sentiment is that there is a consensus at the Governing Council to leave the current stance and communication largely unchanged for now, even if we think this consensus does not extend on which decisions to make, when the time comes. This means that while we do not expect any hard decision or any significant communication surprise this week, we also believe the policy conversation could be quite fierce from June.

  We continue to think that in the face of a still subdued inflation outlook, prudence will prevail and the ECB will opt for small changes to forward guidance in June, slow tapering in 2018 and no policy rate hike before well into next year. Still, the hawks – and some centrists – at the ECB appear to be tired of extraordinary measures, meaning the market could price a more aggressive stance in the second half of this year.

  

  Peace in our (short) time

  In our opinion, most Governing Council members in March were not expecting their tiny move on forward guidance to trigger such an impressive market reaction. After engaging in concerted damage mitigation in the two weeks before the Easter break, we think they will be looking for some peace and quiet at the April meeting. We note in particular that even some hawkish hardliners, such as Governing Council Hansson, have recently stated that the ECB is “looking at the data,” which suggests that even this block of the Council is not after an immediate policy discussion. At the same time, Board member Coeure was keen to say the ECB was “very, very serious about forward guidance,” which did not sound like having another go at this essential part of their communication was on their wish list.

  We think there are several reasons behind this truce.

  • First, the data provides fodder for hawks, who will focus on strong surveys pointing to swift output gap reduction, and doves, who continue to worry about weak core inflation and hard data, which do not fully live up to the surveys’ promise.
  • Second, the March episode, with the market hastily pricing depo rate hikes, will remind Council members that moving market expectations is more art than science, with significant risks of overreaction.
  • Third, the political context–the ECB meets between the two rounds of the French presidential elections– goes against making big moves.

  Fire beneath the ice

  Still, the debate is going on underground. We think Benoit Coeure – who in his role of “market man” at the board is probably quite sensitive to the need to provide investors with sufficient visibility – is trying to gently move the communication toward a very slow “Exit strategy”. This week he stated that the balance of risks to growth is now neutral: the council statement kept it “tilted to the downside” last month. He has been very candid on the direction of travel for the ECB since December, e.g., in his speech at the end of last year about the need for governments to prepare for higher interest rates, so he is probably keen to prepare the market for a gradual removal of QE.

  Peter Praet–the chief economist, i.e., more focused on macro developments–for his part continues to insist on the weakness in inflation and last week stuck to the negative balance of risks.

  More profoundly–those are limited divergences we think–hawks are probably still ready to argue for a swift decommissioning of the ECB’s unconventional arsenal as soon as the political situation allows it.

  Baseline and risks

  In our baseline, the statement does not change this week. In June, the assessment of the balance of risks would move to neutral, while the most dovish part of the forward guidance–the notion that rates could fall further–would be removed (a cheap bone to throw to the hawks, in our opinion).

  Then in September the Council would start preparing the market to slow tapering in 2018 (eg, going first at EUR40bn for six months before gradually moving to zero by the end of 2018) while the forward guidance on rates would be more thoroughly changed; dropping the notion that there would be a long delay before the end of QE and the first hikes, while opening the door to some “technical tweaks” to the depo rate, which would not materialize before well into next year. In our baseline, the ECB would still be a net purchaser of securities at the end of 2018 (to be clear, would stop by December 2018).

  It seems to us the market tends to focus on a hawkish alternative to this, with fast tapering and quicker rates. We agree that is what the noises from the hawks and centrists suggest. But we also continue to believe core inflation will disappoint the ECB. That is what motivates our belief in a very, very slow and considered exit.

  

  

• US Consumers Tap Out: Credit Card Defaults Surge To 4 Year High And It's Getting Worse

  Two weeks ago, when JPMorgan launched Q1 earnings season, we noted that while the results were generally good, one red flag emerged: the company’s credit card charge offs rose to just shy of $1 billion, the highest in four years.

  

  It wasn’t just JPM: all other money-center banks reported similar trends, so we decided to look into it.

  What we found was not pretty. According to the latest data from the S&P/Experian Bankcard Default Index, as of March 2017, the default rate on US credit cards had jumped to 3.31%, an increase of 13% from a year ago, and the highest default rate since June 2013.

  

  This is how S&P/Experian explained the recent 5 consecutive month surge in bank card default rates:

  The bank card default rate recorded a 3.31% default rate, up nine basis points from February. Auto loan defaults came in at 1.00%, down five basis points from the previous month. The first mortgage default rate came in at 0.75%, up one basis point from February and reaching a one-year high.

   

  The National bank card default rate of 3.31% in March sets a 45-month high. When comparing the bank card default rate among the four census divisions, the bank card default rate in the South is considerably higher than the other three census divisions. Upon further analysis to the South’s three census regions, East South Central – comprised of Kentucky, Tennessee, Alabama, and Mississippi – has the highest bank card default rate. 

  

  “Currently the debt service ratio for consumer credit – the percentage of disposable income required to service consumer credit debt – is 5.58%, up from its recent low of 4.92% in 2012 but lower than the 6.01% peak seen shortly before the financial crisis.  The higher interest rates that most analysts expect over 2017-2018 are likely to combine with continued growth in consumer credit to push the debt service ratio back towards the 6% level,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices

  Making matters worse, based on the latest credit card data reported overnight from pure-plays Discover and CapitalOne, the deteriorating trends are rapidly accelerating (resulting in the stock of both DFS and COF getting slammed).

  

  

  Add to this what CoreLogic warned earlier in the day, namely that that stalwart of any viable business cycle, mortgage performance, has finally started to deteriorate…

  While loan performance improved across various loan types throughout the first five years of the expansion, over the last year three of the four major types of loans began experiencing a deterioration in loan performance. The exception to the deterioration in credit performance was real estate, which continues to improve. However, a closer look reveals performance is deteriorating, albeit from pristine levels of performance.

   

  … While performance for the 2016 vintage is still very good from relative to the last two decades, it is beginning to worsen. Historically, when the mortgage credit cycle begins to deteriorate it continues to do so until the economy bottoms and the credit cycle begins to improve again.

  … and it is becoming clear that the US consumer, responsible for 70% of US economic growth, has finally rolled over.

  

  

• Trump Tax Cuts To Add As Much As $7 Trillion In Debt

  While today’s “tremendously” vague one-page summary of Trump’s tax plan had barely any detail – it did not even include the income ranges for the three personal income tax brackets – it did contain enough information for the CRFB to be able to score it, and calculate how much it would cost, or in other words assuming little or no offsetting revenues, this is how much additional debt it would add to the existing upward trajectory in US national debt.

  While it is in a way amusing that after 8 years and $10 trilion in debt accumulated under the Obama administration, US sovereign debt suddenly matters, we admit that the CRFB’s findings are troubling. This is how the CRFB phrased it: “the White House released principles and a framework for tax reform today. We applaud the President’s focus on tax reform, but the plan includes far more detail on how the Administration would cut taxes than on how they would pay for those cuts. Based on what we know so far, the plan could cost $3 to $7 trillion over a decade– our base-case estimate is $5.5 trillion in revenue loss over a decade. Without adequate offsets, tax reform could drive up the federal debt, harming economic growth instead of boosting it.“

  The framework proposes a number of specific changes including: consolidating and reducing individual income tax rates to 10, 25, and 35 percent; doubling the standard deduction; cutting the business tax rate to 15 percent on both corporations and pass-through businesses; repealing the Alternative Minimum Tax (AMT) and estate tax; repealing the 3.8 percent investment surtax from the Affordable Care Act (“Obamacare”); moving to a territorial tax system; and imposing a one-time tax on money held overseas.

   

  The plan also includes some vaguer proposals, including “providing tax relief for families with child and dependent care expenses” and eliminating “targeted tax breaks that mainly benefit the wealthiest taxpayers.” Although the framework itself is vague on the latter, at their press conference Secretary of the Treasury Steven Mnuchin and National Economic Director Gary Cohn seemed to imply it meant repealing all individual deductions unrelated to savings, charitable giving, or mortgage interest (revenue would come mostly from repealing the state and local tax deduction).

  While the CRFB admits that even with the detailed portions of the plan, there are not enough parameters specified to provide a certain revenue estimate of the tax plan, the agency said that “making some assumptions based on prior proposals, our best rough estimate suggests the specified parts of the plan would cost $5.5 trillion. Assuming tax break limits only apply only to higher earners, that cost could be as high as $7 trillion; assuming credits and exclusions are eliminated as well as deductions, it would cost $3 trillion.“

  

  The conclusion: adding interest costs, a $5.5 trillion tax plan would be enough to increase debt to 111 percent of Gross Domestic Product (compared to 89 percent of GDP in CBO’s baseline) by 2027.

  That would be higher than any time in U.S. history, and no achievable amount of economic growth could finance it.

  Here we go back to our original cynical observation: suddenly, after years and years and trillions of new debt, the experts – especially those on the left – are suddenly so very concerned about it. That aside, at 77 percent of GDP, debt is currently higher than at any time in history outside of World War II and its aftermath. Even under current law, debt will rise to 89 percent of GDP by 2027. Based on the details of what has been put forward by the Trump Administration so far, debt could rise to 111 percent of GDP by 2027 – a new historical record. In dollar terms under this estimate, debt held by the public would total $31 trillion in 2027 and gross debt would total $36 trillion.

  

  Of course, one look at the chart above – assuming Trump does not come up with offsetting revenue measures, which so far he has not proposed – means that it has a snowball’s chance in hell of passing Congress. As Reuters more politely puts it, “Trump’s proposal may be unpalatable to party fiscal hawks. It lacks plans for raising new revenue and could potentially add billions of dollars to the federal deficit.”

  Finally, here are some analysts quoted by Reuters, on the opinion of the proposed plan.

  GREG MCBRIDE, CFA, BANKRATE.COM CHIEF FINANCIAL ANALYST, WEST PALM BEACH, FLORIDA:

  “In the eyes of financial markets, apparently all the concerns about North Korea, Syria, etc have been vanquished as the euphoria about tax reform has taken over. Wake me when something actually gets signed into law.”

  DAVID LEFKOWITZ, SENIOR EQUITY STRATEGIST AT UBS WEALTH MANAGEMENT AMERICAS IN NEW YORK:

  “A lot to digest on the tax side and to be honest we don’t have a lot of details at this point aside from just a few bullet points from the press conference. The key question really is what is doable from a budgetary and political perspective in Congress and this is going to be a bit of an uphill fight to get this plan enacted into law. But it is early innings, early days and the White House is going to have to try to convince a lot of people this is the right way to go.”

  MICHAEL PURVES, CHIEF GLOBAL STRATEGIST AT WEEDEN & CO, IN NEW YORK:

  “There’s no question that lower taxes means higher earnings and stronger balance sheets. From a market perspective its a positive. From an economic perspective for the country its much more complicated.
  “There’s a long way to go between now and a done deal. The fact the market has gone nowhere today is telling you something.

  JOE MANIMBO, SENIOR MARKET ANALYST AT WESTERN UNION BUSINESS SOLUTIONS IN WASHINGTON DC:

  “The lack of specificity with regard to the tax announcement offered little for dollar bulls to get excited about. If anything, it dimmed the spotlight on Europe and it put the focus back on ‘Trumponomics’ that could ultimately benefit the dollar. I think the market still has a bad taste in its mouth for how the healthcare reform went, so there’s a degree of skepticism in how soon we could see tax relief.”

  

  

Digest powered by RSS Digest

• Islam In The Heart Of England And France

  Authored by Denis MacEoin via The Gatestone Institute,

  • "There are plenty of private Muslim schools and madrasas in this city. They pretend that they all preach tolerance, love and peace, but that isn't true. Behind their walls, they force-feed us with repetitive verses of the Qur'an, about hate and intolerance." — Ali, an 18-year-old of French origin, whose father was radicalized.
  • "In England, they are free to speak. They speak only of prohibitions, they impose on one their rigid vision of Islam but, on the other hand, they listen to no-one, most of all those who disagree with them." — Yasmina, speaking of extremist Muslims in the UK.
  • "Birmingham is worse than Molenbeek" — the Brussels borough that The Guardian described as "becoming known as Europe's jihadi central." — French commentator, republishing an article by Rachida Samouri.

  The city of Birmingham in the West Midlands, the heart of England, the place where the Industrial Revolution began, the second city of the UK and the eighth-largest in Europe, today is Britain's most dangerous city. With a large and growing Muslim population, five of its electoral wards have the highest levels of radicalization and terrorism in the country.

  In February, French journalist Rachida Samouri published an article in the Parisian daily Le Figaro, in which she recounted her experiences during a visit there. In "Birmingham à l'heure islamiste" ("Birmingham in the Time of Islam") she describes her unease with the growing dislocation between normative British values and those of the several Islamic enclaves. She mentions the Small Heath quarter, where nearly 95% of the population is Muslim, where little girls wear veils; most of the men wear beards, and women wear jilbabs and niqabs to cover their bodies and faces. Market stalls close for the hours of prayer; the shops display Islamic clothes and the bookshops are all religious. Women she interviewed condemned France as a dictatorship based on secularism (laïcité), which they said they regarded as "a pretext for attacking Muslims". They also said that they approved of the UK because it allowed them to wear a full veil.

  Another young woman, Yasmina, explained that, although she may go out to a club at night, during the day she is forced to wear a veil and an abaya [full body covering]. She then goes on to speak of the extremists:

  "In England, they are free to speak. They speak only of prohibitions, they impose on one their rigid vision of Islam but, on the other hand, they listen to no-one, most of all those who disagree with them."

  Speaking of the state schools, Samouri describes "an Islamization of education unthinkable in our [French] secular republic". Later, she interviews Ali, an 18-year-old of French origin, whose father has become radicalized. Ali talks about his experience of Islamic education:

  "There are plenty of private Muslim schools and madrasas in this city. They pretend that they all preach tolerance, love and peace, but that isn't true. Behind their walls, they force-feed us with repetitive verses of the Qur'an, about hate and intolerance."

  Samouri cites Ali on the iron discipline imposed on him, the brutality used, the punishment for refusing to learn the Qur'an by heart without understanding a word of it, or for admitting he has a girlfriend.

  Elsewhere, Samouri notes young Muslim preachers for whom "Shari'a law remains the only safety for the soul and the only code of law to which we must refer". She interviews members of a Shari'a "court" before speaking with Gina Khan, an ex-Muslim who belongs to the anti-Shari'a organization One Law for All. According to Samouri, Khan — a secular feminist — considers the tribunals "a pretext for keeping women under pressure and a means for the religious fundamentalists to extend their influence within the community".

  Another teenager of French origin explains how his father prefers Birmingham to France because "one can wear the veil without any problem and one can find schools where boys and girls do not mix". "Birmingham," says Mobin, "is a little like a Muslim country. We are among ourselves, we do not mix. It's hard".

  Samouri herself finds this contrast between secular France and Muslim England disturbing. She sums it up thus:

  "A state within a state, or rather a rampant Islamization of one part of society — [is] something which France has succeeded in holding off for now, even if its secularist model is starting to be put to the test".

  Another French commentator, republishing Samouri's article, writes, "Birmingham is worse than Molenbeek" — the Brussels borough that The Guardian described as "becoming known as Europe's jihadi central."

  The comparison with Molenbeek may be somewhat exaggerated. What is perplexing is that French writers should focus on a British city when, in truth, the situation in France — despite its secularism — is in some ways far worse than in the UK. Recent authors have commented on France's growing love for Islam and its increasing weakness in the face of Islamist criminality. This weakness has been framed by a politically-correct desire to stress a multiculturalist policy at the expense of taking Muslim extremists and fundamentalist organizations at face value and with zero tolerance for their anti-Western rhetoric and actions. The result? Jihadist attacks in France have been among the worst in history. It is calculated that the country has some some 751 no-go zones ("zones urbaines sensibles"), places where extreme violence breaks out from time to time and where the police, firefighters, and other public agents dare not enter for fear of provoking further violence.

  Many national authorities and much of the media deny that such enclaves exist, but as the Norwegian expert Fjordman has recently explained:

  If you say that there are some areas where even the police are afraid to go, where the country's normal, secular laws barely apply, then it is indisputable that such areas now exist in several Western European countries. France is one of the hardest hit: it has a large population of Arab and African immigrants, including millions of Muslims.

  There are no such zones in the UK, certainly not at that level. There are Muslim enclaves in several cities where a non-Muslim may not be welcome; places that resemble Pakistan or Bangladesh more than England. But none of these is a no-go zone in the French, German or Swedish sense — places where the police, ambulances, and fire brigades are attacked if they enter, and where the only way in (to fight a fire, for example) is under armed escort.

  Samouri opens her article with a bold-type paragraph stating:

  "In the working-class quarters of the second city of England, the sectarian lifestyle of the Islamists increasingly imposes itself and threatens to blow up a society which has fallen victim to its multicultural utopia".

  Has she seen something British commentators have missed?

  The Molenbeek comparison may not be entirely exaggerated. In a 1000-page report, "Islamist Terrorism: Analysis of Offences and Attacks in the UK (1998-2015)," written by the respected analyst Hannah Stuart for Britain's Henry Jackson Society, Birmingham is named more than once as Britain's leading source of terrorism.

  One conclusion that stands out is that terror convictions have apparently doubled in the past five years. Worse, the number of offenders not previously known to the authorities has increased sharply. Women's involvement in terrorism, although still less than men's, "has trebled over the same period". Alarmingly, "Proportionally, offences involving beheadings or stabbings (planned or otherwise) increased eleven-fold across the time periods, from 4% to 44%." (p. xi)

  Only 10% of the attacks are committed by "lone wolves"; almost 80% were affiliated with, inspired by or linked to extremist networks — with 25% linked to al-Muhajiroun alone. As the report points out, that organization (which went under various names) was once defended by some Whitehall officials — a clear indication of governmental naivety.

  Omar Bakri Muhammed, who co-founded the British Islamist organization al-Muhajiroun, admitted in a 2013 television interview that he and co-founder Anjem Choudary sent western jihadists to fight in many different countries. (Image source: MEMRI video screenshot)

  A more important conclusion, however, is that a clear link is shown between highly-segregated Muslim areas and terrorism. As the Times report on the Henry Jackson Society review points out, this link "was previously denied by many". On the one hand:

  Nearly half of all British Muslims live in neighbourhoods where Muslims form less than a fifth of the population. However, a disproportionately low number of Islamist terrorists — 38% — come from such neighbourhoods. The city of Leicester, which has a sizeable but well-integrated Muslim population, has bred only two terrorists in the past 19 years.

  But on the other hand:

  Only 14% of British Muslims live in neighbourhoods that are more than 60% Muslim. However, the report finds, 24% of all Islamist terrorists come from these neighbourhoods. Birmingham, which has both a large and a highly segregated Muslim population, is perhaps the key example of the phenomenon.

  The report continues:

  Just five of Britain's 9,500 council wards — all in Birmingham — account for 26 convicted terrorists, a tenth of the national total. The wards — Springfield, Sparkbrook, Hodge Hill, Washwood Heath and Bordesley Green — contain sizeable areas where the vast majority of the population is Muslim.

   

  Birmingham as a whole, with 234,000 Muslims across its 40 council wards, had 39 convicted terrorists. That is many more than its Muslim population would suggest, and more than West Yorkshire, Greater Manchester and Lancashire put together, even though their combined Muslim population is about 650,000, nearly three times that of Birmingham. There are pockets of high segregation in the north of England but they are much smaller than in Birmingham.

   

  The greatest single number of convicted terrorists, 117, comes from London, but are much more widely spread across that city than in Birmingham and their numbers are roughly proportionate to the capital's million-strong Muslim community.

  Hannah Stuart, the study's author, has observed that her work has raised "difficult questions about how extremism takes root in deprived communities, many of which have high levels of segregation. Much more needs to be done to challenge extremism and promote pluralism and inclusivity on the ground."

  Many observers say Birmingham has failed that test:

  "It is a really strange situation," said Matt Bennett, the opposition spokesman for education on the council. "You have this closed community which is cut off from the rest of the city in lots of ways. The leadership of the council doesn't particularly wish to engage directly with Asian people — what they like to do is have a conversation with one person who they think can 'deliver' their support."

  Clearly, lack of integration is, not surprisingly, the root of a growing problem. This is the central theme of Dame Louise Casey's important report of last December to the British government. Carried out under instructions of David Cameron, prime minister at the time, "The Casey Review: A review into opportunity and integration" identifies some Muslim communities (essentially those formed by Pakistani and Bangladeshi immigrants and their offspring) as the most resistant to integration within British society. Such communities do little or nothing to encourage their children to join in non-Muslim education, events, or activities; many of their women speak no English and play no role within wider society, and large numbers say they prefer Islamic shari'a law to British law.

  Casey makes particular reference to the infamous Trojan Horse plot, uncovered in 2014, in which Muslim radicals conspired to introduce fundamentalist Salafi doctrines and practices into a range of Birmingham schools — not just private Muslim faith schools but regular state schools (pp. 114 ff.): "a number of schools in Birmingham had been taken over to ensure they were run on strict Islamic principles…"

  It is important to note that these were not 'Muslim' or 'faith' schools. [Former British counterterrorism chief] Peter Clarke, in his July 2014 report said:

  "I took particular note of the fact that the schools where it is alleged that this has happened are state non-faith schools…"

  He highlighted a range of inappropriate behaviour across the schools, such as irregularities in employment practices, bullying, intimidation, changes to the curriculum, inappropriate proselytizing in non-faith schools, unequal treatment and segregation. Specific examples included:

  • a teachers' social media discussion called the "Park View Brotherhood", in which homophobic, extremist and sectarian views were aired at Park View Academy and others;
  • teachers using anti-Western messages in assemblies, saying that White people would never have Muslim children's interests at heart;
  • the introduction of Friday Prayers in non-faith state schools, and pressure on staff and students to attend. In one school, a public address system was installed to call pupils to prayer, with a member of the staff shouting at students who were in the playground, not attending prayer, and embarrassing some girls when attention was drawn to them because girls who are menstruating are not allowed to attend prayer; and
  • senior staff calling students and staff who do not attend prayers 'k****r'. (Kuffar, the plural of kafir, an insulting term for "unbelievers". This affront reproduces the Salafi technique of condemning moderate or reformist Muslims as non-Muslims who may then be killed for being apostates.)

  Casey then quotes Clarke's conclusion:

  "There has been co-ordinated, deliberate and sustained action, carried out by a number of associated individuals, to introduce an intolerant and aggressive Islamic ethos into a few schools in Birmingham. This has been achieved in a number of schools by gaining influence on the governing bodies, installing sympathetic headteachers or senior members of staff, appointing like-minded people to key positions, and seeking to remove head teachers they do not feel sufficiently compliant."

  The situation, Casey states, although improved from 2014, remains unstable. She quotes Sir Michael Wilshaw, Her Majesty's Chief Inspector, in a letter to the Secretary of State for Education, which declared as late as July 8, 2016, that the situation "remains fragile", with:

  • a minority of people in the community who are still intent on destabilising these schools;
  • a lack of co-ordinated support for the schools in developing good practice;
  • a culture of fear in which teachers operate having gone underground but still there;
  • overt intimidation from some elements within the local community;
  • organised resistance to the personal, social and health education (PSHE) curriculum and the promotion of equality.

  Elsewhere, Casey notes two further issues in Birmingham alone, which shed light on the city's Muslim population. Birmingham has the largest number of women who are non-proficient in English (p. 96) and the largest number of mosques (161) in the UK (p. 125).

  For many years, the British government has fawned on its Muslim population; evidently the government thought that Muslims would in due course integrate, assimilate, and become fully British, as earlier immigrants had done. More than one survey, however, has shown that the younger generations are even more fundamentalist than their parents and grandparents, who came directly from Muslim countries. The younger generations were born in Britain but at a time when extremist Islam has been growing internationally, notably in countries with which British Muslim families have close connections. Not only that, but a plethora of fundamentalist preachers keep on passing through British Muslim enclaves. These preachers freely lecture in mosques and Islamic centres to youth organizations, and on college and university campuses.

  Finally, it might be worth noting that Khalid Masood, a convert to Islam who killed four and injured many more during his attack outside the Houses of Parliament in March, had been living in Birmingham before he set out to wage jihad in Britain's capital.

  It is time for some hard thinking about the ways in which modern British tolerance of the intolerant and its embrace of a wished-for, peace-loving multiculturalism have furthered this regression. Birmingham is probably the place to start.

  

  

• Hillary Clinton Explains Our 'North Korea, South Korea, China' Policy

  Authored by Gaius Publius via Down With Tyranny blog,

  "We don't want a unified Korean peninsula … We [also] don't want the North Koreans to cause more trouble than the system can absorb."

  —Hillary Clinton, 2013, speech to Goldman Sachs

  Our policy toward North Korea is not what most people think it is. We don't want the North Koreans to go away. In fact, we like them doing what they're doing; we just want less of it than they've been doing lately. If this sounds confusing, it's because this policy is unlike what the public has been led to assume. Thanks to something uncovered by WikiLeaks, the American public has a chance to be unconfused about what's really going on with respect to our policies in Korea.

  This piece isn't intended to criticize that policy; it may be an excellent one. I just want to help us understand it better.

  Our source for the U.S. government's actual Korean policy — going back decades really — is former Secretary of State Hillary Clinton. She resigned that position in February 2013, and on June 4, 2013 she gave a speech at Goldman Sachs with Lloyd Blankfein present (perhaps on stage with her) in which she discussed in what sounds like a very frank manner, among many other things, the U.S. policy toward the two Korea and the relationship of that policy to China.

  That speech and two others were sent by Tony Carrk of the Clinton campaign to a number of others in the campaign, including John Podesta. WikiLeaks subsequently released that email as part of its release of other Podesta emails (source email with attachments here). In that speech, Clinton spoke confidentially and, I believe, honestly. What she said in that speech, I take her as meaning truthfully. There's certainly no reason for her to lie to her peers, and in some cases her betters, at Goldman Sachs. The entire speech reads like elites talking with elites in a space reserved just for them.

  

  I'm not trying to impugn Clinton or WikiLeaks by writing this — that's not my intention at all. I just want to learn from what she has to say — from a position of knowledge — about the real U.S. policy toward North Korea. After all, if Goldman Sachs executives can be told this, it can't be that big a secret. We should be able to know it as well.

  What Clinton's Speech Tells Us about U.S. Korea Policy

  The WikiLeaks tweet is above. The entire speech, contained in the attachment to the email, is here. I've reprinted some of the relevant portions below, first quoting Ms. Clinton with some interspersed comments from me. Then, adding some thoughts about what this seems to imply about our approach to and relations with South Korea.

  The Korea section of the Goldman Sachs speech starts with a discussion of China, and then Blankfein pivots to Korea. Blankfein's whole question that leads to the Clinton quote tweeted by WikiLeaks above (my emphasis throughout):

  MR. BLANKFEIN: The Japanese — I was more surprised that it wasn't like that when you think of — all these different things. It's such a part of who they are, their response to Japan. If you bump into the Filipino fishing boats, then I think you really — while we're in the neighborhood [i.e., discussing Asia], the Chinese is going to help us or help themselves — what is helping themselves? North Korea? On the one hand they [the Chinese] wouldn't want — they don't want to unify Korea, but they can't really like a nutty nuclear power on their border. What is their interests and what are they going to help us do?

  Clinton's whole answer is reprinted in the WikiLeaks tweet attachment (click through to the tweet and expand the embedded image to read it all). The relevant portions, for my purposes, are printed below. From the rest of her remarks, the context of Blankfein's question and Clinton's answer is the threat posed by a North Korean ICBM, not unlike the situation our government faces today.

  MS. CLINTON: Well, I think [Chinese] traditional policy has been close to what you've described. We don't want a unified Korean peninsula, because if there were one South Korea would be dominant for the obvious economic and political reasons.

   

  We [also] don't want the North Koreans to cause more trouble than the system can absorb. So we've got a pretty good thing going with the previous North Korean leaders [Kim Il-sung and Kim Jung-il]. And then along comes the new young leader [Kim Jung-un], and he proceeds to insult the Chinese. He refuses to accept delegations coming from them. He engages in all kinds of both public and private rhetoric, which seems to suggest that he is preparing himself to stand against not only the South Koreans and the Japanese and the Americans, but also the Chinese.

  Translation — three points:

  • The U.S. prefers that Korea stay divided. If Korea were to unite, South Korea would be in charge, and we don't want South Korea to become any more powerful than it already is.
  • We also don't want the trouble North Korea causes South Korea to extend beyond the region. We want it to stay within previously defined bounds.
  • Our arrangement with the two previous North Korean leaders met both of those objectives. North Korea's new leader, Kim Jung-un, is threatening that arrangement.

  It appears that China has the same interest in keeping this situation as-is that we do. That is, they want South Korea (and us) to have a Korean adversary, but they don't want the adversary acting out of acceptable bounds — coloring outside the lines laid down by the Chinese (and the U.S.), as it were. Clinton:

  So the new [Chinese] leadership basically calls him [Kim Jung-un] on the carpet. And a high ranking North Korean military official has just finished a visit in Beijing and basically told [him, as a message from the Chinese]: Cut it out. Just stop it. Who do you think you are? And you are dependent on us [the Chinese], and you know it. And we expect you to demonstrate the respect that your father and your grandfather [Kim Jung-il, Kim Il-sung] showed toward us, and there will be a price to pay if you do not.

   

  Now, that looks back to an important connection of what I said before. The biggest supporters of a provocative North Korea has been the PLA [the Chinese People's Liberation Army]. The deep connections between the military leadership in China and in North Korea has really been the mainstay of the relationship. So now all of a sudden new leadership with Xi and his team, and they're saying to the North Koreans — and by extension to the PLA — no. It is not acceptable. We don't need this [trouble] right now. We've got other things going on. So you're going to have to pull back from your provocative actions, start talking to South Koreans again about the free trade zones, the business zones on the border, and get back to regular order and do it quickly.

   

  Now, we don't care if you occasionally shoot off a missile. That's good. That upsets the Americans and causes them heartburn, but you can't keep going down a path that is unpredictable. We don't like that. That is not acceptable to us.

   

  So I think they're trying to reign Kim Jong in. I think they're trying to send a clear message to the North Korean military. They also have a very significant trade relationship with Seoul and they're trying to reassure Seoul that, you know, we're now on the case.

  Clinton ends with a fourth point:

  • From the U.S. standpoint, the current problem is now on the Chinese to fix.

  Clinton:

  So they want to keep North Korea within their orbit. They want to keep it predictable in their view. They have made some rather significant statements recently that they would very much like to see the North Koreans pull back from their nuclear program. Because I and everybody else — and I know you had Leon Panetta here this morning. You know, we all have told the Chinese if they continue to develop this missile program and they get an ICBM that has the capacity to carry a small nuclear weapon on it, which is what they're aiming to do, we cannot abide that. Because they could not only do damage to our treaty allies, namely Japan and South Korea, but they could actually reach Hawaii and the west coast theoretically, and we're going to ring China with missile defense. We're going to put more of our fleet in the area.

   

  So China, come on. You either control them or we're going to have to defend against them.

  The four bullets above (three, and then one) give a very clear definition of longstanding U.S. policy toward the two Koreas. I think the only surprise in this, for us civilians, is that the U.S. doesn't want the Korean peninsula unified. So two questions: Why not? And, do the South Koreans know this? I'll offer brief answers below.

  The "Great Game" In East Asia — Keeping the Korean "Tiger" in Check

  South Korea is one of the great emerging nations in East Asia, one of the "Asian tigers," a manufacturing and economic powerhouse that's lately been turning into a technological and innovative powerhouse as well.

  For example, one of just many, from Forbes:

  Why South Korea Will Be The Next Global Hub For Tech Startups

   

  American business has long led the way in high tech density or the proportion of businesses that engage in activities such as Internet software and services, hardware and semiconductors. The US is fertile ground for tech start-ups with access to capital and a culture that celebrates risk taking. Other countries have made their mark on the world stage, competing to be prominent tech and innovation hubs. Israel has been lauded as a start-up nation with several hundred companies getting funded by venture capital each year. A number of these companies are now being acquired by the likes of Apple, Facebook and Google. Finland and Sweden have attracted notice by bringing us Angry Birds and Spotify among others. But a new start-up powerhouse is on the horizon – South Korea. […]

  In other words, South Korea has leaped beyond being a country that keeps U.S. tech CEOs wealthy — it's now taking steps that threaten that wealth itself. And not just in electronics; the biological research field — think cloning — is an area the South Koreans are trying to take a lead in as well.

  It's easy to understand Ms. Clinton's — and the business-captured American government's — interest in making sure that the U.S. CEO class isn't further threatened by a potential doubling of the capacity of the South Korean government and economy. Let them (the Koreans) manufacture to their heart's content, our policy seems to say; but to threaten our lead in billionaire-producing entrepreneurship … that's a bridge too far.

  Again, this is Clinton speaking, I'm absolutely certain, on behalf of U.S. government policy makers and the elites they serve: We don't want a unified Korean peninsula, because if there were one, an already-strong South Korea would be dominant for obvious economic reasons.

  As to whether the South Koreans know that this is our policy, I'd have to say, very likely yes. After all, if Clinton is saying this to meetings of Goldman Sachs executives, it can't be that big a secret. It's just that the South Korea leadership knows better than the North Korean leader how to handle it.

  [Update: It's been suggested in comments (initially here) that Clinton's "we" in her answer to Blankfein's question was a reference to China's policy, not our own. I'm doubtful that's true, but it's an interpretation worth considering. Even so, the U.S. and Chinese policies toward the two Koreas are certainly aligned, and, as Clinton says, "for the obvious economic and political reasons." (That argument was also expressed in comments here.)  I therefore think the thrust of the piece below is valid under either interpretation of Clinton's use of "we." –GP]

  

  

• China Launches First Domestically-Built Aircraft Carrier

  Exactly one day ago, we reported that “China’s first domestically built aircraft carrier will soon launch in Dalian, Liaoning Province for drills and trial voyages, putting to the test proprietary technology meant to further Beijing’s expansion in the South and East China seas.”

  A dock at the Dalian shipyard was being filled with water Sunday the local press reported, in preparation for the launch. The Chinese-made vessel is expected to enter service around 2020, joining China’s first and only aircraft carrier, a refurbished Ukrainian vessel known as the Liaoning.

  Fast forward just 24 hours, when moments ago the People’s Daily reported that China has officially launched its second aircraft carrier — and its first domestically built, in Dalian on Wednesday morning

  #BREAKING: China launches its second aircraft carrier — and its first domestically built, in Dalian on Wednesday morning pic.twitter.com/5yZYRTt6yu

  — People’s Daily,China (@PDChina) April 26, 2017

  //platform.twitter.com/widgets.js

  The new carrier, the first domestically-built one, was transferred from dry dock into the water at a launch ceremony that started at about 9 a.m. in Dalian shipyard of the China Shipbuilding Industry, according to Xinhua.

  It is China’s second aircraft carrier, which comes after the Liaoning, a refitted former Soviet Union-made carrier that was put into commission in the Chinese People’s Liberation Army Navy in 2012.

  In a statement, China’s Ministry of Defense’s announced that China’s second aircraft carrier launching ceremony was held at the China Shipbuilding Industry Corporation Dalian Shipyard this morning. Fan Changlong, member of the Political Bureau of the CPC Central Committee and vice chairman of the Central Military Commission, attended the ceremony and delivered a speech.

  More, google translated:

  The ceremony began at 9am with the majestic national anthem. In accordance with international practice, after cutting the ribbon, a “bottle throwing” ceremony took place. With a bottle of champagne broken ship bow, two sides of the jet ribbon, the surrounding ship with a whistle, the audience sounded warm applause. The aircraft carrier moved out of the dock and towed the dock under towing traction.

   

  The second aircraft carrier by our own development, started in November 2013, in March 2015 to start the construction of the dock. At present, the aircraft carrier main hull to complete the construction, power, electricity and other major system equipment installed in place. Docking is one of the major nodes in the construction of aircraft carriers, marking China’s independent design and construction of aircraft carriers to achieve significant results. The next step, the aircraft carrier will be planned for system equipment commissioning and outfitting construction, and a comprehensive mooring test.

   

  Navy, China Shipbuilding Industry Group leadership Shen Jinlong, Miao Hua, Hu asked Ming, as well as military and other relevant departments of the leadership and scientific research personnel, cadres and workers, representatives of officers and soldiers to participate in the ceremony.

  For those who may have missed our original post, here are the full details of China’s first domestically-build aircraft carrier.

  The new ship, like its predecessor, will be conventionally propelled, as opposed to nuclear-powered, and feature a sloped flight deck known as a ski jump for aircraft takeoff. It is somewhat smaller than the Liaoning, with a displacement of around 50,000 tons compared to around 67,000 tons. The SCMP notes that “from the successful refitting of the Liaoning in 2011 and its commission a year later, China spent just five years to produce the 001A.”

  

  China’s first home-built aircraft carrier awaits launch at a Dalian shipyard

  Around 200 visitors and reporters gathered in Dalian on Sunday, expecting a launch ceremony to coincide with the 68th anniversary of the Chinese navy’s founding. The scaffolding around the ship, temporarily named the Type 001A, was removed and the deck was cleared, Shanghai-based news portal thepaper.cn reported, suggesting that the launch date was getting close. However, experts said tidal conditions yesterday were not conducive for a launch to mark the navy’s birthday, and expected a ceremony to take place in the next few days.

  

  According to SCMP, the new vessel is designed to have more space for aircraft than the Liaoning, by some estimates letting the ship hold as many as 36 fighter jets, or 50% more than its predecessor. While the new carrier “differs little from the Liaoning as far as outward appearances go, its operational capabilities are vastly superior,” Chinese military expert Liang Fang told state-run China Central Television.

   

   

  Commentaries published by party mouthpiece People’s Daily on the PLA Navy anniversary yesterday said a strong maritime force was crucial.

   

  “Facing the increasingly complicated maritime security and sovereignty struggle, a strong navy is necessary to protect ­national sovereignty and maritime rights, overseas interests and take part in international cooperation,” one of the opinion pieces said.

   

  Another commentary said the nation’s aircraft carrier fleet had participated in training in the western Pacific last year, and that the launch of a new carrier was a sign that China was mastering ­naval technology.

  Nonetheless, military observers said the launch of the new carrier represented only modest progress in China’s military modernisation, given the technological gap ­between the PLA Navy and its most powerful rival in the Asia-Pacific region, the US Navy, which currently has 10 operational, nuclear-powered Nimitz-class carriers, which carry around 90 aircraft and helicopters and have a crew of 5,000 each.

  

  The new vessel is expected to operate mainly in the South China Sea alongside the Liaoning, which in December held its second set of exercises in the contested waters since entering service. Adding another ship would enable an aircraft carrier to remain present there while the other is in for maintenance. This arrangement, combined with ports and airstrips China has built on man-made islands in the sea, aims to give Beijing aerial supremacy over a region it considers central to its national interest and to curtail U.S. activity there.

  According to Nikkei, future Chinese aircraft carriers are likely to be built faster now that the country has amassed the design experience and technology to bring the first vessel to launch.

  Confirming this, work on a second Chinese-made carrier has already begun. The vessel probably will employ a steam catapult to launch aircraft, retired Maj. Gen. Xu Guangyu told Chinese media. A third vessel which has yet to begin production is expected to use nuclear propulsion, eliminating the need to resupply fuel. Work on escort vessels and submarines for a carrier strike group is also underway.

  Quoted by SCMP, Hong Kong-based military analyst Liang Guoliang said that with the launch of the Type 001A, China would still only have two carriers, with the new ship requiring two or three years before it was put into full service. He noted that the US has 10 carrier strike groups, with at least four deployed in the Asia-Pacific region. 

  “The US navy has 9.5 million tonnes of shipping, while China has just 400,000 tonnes, or 4 per cent of the US capability. The US also has different kinds of carrier-based fighters, including its advanced carrier variants of the F-35 fighter … while China just has the J-15,” Liang said. “Meanwhile, the US has more than 200,000 marines, while China is just trying to expand its force to 100,000.

  “I think the Chinese military should realise that there are still huge gaps in both hardware and software between the two countries’ maritime capabilities.”

  They probably do, which is why corporate espionage in the US is likely to intensify in the coming years as China rushes to cover the technological gap. And as China scrambles to catch up to the US fleet of aircraft carrier, it has also shown an eagerness to cover shortfalls in its submarine fleet: as reported on Friday, China is currently building the world’s largest submarine facility, which when operational later this year, will be able to build as many as 4 subs at the same time.

  

  

  

• US Destroyer Has Close Encounter With Iranian Vessel in Straits of Hormuz

  The USS Mahan has to take evasive actions in the Straits of Hormuz today, in order to avoid an Iranian ‘fast attack’ vessel. The Mahan sounded the danger alarm, fired flares and manned their weapons, but the Iranian cowards tucked tail and scattered before reaching within 1,000 yards of the U.S. destroyer.

  “Coming inbound at a high rate of speed like that and manning weapons, despite clear warnings from the ship, is obviously provocative behavior,” said one American official in describing the Iranian actions.

  This is the second time in recent months that the Mahan was put on high alert due to pesky Iranian vessels. Back in January, the Mahan fired three warning shots from a .50 caliber machine gun in order to stop small Iranian vessels from harassing them.

  The U.S. military said Iranian vessels harassed US warships a total of 35 times in 2016 — a 50% spike from the year prior.

  During the Presidential campaign, Trump was livid over the treatment of US sailors, after a swarm of Iranian vessels seized an American riverine, blindfolded the crew, struck the US flag in exchange for an Iranian, and interrogated 10 crew members, while humiliating them on Iranian tv.
  

  Trump said of the ordeal, “When I see pictures of them with arms up in the air and guns pointed at them, I wouldn’t exactly say that’s friendly.”

  Trump added at a campaign rally, “And by the way, with Iran, when they circle our beautiful destroyers with their little boats and they make gestures that our people — that they shouldn’t be allowed to make, they will be shot out of the water.”

  Content originally published at iBankCoin.com

   

  

• Russia Ready To Send Ground Troops To Syria: FARS

  Iran news agency FARS reports that according to Syrian military sources, Moscow has informed Damascus of its preparedness to dispatch ground troops to Syria.

  FARS – which like most US media should always be taken with a gran of salt – quotes the Al-Hadath news, according to whose sources Russia has announced that in case of the Syrian army’s request it is ready to send ground forces to Syria. The sources said that special Russian forces are prepared to be deployed in regions which are experiencing the most pressures by the terrorist groups.

  

  They added that the technical aspects of the plan have been studied and prepared by Russia, saying that the plan can be implemented upon Russian President Vladimir Putin’s order after Damascus’ official request.

  A Russian daily reported earlier this month that the country’s soldiers are about to shoulder the responsibility of restoring security to the Christian-populated regions during the Syrian Army’s imminent anti-terrorism operations in Northern Hama.

  FARS adds that according to Russian Izvestia, the Russian units will help popular forces in Hama province to restore security to the town of Mahradeh, whose population are mainly Christians.  The daily added that terrorists are under the Syrian Army’s siege from all directions.

  There have been fierce clashes between the government forces and militants near Hahradeh since April 4th. “Informed sources” believe that the army intends to complete the siege of the terrorists in Northern Hama to clean the region up to the border with Idlib province.

  A deployment of Russian troops in Syria may coincide with a deployment of US ground forces to Syria. Two weeks ago, Bloomberg reported that Trump’s national security advisor, H.R. McMaster was planning on sending between 10,000 and 50,000 troops to Syria. Needless to say, a showdown between thousands of Russian and US troops in Syria is unlikely to have a happy ending.

  

  

• JD Power Lowers 2017 Auto SAAR As High Discounts "Threaten Industry's Long-Term Health"

  After a disappointing March for the auto OEM’s, a hopeful wall street has set it’s sites on a rebound in April with consensus SAAR estimates currently set at 17.25 million, up from 16.53 million in March.  Per the chart below, the March 2017 print for auto sales was the lowest in over two years, despite massive incentive spending by the OEMs.

  

   

  Of course, OEMs didn’t bother to adjust production levels to sinking sales which pushed inventory days to the highest March print since 2009.

  

   

  But while wall street seems to be in a phase of perpetual optimism, JD Power and LMC Automotive have decided to lower their expectations for 2017 sales and warn that consumer discounts remain high enough to “threaten the industry’s long-term health.”  Per Reuters:

  U.S. auto sales in April likely fell almost 2 percent from a year earlier, with consumer discounts remaining at levels high enough to threaten the industry’s long-term health, industry consultants J.D. Power and LMC Automotive said on Tuesday.

   

  The consultancies also lowered their full-year 2017 forecast for new vehicle sales to 17.5 million units, from a previous forecast of 17.6 million.

   

  April U.S. new vehicle sales will be about 1.48 million units, a drop of nearly 2 percent from 1.51 million units a year earlier, the consultancies said.

   

  The forecast was based on the first 13 selling days of the month. Automakers are expected to report April U.S. sales results on May 2.

   

  The seasonally adjusted annualized rate for the month will be 17.5 million vehicles, flat versus the same month in 2016.

  Of course, as we’ve noted numerous times before (see “Morgan Stanley: Used Car Prices May Crash 50%“), the real story with the auto industry isn’t the sinking SAAR levels but rather the growing level of incentive spending required to keep sales from crashing even further. 

  “While industry retail sales pace remains high, it is being powered by elevated levels of incentive spending which pose a serious threat to the long-term health of the industry,” said Deirdre Borrego, senior vice president of automotive data and analytics at J.D. Power.

   

  Excessive discounts can help sell new vehicles, but undermine resale prices.

   

  The consultancies said consumer discounts averaged $3,499 per new vehicle sold, the highest ever for the month of April. The previous record was set in April 2009, during the height of the Great Recession.

  But, auto investors don’t seem to be all that worried so we’re sure everything will work out just fine when OEM’s release April sales on May 2nd.

  

  

  

• Here We Go Again: Another Futures Fund Is Caught In A "Short Gamma" Trap

  Remember when the catalyst for the relentless, seemingly inexplicable broad market melt-up in mid-February was revealed to be an overeager short-biased hedge fund, which had been caught in a “short gamma” feedback loop, forced to buy more S&P futures the higher the market went? Well, as RBC’s Charlie McElliggott writes, the “short gamma” feedback loop appears to have returned as yet another fund is now caught in the same trap, and the market will soon test just what the fund’s point of margin call max pain is, potentially taking the S&P to 2,400 – if not far higher – on short notice.

  As McElligott laments, “It’s awkward to write about this…AGAIN” which however won’t stop him from doing just that, and explains as follows:

  GUESS WHO’S BACK…MORE ‘SHORT GAMMA’ COCKROACHES, from RBC’s Charlie McElliggott

  The same dynamic at play during our last equities ‘melt-up’ is seemingly back ‘in-play.’  Remember the hypothetical story on the multi-billion dollar open-ended futures fund which found itself ‘synthetically short’ size SPX due to its strategy where it sells multiple upside calls for every in-the-money long call? Well the macro ‘relief rally’ yesterday reintroduced that very same ‘gap risk’ which this type of strategy hates.

  Well, we are now getting closer to ‘launch’ as the same situation is speculated to be ‘out there’ again.  There was some covering in 2330s and 2370s yesterday, while most of the size seemingly sits at the 2400 level.  As the market is sniffing out the upper strikes that such a strategy might be short, there is a self-fulfilling ‘short gamma’ as we push ever-closer to the pain-points.  Of course, today’s +++ earnings run is only further feeding into the anxiety, with strong #’s from CAT, DD, BIIB, MCD etc squeezing futures higher.  The fact of the matter is, the closer to actualizing these (short) upper strikes, the more likely we are to see that ‘itchy trigger finger’ on their delta-hedging.  I would keep an eye out on 2380 / 85 levels for possible next ‘breakpoints’ which could induce further forced covering.

  

  If we were to then push onward to / through the 2400 level, then it almost seems the whole market will ‘act short’ simply based on stops, as SPX / ES would be making new all-time highs, which could set-off ‘buy stops’ from shorts, or potentially drag new longs into the market on the momentum break.  This is OUTSIDE of the potential ‘short gamma’ from the above trade(s).  That said, the real chunky OI in both SPX and SPY options sits at 2425 / 2450 levels.  A break to those levels would see serious ‘short gamma’ pain.

  Mind you, this is all very relevant in relation to my current view that we are realistically still in the midst of a macro ‘range trade,’ especially in regards to rates / ‘reflation,’ as the commodities complexcontinues to really struggle as Crude falters and the Chinese liquidity driver fades.  My message has been to watch said “reflation trap” then, as there is still significant basis to short “reflation” at the 2.35/40 level—especially with this US data dynamic of ‘soft’ data rolling and ‘hard’ data now biased towards ‘missing.’

  Caveat emptor.

  

• Think Tank Reports ISIS Is Falling Apart: "May Actually Lead To More Terrorist Attacks Across The Globe"

  Authored by Daniel Lang via SHTFplan.com,

  

  It’s difficult to quantify how much of an effect ISIS has had our collective psyches. Since this organization started making the news several years ago, we’ve been inundated with utterly horrifying stories about ISIS on a nearly daily basis. These people do things that are so wicked, it’s hard to believe that they were committed by human beings. Because of that, I suspect that long after ISIS is gone, their organization will be a talking point for decades in much the same way that Hitler and the Nazis are still brought up on a regular basis today.

  Fortunately, it appears that ISIS is becoming history as we speak. All evidence suggests that the moment of collapse for the ISIS caliphate is rapidly approaching. In fact, the RAND Corporation recently published a report that spells out just how much ISIS has declined over the past few years.

  The report found that ISIS, also known as the Islamic State, “has lost substantial control of territory and people since 2014 in Iraq, Syria, Afghanistan, Libya and Nigeria,” putting it in danger of losing its state, which it calls a “caliphate,” altogether.

   

  But control over territory and people isn’t the only thing that makes ISIS a formidable terrorist organization. The group has recently been focusing heavily on external attacks, some of which are mounted without any direct orders from ISIS leaders.

  RAND reported that ISIS has lost 57% of its territory and 73% of its population. And much more importantly, polls suggest that their support in the Muslim world is rapidly dwindling. ISIS isn’t just a terrorist group. It’s an insurgency that tried to carve out a state from Iraq and Syria, and no insurgency could have made it this far unless they had at least some support among the population. Now ISIS is losing that as well.

  However, this encouraging news comes with a catch.

  It’s important to keep in mind that the RAND Corporation is a major facet of the military-industrial complex. So what they think will happen after the caliphate collapses is very telling.

  The group still has enough supporters, though, to be considered a serious threat to countries in the Middle East and around the world. Rand also found that ISIS attacks have shot up in recent months. The data suggests that ISIS “has begun to move from an insurgent group that controls territory to a clandestine terrorist group that conducts attacks against government officials and noncombatants,” the report said. This is the model of ISIS’ predecessor organization, Al Qaeda.

   

  Though it seems that the US-led campaign against ISIS has been successful so far, ISIS remains a long way from extinction.

   

  “Fully eliminating the threat the Islamic State poses will require continued American leadership for years to come,” the report said. “… In the short and perhaps medium terms, this contraction in territorial control may actually lead to more terrorist attacks across the globe. But over time, the group’s capacity to recruit, fund, organize, and inspire such attacks will likely diminish, and its brand may lose its allure if the Islamic State no longer controls territory in Iraq and Syria.”

  In other words, the military-industrial complex is licking its chops. That’s because ISIS, which is largely a creation of the West, is about to replace Al-Qaeda as America’s elusive bogeyman. Long after their hellish caliphate is dead, they’ll be launching attacks on the United States from far-flung lands, which will surely be used as an excuse to decimate our freedoms, and drag us into many more wars in the future. A lot can happen between now, and when ISIS “loses its allure.”

  

  

• San Francisco Judge Blocks Trump's Sanctuary City Order

  To our complete ‘shock,’ a federal judge in San Francisco has just blocked Trump’s Executive Order intended to withhold funding from communities that limit cooperation with U.S. immigration authorities.  The basis of the finding is that only Congress, not the president, has authority to attach new conditions to federal spending.

  “The Constitution vests the spending powers in Congress, not the President, so the Order cannot constitutionally place new conditions on federal funds. Further, the Tenth Amendment requires that conditions on federal funds be unambiguous and timely made; that they  bear some relation to the funds at issue; and that the total financial incentive not be coercive. Federal funding that bears no meaningful relationship to immigration enforcement cannot be threatened merely because a jurisdiction chooses an immigration enforcement strategy of which the President disapproves.”

  U.S. District Judge William Orrick, an Obama appointee, issued the temporary ruling moments ago after San Francisco and Santa Clara County argued that it threatened billions of dollars in federal funding. The decision will stay in place while the lawsuit moves through court.

  Ironically, an attorney for the Justice Department, Chad Readler, downplayed the usefulness of the Executive Order admitting at a recent court hearing that it only applied to three Justice Department and Homeland Security Department grants that amounted to less than $1 million nationally and possibly no San Francisco funding at all. 

  Meanwhile, for the first time we learn that the DOJ, at oral argument, also contended the sanctuary cities EO was toothless–merely an exercise of Trump’s “bully pulpit” to “encourage communities and states to comply with the law.”

  At oral argument, DOJ contended the sanctuary cities EO was toothless–merely an exercise of Trump’s “bully pulpit.” https://t.co/aKewBeAHFR pic.twitter.com/Udvsjd6zz4

  — southpaw (@nycsouthpaw) April 25, 2017

  But, Judge Orrick disagreed with the scope of the Executive Order saying that it attempts to “to reach all federal grants, not merely the three mentioned at the hearing.”

  It is heartening that the Government’s lawyers recognize that the Order cannot do more constitutionally than enforce existing law. But Section 9(a), by its plain language, attempts to  reach all federal grants, not merely the three mentioned at the hearing. The rest of the Order is  broader still, addressing all federal funding. And if there was doubt about the scope of the Order, the President and Attorney General have erased it with their public comments. The President has called it “a weapon” to use against jurisdictions that disagree with his preferred policies of immigration enforcement, and his press secretary has reiterated that the President intends to ensure that “counties and other institutions that remain sanctuary cites don’t get federal government funding in compliance with the executive order.” The Attorney General has warned that  jurisdictions that do not comply with Section 1373 would suffer “withholding grants, termination of grants, and disbarment or ineligibility for future grants,” and the “claw back” of any funds previously awarded. Section 9(a) is not reasonably susceptible to the new, narrow interpretation offered at the hearing.

  …and apparently Judge Orrick didn’t think the DOJ’s arguments were even “legally plausible.”

  hahahahahaha pic.twitter.com/884QHGvYyY

  — southpaw (@nycsouthpaw) April 25, 2017

  So, if the DOJ believes that the scope of the Executive Order would only impact $1mm in federal funding and was “merely an exercise of Trump’s ‘bully pulpit’, then we have to wonder whether the whole thing was just a charade to avoid more “flip-flopping” accusations?  What say you?

  Here is the full order:

  

  

Digest powered by RSS Digest

• Venezuela's Maduro – Selling The Golden Goose

  Authored by Jeff Thomas via InternationalMan.com,

  Venezuela is a naturally rich nation. It’s ranked seventh worldwide for biodiversity and has the world’s largest reserves of oil. This is a country that deserves, more than most, to thrive. However, as in all countries, it passes through economic cycles and, when on a downward curve, would-be leaders take the opportunity to claim that the “greedy rich” have sent the economy into a tailspin (which can sometimes be the case) and that the solution is to adopt a collectivist approach to governance.

  In 1989, Venezuela was experiencing a downturn. Riots broke out, followed by two attempted coups in 1992. The following year, President Pérez was impeached for embezzlement of public funds and the red carpet of opportunity was rolled out for the charismatic former coup participant Hugo Chávez. He took office as president in 1998. A new constitution was drawn up in 1999 and, as in so many countries previously, the people enthusiastically welcomed the new collectivist regime.

  “When people can vote on issues involving the transfer of wealth to themselves from others, the ballot box becomes a weapon with which the majority plunders the minority. That is the point of no return, the point where the doomsday mechanism begins to accelerate until the system self-destructs. The plundered grow weary of carrying the load and eventually join the plunderers. The productive base of the economy diminishes further until only the state remains.”
  – G. Edward Griffin

  As in all collectivist experiments, the new entitlements meted out to the population had to be funded somehow and, as is customary, those who create the wealth in Venezuela were required to pay for its distribution to those who were less productive.

  In the beginning, this form of theft appears to work well and, not surprisingly, many of the supporters of Mister Chávez saw him as the messiah of the common man. Unfortunately, as is always the case, bleeding the wealth from those who create it makes it increasingly difficult for them to continue to expand the creation of it and, as the wealth continues to be drained, contraction eventually takes place, making the entire nation poorer in every way.

  At some point the collectivist system begins to unravel and, as luck would have it, the unravelling for Venezuela coincided with the death of its cherished leader.

  In 2013, former bus driver Nicolás Maduro was elected as his successor. Two months earlier, the currency had been devalued to combat increasing shortages of basic goods and Venezuela fell into recession within a year of Mister Maduro taking office. By 2016, he declared a state of national emergency and proceeded to institute a series of knee-jerk responses to increasing economic decline, which would, to some degree, appease the struggling populace, but which would, ultimately, exacerbate the problem.

  As conditions have worsened, Mister Maduro’s “solutions” have become increasingly desperate. (Editor’s note: Jeff Thomas has provided commentary on Venezuela’s decline in several editions of International Man: “Watch the Movie,” Jan. 2014, “Venezuela, the Sequel,” Dec. 2016, and “A Chicken in Every Pot,” Dec. 2016.)

  In so doing, he hasn’t exactly been creative. He has, instead, resorted to all the classic measures that have been used by collectivists before him. The unfortunate conundrum for a collectivist leader is that the real solution is a return to the free-market system and no leader is going to admit that his entire raison d'être has been based upon a false premise.

  It’s important to note that, in any nation, the populace tends to believe that their leader’s efforts, however flawed they may have been, were intended to serve the people well. However, this is almost never the case. I’ve known many political leaders personally and can attest that, regardless of the nation they represent, their concern is almost entirely for their own personal welfare and advancement. In fact, those who are pathological in this pursuit are very often the most successful in rising to the top, by virtue of their heightened determination and obsession with self-aggrandizement.

  And so, Mister Maduro has relied on ever-increasing price controls, capital controls, devaluation of the national currency, takeover of private sector industry, and governance by decree. Each of these measures, in every instance, served to send the Venezuelan economy spiraling further downward.

  The result has been a decline in the creation of wealth, the cessation of production of many essential goods, the overtaking of factories by the military, a dramatic increase in crimes of desperation, the alienation of overseas business partners, purchasers, and vendors, and an inability to pay international debt.

  This last failure has led to an ironic situation. Although the national currency is in a state of hyperinflation, Venezuela cannot pay for the shipments of new, higher-denomination bank notes it has ordered from printers overseas, as the inflated currency is not trusted by the printers.

  

  At this point, if the leader of a country truly had any loyalty to his country or compassion for his people, he would most certainly have resigned, as he is clearly unfit to lead.

  But this almost never occurs. Whether the leader is Josef Stalin, Juan Perón, or Fidel Castro, no matter how dire the conditions become for the populace, the leader steadfastly refuses to relinquish the reins. What occurs instead is that he maintains his own personal level of lavish lifestyle, circles the wagons, continues or expands upon the measures that have caused the destruction, and becomes more autocratic.

  It’s important to understand that it’s highly unusual for the leader to capitulate at this point. Almost invariably he will opt for the country to go down in flames around him rather than relinquish power.

  That being the case, we now observe that Mister Maduro, having run out of rabbits to pull out of the hat, has made the decision to sell the golden goose that was responsible for the creation of wealth in the first instance—oil.

  

  Seventy percent of Petropiar is owned by the state-run Petróleos de Venezuela, and 30% by its overseas partner, Chevron. The government has now offered to sell a portion of its shares to the Russian Rosneft, along with a stake in the rights to extract oil from the premium-grade Orinoco Oil Belt. This, of course, is no less than a stab in the back for Chevron. (Rosneft faces sanctions from the US, which, of course, Chevron does not.)

  Venezuela has also expropriated shares belonging to ConocoPhillips, for which it has not yet paid, at the same time as they’re negotiating with a Japanese investment bank to obtain further funding.

  Each of the above has been undertaken in a desperate attempt to pay external debt, which, until the present, has allowed the Venezuelan economy to continue to function. It also allows for the emergency delivery of gasoline to keep Venezuela in motion. Although Venezuela has eighteen of its own refineries, they’ve also fallen victim to the economic crisis and without emergency gasoline supply from overseas, thousands of workers will be unable to report for work to keep what remains of the economy functioning.

  And so Mister Maduro, in order to buy a bit more time in the presidential mansion, is selling the golden goose. For those who wonder why it’s so often the case that a nation that’s been knocked down economically rarely rises up again within the same generation, the answer is manifestly clear in Venezuela. Leaders on the way out tend to sell or destroy virtually all that’s of value within the country, eliminating the resources through which a recovery may be possible, even if the country then returns to a free-market system.

  

  *  *  *

  The situation in Venezuela is extraordinarily toxic. But a similar pattern is playing out in major countries around the globe. For too long, careless governments have used shortsighted strategies to prop up major world economies and prolong their time in power. This can only go on for so long… In this urgent video, Doug Casey and his team reveal why an unprecedented global financial disaster is now inevitable—and what you can do to protect yourself. Click here to watch it now.

  

  

• Elites Are Orchestrating A Global Catastrophe: "There Are Many Things The President Does Not Know"

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

  

  Following the money is always the key and crucial element to determining the “probable cause/modus operandi” regarding to globalist actions.  Although there are many who believe that President Trump is the panacea to all our problems, even they may perhaps admit that there are forces other than the President that drive our country, as well as the world.  The shadowy cabal of globalists, Bilderbergers, bankers, and other secretive organizations bent on a “union” of totalitarian control are almost too numerous to count.

  There are many things the President does not know.  This is intentional on the part of the moneyed interests that control the very fabric of our society.  The interests are corporate, political, and religious: a three-level tier of control over all the facets of human society.  Just as one individual person cannot “dominate” one of these sectors, the sectors themselves cannot dominate.  They are forced into a symbiotic relationship rooted in commensalism, where each of these “parasites” benefits the other two.

  The problem lies in the fact that these interests are elitists who believe in the forced imposition of their philosophies upon the masses.  They also believe in “culling the herd,” and maintaining a servile population at minimum levels to carry out all menial labor and industrial production (the Deltas and Epsilons of Huxley’s Brave New World) as they direct.  Patiently these elitists have been awaiting the day when their “1984” society is a reality, crafting and shaping it all along throughout the decades.

  The numbers of humanity pose a problem, because they cannot effectively eradicate all necessary without a large-scale plague or a war, and after such an event, the planet itself might be unsustainable.

  The key question for them: how to kill off about 6 to 6 ½ billion people without destroying the world?

  The most efficient way would be with a limited nuclear war that destroyed enough key targets to minimize postwar effectiveness of the major powers, in a manner that does not irradiate most of the warring nations.  The key to the entire equation is to take down the United States.  The EMP (Electromagnetic Pulse) is the weapon of choice.  This would paralyze all the infrastructure, leading to (as so eloquently outlined in the book “One Second After”) mass die-offs and the reduction of populations to pre-industrial societies.

  The shielded and stocked communities of the elite could just sit back and allow the populations to destroy themselves and whittle down the numbers.  After a time (most likely already estimated and predetermined), mercenary forces of the elitists could emerge to mop up the remnant, enslaving and subjugating them completely.

  The question isn’t whether this is in the works: it is.  The elite have been following such plans as revealed in the Iron Mountain Report, and the moneyed interests have been crafting their plans long before House wrote Philip Dru, Administrator, as he and Wilson created the Federal Reserve and laid the roots for the cancer that is pervasive and underlying the thin veneer of our phony, Hallmark-Card society.

  The numerous articles about the millionaires and billionaires forming “intentional communities” and compounds/complexes for the purpose of surviving an apocalyptic event/societal collapse are not inaccurate.  The widespread reports of tunnel complexes, nonstop truck deliveries, and the diversion of taxpayer-funded government resources to secret locations throughout the United States are not inaccurate.  Jesse Ventura was investigating many of these matters before the moneyed interests put a stop to his actions and he retired from the field without fanfare.  Everyone who has exposed or threatened to expose them has either been marginalized or destroyed.  Just as people search for the “one” hero, they are also easily manipulated to focus upon “one” villain, such as a Kim Jong-Un, or a Bashar al-Assad.  Substitute the name “Emmanuel Goldstein” for either of them before the Two-Minutes Hate is conducted.

  Fast forward to now.  The bottom line is that when different factors come together “coincidentally” the probability for action by the elites and the point of no return is increased exponentially.

  They haven’t ushered in their era yet; they will not until they’re certain they can pull it off, but they will eventually make a play for it.

  These power-brokers will not commit themselves in the gamble unless they’re sure of a win.  For this reason, it is important to monitor the hot spots for those convergent points to know when something is likely to occur: when the possibility exists, and the probability increases.  One of those points of convergence is this week.

  The North Koreans are supposed to test another nuclear device on or about the 25^th of this month.  “Coincidentally,” that EMP “drill” named Operation Gotham Shield is supposed to run through April 25th, and possibly a little longer.  Coincidentally, there was a power outage in three different U.S. cities: San Francisco, Los Angeles, and New York City on Thursday.  Coincidentally, Russian bomber and intelligence-gathering aircraft have been flying test runs along the coast of Alaska, for four days straight with the U.S. and even Canada scrambling fighters to intercept.  Coincidentally, the Russians claim to have electronic devices with an EMP-type effect, already used against the USS Donald Cook, a guided missile destroyer with Tomahawk missiles back in November of 2014.  Coincidentally, the U.S. naval armada is set to arrive in the waters off the Korean coast on April 26th… right in line with the EMP drill “Operation Gotham Shield.”

  All these factors point toward a false flag.  If the opportunity to pull such a false flag off arises, they will seize upon it.  Trolls without number try to disparage this concept… the “nothing has happened yet, therefore nothing will happen” crowd.  The ones who are so certain that all of this is just “fear porn” or a “sham” of some kind…don’t pay their nonproductive and perhaps remunerated redundancies any mind.  The whole point is to be aware of what is going on and try to survive it.

  Be that “10^th man” as outlined in the film World War Z, and consider what the herd has been conditioned not to consider, and it might improve your chances to survive what is coming: what the elites have planned and will trigger with a False Flag.

  “No matter how improbable it may seem, the tenth man has to start thinking with the assumption that the other nine are wrong.”

  

  

• Baby Boomers Borrowed $100BN In Student Loans For Their Children And Now Defaults Are Soaring

  America’s snowflake millennials aren’t used to being told ‘no’, especially by their parents.  Perhaps that’s why, as we pointed out a few days ago, more millennials than ever are now living at home with mom and roughly one quarter of them don’t even both to enroll in classes and/or find a job (see “A Quarter Of Millennials Living At Home Neither Work Nor Study“).  But, when it comes to racking up massive student loans for their lazy, millennial, snowflakes, we suspect a healthy portion of about 3.5 million Baby Boomers are wishing they had a do-over to do just that.

  Unfortunately, rather than making some difficult decisions about affordability and/or forcing their kids to pay for their own education, Baby Boomers have incurred nearly $100 billion in student loans so that little Johnny and/or Susie could get that Anthro degree they always wanted. 

  In fact, as the Wall Street Journal notes today, so-called “Parent Plus Loans” have soared over the past 15 years as parents have increasingly found it impossible to cover college tuition costs.

  Parent Plus, created by Congress in 1980, allows parents to borrow to cover tuition and living expenses—often after their children borrow the maximum in undergraduate federal loans, capped by law at $5,500 a year for freshmen, $6,500 for sophomores and $7,500 for juniors and seniors. There is no limit to how much parents can borrow. Supporters say the program ensures students can go to schools of their choice.

  

   

  When it comes to federally subsidized student loans the underwriting standards put even the no-income, no-doc mortgages of 2005 to shame.  Just take the case of Sherry McPherson as an example.  Per the WSJ, McPherson was able to secure $100,000 in student loans for her son and herself to attend a trade school  despite “her shaky credit and unemployment.”  Adding insult to injury, for taxpayers at least, McPherson has already refinanced her loans into one of Obama’s “income-driven plans” which “sets her payments at zero while she is unemployed.”

  Sherry McPherson took out Parent Plus debt in 2006 so her son could enroll in a seven-month certificate program at a Seattle for-profit school that teaches commercial diving. She was an unemployed single mother with thousands of dollars in credit-card debt, a car loan and a subprime credit score. She had just retired from the Army after suffering an injury in Iraq.

   

  The school, the Divers Institute of Technology, told Ms. McPherson she needed to borrow nearly $16,000 to cover remaining tuition after her son maxed out on undergraduate federal loans, she recalls.

   

  Ms. McPherson, now 50, remembers telling the school’s financial-aid administrator she wouldn’t be approved because of her shaky credit and unemployment.

   

  “She looked at me and said, ‘Look, all we need is your Social Security number,’ ” recalls Ms. McPherson. “They approved me in three minutes.”

   

  She hasn’t worked since, partly because she attended college and graduate school herself. Her Parent Plus balance has more than doubled. Combined with her own student loans, she now owes more than $100,000 to the federal government.

   

  Ms. McPherson has refinanced into an income-driven plan, which sets her payments at zero while she is unemployed.

  And while it may sound outrageous, McPherson’s story is hardly an anomaly with over 40% of student loans originated in 2009 – 2013 going to subprime borrowers, more than double the subprime mix of the mortgage market in 2005.

  

   

  Now, just as these parents are entering their retirement years, a record number of them are having their Social Security and pension payments garnished to pay for student loans that they never had a prayer of being able to afford.  In fact, as of September 2015, more than 330,000 people, or 11% of borrowers, had gone at least a year without making a payment on a Parent Plus loan and over 40,000 of them were having their income garnished by the federal government. 

  The number of Americans who had wages, tax refunds or Social Security checks reduced because of unpaid student debt increased 71% between September 2010 and September 2015, according to the GAO. About 41,000 Parent Plus borrowers were among one million student-loan recipients who had checks garnished in the 2015 fiscal year. The government garnished the Social Security checks of 173,000 borrowers from student-loan programs in 2015, up from 36,000 in 2002.

  

   

  Of course, it’s not just parents that are defaulting on student loans.  Roughly eight million Americans owing $137 billion are at least 360 days delinquent on federal student loans, nearly the number of homeowners who lost their homes because of the housing crisis.

  Meanwhile, the Obama administration recognized that the Parent Plus loan program was saddling 1,000s of people with loans they could never repay back in 2011 and took steps to curb lending to “high-risk” individuals.  Then, Cheryl Smith of the United Negro College Fund apparently reminded Obama that making financial decisions based purely on financial metrics is racist, so he promptly reversed his own rules.

  The program checks only a borrower’s past five years of credit for major blemishes such as bankruptcy or foreclosure, and the past two years for delinquency on debts of more than $2,085.  Consumer counselors are hearing from borrowers who make as little as minimum wage but borrowed tens of thousands of dollars and now can’t repay.

   

  Obama administration officials, worried Parent Plus was heaping debt on high-risk borrowers, put in place tighter restrictions in 2011. But after schools argued stiffer underwriting would prevent many students from covering tuition, thus reducing college access for minorities and poor students, the administration rolled back the new rules.

   

  “Without this program, our fear is that many of these families would be getting private loans at less-favorable terms or less-favorable repayment options,” or they wouldn’t be able to cover tuition at all, says Cheryl Smith, head of government affairs for the United Negro College Fund.

  Of course, we suspect the Obama administration decided it was better to seek taxpayer forgiveness than permission as James Kvaal, Obama’s top education advisor and a man who undoubtedly was part of the decision to loosen lending standards admits: “At some point, we’re going to have to realize that a bunch of loans that have been made are not going to be repaid.”

  

  

• Cherokee Nation Files Lawsuit Against Big Pharma Over Opioid Epidemic

  Authored by Alex Thomas via TheAntiMedia.org,

  Late last week, lawyers representing the Cherokee Nation filed a lawsuit against major pharmaceutical companies, claiming they have pumped dangerous painkillers into Native American communities in Oklahoma. The Washington Post obtained a copy of the court filing and reported that the companies are accused of breaking laws by “failing to prevent the diversion of pain pills to the black market.”

  Specifically, the suit claims the corporations “turned a blind eye to the problem of opioid diversion and profited from the sale of prescription opioids to the citizens of the Cherokee Nation in quantities that far exceeded the number of prescriptions that could reasonably have been used for legitimate medical purposes.” With the markets bursting with pain pills, the drugs quickly found their way onto the black market. Lawyers for the Cherokee Nation posit that the companies bear some of the responsibility for that “opioid diversion.”

  The claim the opioid crisis has caused the Cherokee Nation to incur “increased spending on law enforcement, medical facilities, drug treatment centers and foster and adoption programs,” the Post reported.

  Attorneys hope that by filing the suits in tribal court, they will be able to gain quicker access to records that could show distinct negligence on the part of major drug companies. The suit names McKesson, Cardinal Health, and AmerisourceBergen, which together control 85% of prescription drug distribution in the United States. Walgreen’s and CVS are also included in the suit.

  In late 2016, an investigative piece by the West Virginia Gazette reported that the same three companies “supplied more than half of all pain pills statewide” while West Virginia was in the throes of a massive opioid crisis. In one county, AmerisouceBergen went from distributing 292,000 pills to 1.2 million pills in a single year. In a statement, Amerisource passed the blame, saying doctors and pharmacists — not the companies — were to blame.

  In reference to the Cherokee Nation lawsuit, AmerisourceBergen issued a statement similar to their West Virginia defense, claiming “the issue of opioid abuse is a complex one that spans the full healthcare spectrum, including manufacturers, wholesalers, insurers, prescribers, pharmacists and regulatory and enforcement agencies.” However, Cherokee Attorney General Todd Hembree didn’t seem to echo the drug companies’ sentiments. He claimed the corporations’ “main goal is profit, and this scourge has cost lives and the Cherokee Nation millions.” The West Virginia Gazette article reported that the CEOs of the three major companies have collectively been paid $450 million in the past four years.

  Like the lawsuit leveled against the companies in West Virginia, the Cherokee lawsuit charges the companies, commonly referred to as “the big three,” with pursuing “unfair and deceptive practices.”

  “These defendants really had the ability to limit the number of deaths and the level of addiction if they just followed the law,” said Richard Fields, a lawyer for the Cherokees.

  The lawsuit alleges that in 2015, the companies pumped enough drugs into the Cherokee Nation to provide “every adult and child with 955 5mg pills.” In West Virginia, that number was 433.

  And the companies have put their earnings to good use, filling the pockets of politicians they hope might be sympathetic to their causes. The Center for Responsive Politics showed that AmerisourceBergen gave $20k to Senator Marco Rubio (R-FL) and over $10k to Senator Chuck Schumer (D-NY) — both of whom have loud voices in Washington DC.

  The Cherokee Nation’s lawsuit is unlikely to be the last filed against the “big three,” as the opioid crisis sweeping the nation shows no signs of slowing down. A fact sheet published by the American Society of Addiction Medicine states that “heroin overdose deaths among women have tripled [from 2010 to 2013].”

  Principal chief of the Cherokees, Bill John Baker, said, “[T]ribal nations have survived disease, removal from our homelands, termination and other adversities, and still we prospered. However, I fear the opioid epidemic is emerging as the next great challenge of our modern era.”

  The lawyers filing cases against the companies are hoping the multi-billion dollar corporations will start taking responsibility for the drugs they sell.

  

  

• "Don't Open It" – 9 Mexican States On Alert After Radioactive Material Stolen

  In light of the recent spate of emergency drills and nuclear attack
  preparedness plans across the United States, it seemed notable that an unknown amount of stolen radioactive material has prompted the head of national emergency services to issue an alert today in nine Mexican states.

  

  A vehicle carrying mobile industrial radiography equipment filled with Iridium-192 was stolen in the city of Tlaquepaque in the state of Jalisco, and as Reuters reports, the alert and search for the stolen material covers the states of Jalisco, Colima, Nayarit, Aguascalientes, Guanajuato, Michoacan San Luis Potosi, Durango and Zacatecas, according to a post on Luis Felipe Puente’s Twitter account.

  ??Alerta en #Jal, #Col, #Nay, #Ags, #Gto, #Mich, #SLP, #Dgo y #Zac, por fuente radiactiva robada . Si la ves repórtala al 911 y no la abras. pic.twitter.com/Z9L93BG1Bo

  — Luis Felipe Puente (@LUISFELIPE_P) April 24, 2017

  //platform.twitter.com/widgets.js

  Puente encouraged people with information about the stolen material to report it but added: “don’t open it.”

  Somewhat shockingly, theft of radioactive material in Mexico is a somewhat of a common occurrence. Last year a container of radioactive substance used for industrial X-rays was also taken along with a car. Similar occurrences also happened in April 2015 and in July 2014. In December 2013, thieves – apparently unaware of the contents of their heist – stole a vehicle containing medical equipment with highly radioactive cobalt-60, a material that could be used to produce a “dirty bomb,” according to the IAEA, the UN’s nuclear watchdog.

  

  

• Bernie To Introduce $15 Federal Minimum Wage Legislation On Wednesday

  We all knew it was coming and now it has finally been confirmed that the Senate’s favorite Socialist will introduce legislation later this week calling for a $15 federal minimum wage.  The pending release of the bill was confirmed earlier today by Bloomberg’s Josh Eidelson.  Apparently co-sponsored by fellow liberals, Senator Murray, Keith Ellison, Bobby Scott and Raul Grijalva, the bill will call for a $15 federal minimum wage to be fully implemented by 2024.

  Bernie Sanders, Sen. Murray, Keith Ellison, Bobby Scott, Raul Grijalva et al will unveil bill Wednesday to raise minimum wage to $15 by 2024

  — Josh Eidelson (@josheidelson) April 24, 2017

  //platform.twitter.com/widgets.js

   

  For those silly ‘math’ people out there, that’s a mere 107% increase in minimum wage over just a few short years, which we suspect will at least slightly outpace inflation over the same period.

  As our readers are undoubtedly aware, Bernie has long been an advocate of the $15 “living wage.” The Daily Caller provided some background on the other sponsors’ efforts to meddle in labor markets.

  Murray has pushed for a federal minimum wage increase in the past, introducing the “Raise the Wage Act” in April 2015. The legislation called for the federal minimum wage to be increased from $7.25 to $12 an hour by 2020. The bill never made it far in the Republican-controlled Congress, but Murray has remained a leader in efforts to increase the federal minimum wage.

   

  Ellison lost narrowly to Perez in the DNC chairperson race and remains a favorite among liberal activists. The progressive Minnesota-Democrat is a favorite among unions, and has been a strong advocate for the Fight for Fifteen movement.

   

  Grijalva, who co-chairs the Congressional Progressive Caucus (CPC) with Ellison, was a part of efforts by the CPC to raise the minimum wage to $15 per hour in the summer of 2015. Shortly after Murray’s efforts, the CPC introduced the “Pay Workers a Living Wage Act” in July 2015.

   

  Scott joined Murray in sponsoring efforts to get the minimum wage to $12 per hour in 2015, arguing (at the time) that a $12 minimum wage was much more politically feasible at the time.

  We’ve written extensively about the unintended consequences of higher minimum wages, namely the pink slips that seem to come shortly after their implementation.  So rather than rehash all of the stats, for those interested, here are a few of our favorite articles on the topic:

  • Something “Unexpected” Happened When Seattle Raised The Minimum Wage
  • Harvard ‘Shock’ Study: Each $1 Minimum Wage Hike Causes 4-10% Increase In Restaurant Failures
  • State Minimum Wage Hikes Already Passed Into Law Expected To Cost 2.6 Million Jobs, New Study Finds
  • Dear Bernie, Meet the “Big Mac ATM” That Will Replace All Of Your $15 Per Hour Fast Food Workers

  Of course, given that Democrats don’t control a single branch of the federal government at the moment, and the socialist party has never controlled a single branch to the best of our recollection, we’re going to go out on a limb and guess that Bernie’s bill won’t get passed anytime in the immediate future.  That said, at least he’s one step closer to getting a bunch of fast food workers fired, and we’re sure they really appreciate all his hard work. 

  

  

  

• Government Shutdown Averted? Trump Punts On Border Wall, Will Wait Until September

  In what may the flip-flop that resonates the most among his core voter base, Trump said that contrary to recent reports that the White House demands funding for Trump’s proposed wall along the Mexican border be part of the spending bill – which has become a wildcard whether the government is shut on Friday night or not – Trump said on Monday that he is “open to waiting until later this year” to secure funding for said wall, a flop that would clear the way for Congress to strike a deal to avoid a government shutdown on Saturday, the WSJ reported.

  On funding the border wall, Trump said he could get it this week or the administration could come back to it in September.

  — Trey Yingst (@TreyYingst) April 24, 2017

  //platform.twitter.com/widgets.js

  As recently as Monday morning, top administration officials had indicated the president wanted to include money to begin building a wall along the Southern border in the bill needed this week to keep the government running after its current funding expires at 12:01 a.m. Saturday, which is also the president’s 100th day in office.

  However, during a reception with conservative media at the White House on Monday night, when Trump also unveiled the 20% tariff on Canadian softwood lumber, the president addressed the issue and indicated his willingness to wait and “flexibility” whether the wall is funded in this spending bill or one that will be needed in late September.

  Trump punting on the issue of wall funding will remove one of the last remaining hurdles facing congressional Democrats and Republicans hammering out the five-month bill they must pass this week to avoid a partial government shutdown.

  And with the debate over the border wall effectively over for the time being, lawmakers should now be able to come to an agreement on the spending bill relatively quickly. Both Democrats and Republicans had signaled they were willing to increase money for the military and for broader border security before administration officials last week indicated that Mr. Trump would press for money to begin building the wall.

  While there had been little appetite among Republicans on Capitol Hill to demand funding now for the border wall specifically, rather than offer a general boost for tighter border security, the big winners will be Democrats, whose votes will be needed to pass the spending legislation in the Senate; they had made it clear they would oppose a spending bill that included money to start building the border wall.

  To be sure, Schumer was delighted:

  “It’s good for the country that President Trump is taking the wall off the table in these negotiations,” Senate Minority Leader Chuck Schumer (D., N.Y.) said in a statement Monday night. Earlier Monday, Mr. Schumer had said the wall was a “nonstarter” for Democrats. “Now the bipartisan and bicameral negotiators can continue working on the outstanding issues,” he said.

  Democratic votes will be needed, because Republicans hold just 52 seats in the Senate, where spending bills need 60 votes to clear procedural hurdles. House GOP leaders will also likely have to rely on some Democratic help, since some conservative Republicans are expected to oppose it.

  Republicans will also be content: many members of the GOP had indicated they would be satisfied with a spending bill that included money for means of strengthening security along the border other than a wall. “Border security’s the main issue—whether that includes a wall or technology, drones, or repairing what we have,” Sen. Shelley Moore Capito (R., W.Va.) said Monday evening. Ms. Capito said she wasn’t interested in risking a shutdown over the border wall.

  “I’m not going to risk a shutdown over anything,” she said.

  Other Republicans echoed that their top priority was making sure they crafted a spending bill that could clear both chambers before the government runs out of money. “I wouldn’t mind funding the wall, but it’s a question of what we can do up here, what’s doable,” said Sen. Richard Shelby (R., Ala.), a senior member of the Senate Appropriations Committee.

  Indeed, it seems that almost everyone is a winner except those Americans who actually believed Trump would “build that wall” as he promised on virtually every stop of his campaign tour.

  Well, there is hope: he may still do it in late September. However, since the tensions between Democrats, Republicans and Trump will be the same, if not worse then making an agreement even more unlikely, please don’t hold your breath.

  

  

• The Geopolitics Of Nuclear Weapons Explained (In 3 Simple Maps)

  Authored by George Friedman, Xander Snyder, and Chyenne Ligon via MauldinEconomics.com,

  Nuclear bombs have a strange quality: They are a type of weapon that countries spend enormous sums of money to develop but don’t actually intend to use. While chemical weapons have been frequently used in war, no country has detonated a nuclear bomb since the end of World War II.

  Nuclear weapons are in their own category. Their efficacy comes from their ability to deter aggression, as the potential for massive devastation forces countries to rethink moves that threaten an adversary’s essential national security interests. States, therefore, are unlikely to use nuclear weapons against one another. However, the risk of a nuclear attack would increase if they were to fall into the hands of non-state actors that follow a different set of calculations that don’t necessarily take into account the defense of a predefined territory.

  Nine countries currently have nuclear weapons with an assortment of delivery systems. The following graphics outline which countries possess or have possessed nuclear weapons, as well as some states capable of producing them. They also show how these weapons have reshaped the constraints that countries face in their geopolitical calculations.

  Current Nuclear Powers

  

  This map highlights three aspects of the global nuclear arsenal.

  The first is a distinction between deployed and reserve weapons. Deployed nuclear weapons are already attached to a delivery system and ready to use. Warheads in reserve still require this final attachment step before they can be delivered.

   

  The second aspect is the three delivery systems that comprise the nuclear “triad”: land-based missiles (usually ballistic missiles but sometimes also cruise missiles), submarine-launched missiles (SLBMs), and weapons carried by aircraft (usually bombers but sometimes air-to-surface cruise missiles loaded on fighters or fighter-bombers). Land-based ballistic missiles—especially intercontinental ballistic missiles (ICBM)—provide long-range strike capability within a short period. SLBMs have retaliation capabilities in the event that a country’s land-based ballistic missile arsenal is destroyed in a first strike. Warheads on aircraft are more flexible, since bombers can be recalled after a strike has been ordered, but they are slower to reach their target than missiles (except in the case where bombers are already in flight and their target is nearby). Each nuclear country has a different mix of delivery capabilities, but only the United States and Russia are known to definitively possess a full triad, while China and India are suspected to have it.

   

  The third aspect is the large portion of global nuclear arms held by the United States and Russia. Currently, the US has approximately 4,480 warheads, and Russia has 4,500. These figures include both strategic warheads (which are meant to strike sites located far from any hypothetical battlefield) and nonstrategic, or tactical, warheads  (which are intended to be used near a battlefield, and as a result, are usually less powerful). The size of these arsenals, however, pales in comparison to each country’s peak inventory during the Cold War: The US had 31,255 in 1967, and the Soviet Union had 40,159 in 1986.

  Throughout the Cold War, the doctrine of mutually assured destruction required a sufficiently large force that would allow for a massive retaliation even if a first strike eliminated a large portion of a country’s nuclear arsenal. Additionally, during most of the Cold War, delivery systems were not particularly accurate, which required that nuclear weapons have very large yields to reliably strike a target that might be located miles away from the point of detonation (many hydrogen bombs were in the several megaton range). As the accuracy of delivery systems improved, fewer nuclear warheads were required to maintain a credible deterrence threat, leading to a decline in both countries’ arsenals.

  Nuclear weapons fundamentally alter the relations between countries because each country is forced to think more pointedly about its adversaries’ security imperatives. Developing a strong understanding of those imperatives is critical to avoiding a nuclear retaliation. While several “hot” wars and other tense moments occurred during the Cold War, none escalated to a direct confrontation between the Soviet Union and the US.

  For a more recent example, consider the case of North Korea, which has received a lot of attention in the last week due to a recent missile test and the expectation of another nuclear test. It is a poor country whose nuclear program has allowed it to punch above its weight internationally and force superpowers to approach it with great caution. North Korea’s deterrent capability would be eliminated the moment it uses a nuclear weapon, which would be akin to committing certain suicide. While many fear the irrationality of North Korea’s leadership, Geopolitical Futures’ current understanding of the regime is that it has persisted for decades throughout the Cold War and after the fall of the Soviet Union because it is able to make cautious calculations and has continued to choose not to inflict destruction on itself.

  Former Nuclear States

  

  Note: While Iran appears to have discontinued its nuclear program in accordance with the Joint Comprehensive Plan of Action, we chose to include it in the third map to discuss the geopolitical ramifications of an Iranian nuclear breakout.

  Several countries had nuclear weapons or weapons programs that were subsequently abandoned. Three factors contributed to these forfeitures: changes in geopolitical circumstances that decreased the need for nuclear deterrence, pressure from a major power that provided a guarantee under its own nuclear umbrella, and outside intervention that resulted in destruction of the weapons programs.

  Belarus, Kazakhstan, and Ukraine all inherited nuclear weapons when the Soviet Union collapsed in 1991. Belarus was left in possession of 81 warheads and an assortment of nonstrategic nuclear weapons. Kazakhstan had 1,410 nuclear-tipped missiles. Ukraine was left with 1,900 strategic warheads and between 2,650 and 4,200 nonstrategic nuclear weapons, making it the third-largest nuclear arsenal in the world. All three countries signed the Nuclear Non-Proliferation Treaty (NPT) and returned the weapons to Russia by the mid-1990s to be dismantled.

  South Africa is the only country that independently developed its nuclear weapons and subsequently forfeited them. The pro-apartheid government pursued nuclear energy and weapons development from the 1960s to the ’80s, eventually producing six nuclear weapons. In 1989, the program was stopped as apartheid came to an end and the government of F.W. de Klerk handed power over to the African National Congress. The weapons and associated facilities were dismantled, and South Africa signed the NPT in 1991.

  Two developments influenced South Africa’s decision. A 1988 agreement between Cuba, Angola, and the US resulted in the withdrawal of 50,000 Cuban troops that had been stationed in Angola during the Cold War and supported by the Soviet Union. The risk of Soviet intervention posed by these troops in the ’70s was one of the main reasons South Africa developed nuclear capability in the first place. Second, South Africa weighed the costs and benefits of joining the NPT and realized that improved relations with the world more than offset the decreasing deterrent utility from the bomb since the Cuban forces had been withdrawn and the Soviet Union no longer posed a threat.

  Argentina and Brazil are two of the seven other countries that abandoned their nuclear programs before acquiring nuclear weapons. They both secretly pursued nuclear weapons capability beginning in the late ’60s to early ’70s. By the early ’90s, both countries had given up their weapons programs and signed the NPT.

  South Korea and Taiwan had secret nuclear programs in the ’70s that were discovered by international intelligence. Both programs were subsequently disbanded—South Korea’s in 1975 when it signed the NPT, and Taiwan’s in 1988 as a result of diplomatic pressure from the US.

  In the Middle East and North Africa, Iraq, Syria, and Libya all had active nuclear weapons programs. Iraq’s nuclear program was forcibly dismantled after the Gulf War, and Libya voluntarily gave up its secret nuclear program in 2003 under the direction of Moammar Gadhafi. Syria’s nuclear ambitions never progressed as far as those of its neighbors, but it is believed to have possessed enriched uranium and built a research reactor with the aid of North Korea. In 2007, Israeli airstrikes took out Syria’s reactor, suspending the nuclear program indefinitely.

  Nuclear Latency

  

  When a country does not currently have nuclear weapons but has a peaceful nuclear program that could be used to produce nuclear weapons, it is said to be in a state of “nuclear latency.” To build a nuclear weapon, a country must have technical knowledge and capabilities, access to materials, and a well-developed industrial sector. Of the 31 countries that possess nuclear power plants, we have identified five important countries for which the acquisition of nuclear weapons would radically impact relations with both their regional neighbors and global powers. These countries have both the technological and economic resources to develop nuclear weapons and are likely to play pivotal roles in major geopolitical events within the next decade. 

  Iran’s nuclear ambitions led to intense negotiations with the West. In 2015, the negotiations resulted in the signing of the Joint Comprehensive Plan of Action (JCPOA), which saw Iran shelve its nuclear program for a set period of time in exchange for benefits including sanctions relief. However, if Iran were to continue enriching uranium in secret and develop a nuclear weapon despite the JCPOA, it would alter the balance of power in the region. Iran would have a new, asymmetric power relative to its Sunni rivals and force Israel to reconsider strategies that incorporate pre-emptive strikes.

  Japan has large stockpiles of plutonium from civilian uses and already possesses uranium enrichment and plutonium reprocessing technologies. Estimates of Japan’s breakout time range from six months to several years. Japan’s alliance with the United States has thus far deterred it from developing nuclear weapons because it knows it can rely on the US for defense. However, North Korea’s progress in its nuclear program could drive Japan to reconsider. A nuclear Japan would threaten China’s desired hegemony in the region and force it to proceed with greater caution in its actions in the South China and East China seas.

  South Korea and Taiwan have advanced civilian nuclear programs and technical knowledge that could be redirected into a weapons program. They also have the need to defend against regional threats. As North Korea appears to move closer to possessing a deliverable nuclear warhead, the South Korean government has debated acquiring a nuclear weapon. Taiwan is in a similar position. Its sovereignty is threatened by mainland China, which possesses nuclear weapons. Taiwan could consider developing a nuclear weapon to discourage Chinese aspirations to fully reclaim the island. South Korea and Taiwan are concerned about escalation, however, so instead choose to rely on the nuclear guarantee provided by their alliance with the US.

  On the other side of the world is Germany. Germany is a highly industrialized state with civilian nuclear capabilities. It is currently protected under the NATO nuclear umbrella by the US and the European nuclear powers (France and the United Kingdom). It also is bound by international treaty not to pursue weapons development. However, it is not inconceivable that Germany would consider developing nuclear weapons to deter Russian aggression if it questioned America’s commitment.

  Conclusion

  Every country has a red line, past which its security imperatives will be threatened and it will be compelled to respond with force. Without a sufficient deterrent, potential adversaries incur less risk when they test where exactly that line is. Introducing nuclear weapons into these calculations, however, forces the aggressor to proceed with caution because the risk of massive retaliation is great. This is a difficult balance to strike when the addition of nuclear weapons by one party is itself the act that breaches the security imperatives of the other.

  The world’s eyes are now set on North Korea for this reason: The United States is in the process of deciding whether recent developments in North Korea’s nuclear program have crossed this boundary and, if they have, what force constitutes an appropriate response. Though the US is not directly threatened by North Korea’s nuclear weapons (based on the current understanding of its ballistic missile technology), the safety of its allies would be jeopardized by a North Korean bomb. British and French fears that the US would not make good on its nuclear guarantee led to proliferation in Europe. Similarly, if the US’s Asian allies question the credibility of its guarantee, the risk of nuclear proliferation in the region will grow.

  

  

• Canadians Get "A Little Mad" As Refugees Continue To Flood In From U.S.

  Just over a month ago we highlighted the comments of one recently deported Mexican nationalist who told Reuters that illegally immigrating to the U.S. was over, courtesy of the Trump administration, and that it was “Canada’s turn” to welcome the world’s immigrants with open arms.

  “For those without documents, I think (the United States) is over. Now it’s Canada’s turn.”

  And, with each passing month, new immigration stats from Canada seem to indicate that Reuters’ young border-hopper was a very prescient fellow indeed.  According to stats highlighted by the Financial Times today, “land border asylum claims” in Canada continue to skyrocket with Quebec crossings up nearly 3x YoY and crossings into Ontario surging as well.

  Meanwhile, the FT insists that the following propagandastory from a man named Abdi, a Somalian refugee who fled the U.S. out of fear of Trump, is typical of what’s driving the illegal and dangerous migrations north. 

  “Every time you see the TV, Trump is still talking about deportation, every time,” Abdi says, lounging on a steel-framed bed at a Salvation Army hostel in a gritty stretch of Winnipeg, the capital of Canada’s Manitoba province, where he has slept since sneaking across the border in March. “It scares me, it scares my friends, it scares everybody who is an immigrant living in the US.”

   

  As they gaze out of the window on to central Canada’s prairies, he and two other Somali men recount their journey. Abdi says that if he returns to Somalia, the fragile east African state ravaged by decades of civil war, he would be killed, which is why he slogged through waist-deep snow and -30C temperatures to get to Canada.

   

  “My country for me is fire . . . you see the fire, you run away. So I can’t return . . . but when you see [Trump] talking like that, you don’t feel free either,” he says.

  

   

  Of course, one day after Trump signed his first immigration executive order back in January (see “Trump Signs Executive Orders To Keep “Radical Islamic Terrorists” From Entering US, Rebuild US Military“), Canada’s ‘progressive’ Prime Minister Justin Trudeau sent the following tweet as an apparent jab at the new U.S. administration.

  #WelcomeToCanada pic.twitter.com/47edRsHLJ5

  — Justin Trudeau (@JustinTrudeau) January 28, 2017

  //platform.twitter.com/widgets.js

   

  And while ‘open borders’ sound super nice in a political speech, the practical reality is that the majority of Canadians, just like Americans, don’t approve of unfettered illegal border crossings that place a massive financial burden on taxpayers and are often accompanied by a surge in crime (see “Half Of Canadians Want Illegal Immigrants Deported“).

  Within Canada’s political arena, the issue is becoming hugely divisive, with many of the same debates and sentiments that have been so prevalent in the US. For Mr Trudeau, openness to refugees is a core conviction — part of the progressive image that his father, Pierre Trudeau, who led Canada for 15 years, is credited with shaping. Roland Paris, a former adviser to the younger Mr Trudeau, whose cabinet includes turban-wearing Sikhs and Muslims, says he is “unlikely to back down on this”.

   

  But Canadians are ambivalent about this type of irregular — some say illegal — migration. A recent poll by Reuters showed almost half of Canadians want these asylum seekers to be deported.

   

  Some opposition Conservative politicians have promised to deploy the military to close the border. With Mr Trudeau’s approval ratings at a low of 48 per cent, they sense an opportunity. While Canada has not been shaken by populist tremors in the same way as France or the US, anti-immigrant sentiments are moving into mainstream politics.

  

   

  Meanwhile, conservatives in Canada, taking a cue from the recent U.S. elections no doubt, have ratcheted up their nationalist rhetoric, with politicians threatening to enlist the army to fortify their border.

  “There are significant portions of the population that have expressed discomfort with these arrivals,” admits Mr Paris. “The [Conservative candidates] see this as a potential issue to run with.”

   

  In Emerson, opinion is divided. Some residents spoke of plans to assimilate the Somali families permanently in a town where there is little unemployment and farmers are often in need of help. “We have the space in Canada. It’s not like Europe where you have people on top of each other,” says Mr Janzen, the mayor.

   

  But there is also tension in the town of 678 people. “Canada can’t take care of the whole world and it seems lately like that’s the way it is,” says Wayne Turton, who owns a car repair shop in Emerson. “It makes you a little cranky . . . it makes us a little mad.”

  First it was just Trump supporters, but now it’s looking increasingly likely that France and Canada are also filled with a bunch of racist people intent upon protecting their ‘arbitrary’ borders.

  

  

Digest powered by RSS Digest

• Ukraine, Korea, Syria, Iran… Falsifying History Is Uncle Sam's Way To War

  Authored by Finian Cunningham via The Strategic Culture Foundation,

  

  Russian President Vladimir Putin addressed the International Arctic Forum this week on the real and present dangers from falsifying history. He said such deliberate distortion of history erodes international law and order, creating chaos and leading to further conflict.

  The Russian leader deplored the use of history as an «ideological weapon» to demonize others, and he said that without proper understanding of history we are bound to repeat mistakes of the past.

  That also reminds one of the maxim Karl Marx once wrote: «History repeats itself first as tragedy, then as farce».

  As if on cue, while Putin was enumerating the dangers of false history, Ukraine’s President Petro Poroshenko was being hosted in London by British premier Theresa May during a two-day visit.

  The Kiev-based regime that Poroshenko leads came to power through an illegal, violent coup against an elected government in February 2014, with clandestine support from Washington and the European Union. The Ukrainian state military ever since have been waging a war on the eastern region of the country, resulting in a death toll of over 10,000 and up to a million displaced. All because the ethnic Russian population of the eastern Donbas region refuses to recognize the Kiev regime’s legitimacy owing to its illegal power grab three years ago.

  However, the way Poroshenko and the Kiev regime tells it, Ukraine is fighting off an invasion by Russia. The Ukrainian president’s falsification of history was dignified by his British host who dutifully nodded along as Poroshenko claimed that his country was a bulwark of Europe’s defense against Russian invasion.

  «This is not Ukraine’s struggle, it is Europe’s struggle. Sanctions and the resistance of the Ukrainian army are the only reason why Russian tanks are not much further in Europe», said Poroshenko whose asinine version of history received tacit British approval.

  Inadvertently, Poroshenko can be seen as confirming the perils of historical defamation that Putin was warning of.

  Falsifying recent and contemporary events in Ukraine might be a useful expedient for drumming up Western financial and military support for the corrupt and shaky Kiev regime; such blatant propagandizing of history may also be a useful expedient for expanding US-led NATO military power, with all the lucrative weapons contracts that it entails for Western governments. But such a misrepresentation of events ultimately serves to fuel unnecessary conflict, as Putin remarked. Such a flagrant misrepresentation is itself arguably a criminal act of engendering war.

  Ukraine is but one instance. The dangers from distorting, suppressing, or falsifying history are all too abundant in recent international developments.

  This week, US vice president Mike Pence was again threatening North Korea with war and annihilation, saying that the American «sword was drawn» to «protect the freedom» of its Japanese and South Korean allies. Pence made grossly distorted references to the 1950-53 Korean War, portraying it as a struggle between American-backed «good» and Communist-backed «evil».

  Maybe if Washington were to acknowledge the horrendous legacy of war crimes it committed during the Korean War, resulting in over three million civilians being slaughtered from American carpet bombing, then there might be an opportunity for a frank and creative dialogue for resolving the ongoing conflict on the Korean Peninsula. As it is, American self-serving, delusional rhetoric about Korean history only serves to compound tensions and further conflict. Which tends to belie the real purpose of Washington’s falsification of history here.

  Likewise, Washington persists in claiming that its missile strikes on Syria earlier this month are a «righteous» demonstration of military power which will be used against any nation it deems to be in violation of international law, citing the chemical weapons incident in Syria on April 4. The US and its allies allege, with minimal evidence, that the incident was carried out by the Syrian government forces deploying poisonous sarin gas.

  Again, this is blatant falsification of history which the US, British and French governments have indulged in, along with the UN-affiliated Organization for the Prohibition of Chemical Weapons. All these claims are made in unseemly haste without an impartial on-site investigation into the alleged chemical weapons incident in Khan Sheikhoun, Idlib Province. But nevertheless the dubious claims are invoked as «just cause» for further missile strikes on Syria by the Trump administration only three days later, when in fact those strikes could very well be condemned as illegal aggression and a criminal act of war against a sovereign country.

  An even closer, more disturbing peeling back of the falsification of history on Syria would reveal that the so-called White Helmets «rescue group» and the illegally armed militants to whom they are closely aligned and serve as the media agents for, are all sponsored by American, British and French military intelligence. This is why Russia, Iran and Syria are demanding a full, impartial investigation into the latest chemical weapons incident. Because there are strong suspicions that the incident was a propaganda stunt staged by the Western-backed militants, precisely in order to create a pretext for subsequent US military attack on Syria.

  This one particular scenario is perfectly consistent with the wider narrative that the whole Syrian war, beginning in March 2011, was from the outset a Western covert operation for regime change. The regime-change objective was to oust the government of President Bashar al Assad, a strategic ally of Russia, Iran and Hezbollah, and a staunch opponent of Western imperialist intrigues in the oil-rich Middle East region. Archived US documents, kept deliberately away from public discourse by state and media authorities, show that Western-backed regime-change in Syria has been on the agenda of the American CIA and British MI6 going back several decades.

  Falsifying history in Syria on the short and long term is a key way for the Western powers to keep pushing their unlawful agenda of conflict and regime change – an agenda that fully depends on Western powers sponsoring terrorist proxy groups to do their dirty work. Just as these same powers did before in Afghanistan, Iraq, Libya and many other countries around the world, such as with paramilitary death squads in Central and South America.

  As President Vladimir Putin alluded to in his address this week, this falsification of history explains why the war in Syria keeps grinding on, seemingly without end. Not just in Syria, but in Korea and Ukraine too, among other conflict zones.

  Speaking of other conflict zones, this week US defense secretary General James Mattis provocatively accused Iran – yet again – of being the «world’s leading sponsor of terrorism». Mattis was speaking these words of American «wisdom» while in Saudi Arabia! Only a person with such a thoroughly falsified notion of CIA-sponsored terrorism against Iran (the coup of 1953 and much more besides) as well as falsified understanding of US-backed Saudi despotism could make such an absurd claim as Mattis did, and thus fueling tensions of further war in such a volatile region.

  If the Western public were fully informed of how the crises in Ukraine, Korea, Syria and Iran have been largely fomented by Western machinations then those conflicts would not continue as they are. Because the real causes of the conflicts would be widely exposed, showing Western government culpability, in particular Washington’s.

  And then, if justice were to prevail, those Western politicians and news media outlets who have been responsible for obscuring, distorting and thereby fueling these conflicts would finally be held to account.

  

  

• Paul Craig Roberts Asks "If This Is Freedom And Democracy, What Is Tyranny?"

  Authored by Paul Craig Roberts,

  

  “Our problem is civil obedience. Our problem is the numbers of people all over the world who have obeyed the dictates of the leaders of their government and have gone to war, and millions have been killed because of this obedience… Our problem is that people are obedient all over the world, in the face of poverty and starvation and stupidity, and war and cruelty. Our problem is that people are obedient while the jails are full of petty thieves, and all the while the grand thieves are running the country. That’s our problem… people are obedient, all these herdlike people.” — Howard Zinn

  If truth be known, Americans are no more free than were Germans under Gestapo Germany. “Freedom and Democracy America” is the greatest lie in the world.

  Countries sink into tyranny easily. Those born today don’t know the freedom of the past and are unaware of what has been taken away. Some American blacks might think that finally after a long civil rights struggle they have gained freedom. But the civil rights that they gained have been taken away from all of us by the “war on terror.” Today black Americans are gratuitously shot down in the streets by police in ways that are worse than in Jim Crow days.

  American women might think that finally they have gained equality, and they have—the equality to be abused by police just like men. As John Whitehead reports, women are forced by police to strip naked, often in public, and have their viginas explored as part of a “drug search.” When I was a young man, society would not have tolerated any such intrusion on a woman. The officer and police chief would have been fired and if not prosecuted for rape, would have been beat into bloody pulps by the enraged men.

  Tryanny was brought to Americans intentionally by their government. Perhaps it began in 1992 with the unaccountable use of police power against an American family at Ruby Ridge. Randy Weaver’s 12 or 13 year old son was shot in the back and murdered by federal marshalls. Then his wife was murdered with a shot through her throat while she stood at the door of her home holding a baby in her arms. There was no justification for this gratuitous violence against a peaceful American family, and the federal marshalls who murdered were not held accountable. The Congress, “the people’s representatives” held a hearing, and those responsible for murdering a family told the representatives that they had “to trust the police”.

  A year later, 1993, the Clinton regime murdered, using poison gas as well as gun fire, more than 100 members of the Branch Davidian religious sect in Waco, Texas.

  Women and children comprised most of the victims of “freedom and democracy America.” The Branch Davidians had done nothing except be different. They were a threat to no one. But the Clinton criminal government knew that it could portray the Branch Davidians, as they were different, in unfavorable lights. They were said to be in possession of, and perhaps manufacturing, illegal machine guns. They were said to be having sex with underage girls in their collective.

  When the Branch Davidian compound was attacked by a tank spewing chemical warfare and then burnt to the ground, insouciant Americans were told that justice had been done to child abusers. No one objected that the same “justice” had also been done to the allegedly abused children.

  Again the “representatives of the people” held a hearing. The result was that the Clinton criminal regime and Janet Reno got approval for dealing effectively with those who violate gun laws.

  Ruby Ridge and Waco established the precedents that the US government could murder large numbers of Americans, and at Waco some foreigners, without consequence. The “representatives of the people” accepted the executive branch’s lies in order to avoid having to hold the executive branch accountable for what were clearly without any doubt capital crimes against American citizens for which the federal perpetrators of these crimes should have been tried and executed.

  These two instances established the precedent that the US government could murder US citizens at will.

  The next step was to take away the constitutional and legal protections of citizens that are in the Bill of Rights, the amendments to the US Constitution, and are, or were, institutionalized in legal practices.

  The false flag attack of September 11, 2001, was the instrument for deep-sixing the bill of rights. The George W. Bush regime made us “safe” by taking away our civil liberties. Habeas corpus, the foundation of liberty, was destroyed by the executive branch’s assertion that the President on his sole authority, the US Constitution notwithstanding, can detain US citizens indefinitely without evidence, without going before a court, without any accountability to law whatsoever.

  The Obama regime not only endorsed this murder of the US Constitution, “American’s First Black President” even went further. Obama declared that he had the power to sit in his office and write down names of US citizens whom he could murder at his will without acountability.

  Congress did not object. The Supreme Court did not object. The American media did not object. The law schools and bar associations did not object. The Republican Party did not object. The Democratic Party did not object. The American people did not object. Washington’s allies in Europe, Japan, Australia, New Zealand, and Canada did not object. The Christian churches did not object.

  I objected, and a few others like me, such as John Whitehead.

  9/11 clearly, without any doubt, destroyed American liberty. Even if you are so brainwashed as to believe an obviously false story of the event, even if you believe that a few Saudi Arabians without government or intelligence service support outwitted all 16 US intelligence agencies, the National Security Council, all intelligence agencies of Washington’s vassals abroad, outwitted Israel’s Mossad, US Air Traffic Control, caused US Airport Security to fail four times in one hour on the same day, and prevented for the first time in history the US Air Force from sending fighters to intercept off course airliners, the fact remains the same: the US government used 9/11 to destroy the constitutional protections of US liberty.

  The raw, ugly, but true fact that “our” government has destroyed American liberty is the reason that everyone of us is subject to experiencing the abuses that John Whitehead describes below.

  Who will be next? You? Me? Your Wife? Your Son? Your daughter? Your aged and infirm parents?

  When it happens, it was the American people who permitted it.

  

  

• Chinese Stocks Are Plunging

  Despite a liquidity injection and the rest of the world in 'risk-on' mode over the French election results, Chinese markets are tumbling…

  On Friday, we asked "Is China Trying To (Slowly) Burst Another Stock Market Bubble?" as Chinese monetray conditions were tightening dramatically…

  

  And, as Bloomberg reports, it seems the catalyst is further crackdowns on shadow-banking.

  China’s banking regulator, which said late Friday it will focus on guarding against financial risks, has ordered local units to assess cross-guaranteed loans, according to a Caixin report.

  Having gone 86 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992…

  

  It seems they might be… (or The National Team is going to have to work very hard today)…

  

   

  As Shanghai Composite breaks below ist 200-day moving-average withe the biggest intraday drop since Dec 12th…

  

   

  CHINEXT (China's Nasdaq) is also getting hammered – testing its lowest levels since February 2015….

  

  

  

• Trump: If The DOJ Wants To Arrest Assange, "It's OK With Me"

  Having selected several key excerpts from Donald Trump’s lengthy AP interview earlier, we urge readers looking for fascinating yet surreal bedtime reading to give the full, nearly 8,000 word transcript a try, as it contains bizarro excerpts such as this:

  AP: You did put out though, as a candidate, you put out a 100-day plan. Do you feel like you should be held accountable to that plan?

   

  TRUMP: Somebody, yeah, somebody put out the concept of a hundred-day plan. But yeah. Well, I’m mostly there on most items. Go over the items, and I’ll talk to you … (Crosstalk.)

   

  TRUMP: But things change. There has to be flexibility. Let me give you an example. President Xi, we have a, like, a really great relationship. For me to call him a currency manipulator and then say, “By the way, I’d like you to solve the North Korean problem,” doesn’t work. So you have to have a certain flexibility, Number One. Number Two, from the time I took office till now, you know, it’s a very exact thing. It’s not like generalities. Do you want a Coke or anything?

   

  AP: I’m OK, thank you. No. …

  Yet what caught our attention was the following excerpt on a topic that has re-emerged in recent days in the aftermath of the spat between Julian Assange and the new CIA chief Mike Pompeo, who last week made it clear Assange’s days as a quasi-free man are numbered. And, as the following exchange between the AP and Trump notes, the president does not harbor any partcularly fond feelings for the man who has been accused of being a Russian plant or spy and crushing Hillary Clinton’s election chances. That, and so much more in the following bizarre exchange:

  AP: Jeff Sessions, your attorney general, is taking a tougher line suddenly on Julian Assange, saying that arresting him is a priority. You were supportive of what WikiLeaks was doing during the campaign with the release of the Clinton emails. Do you think that arresting Assange is a priority for the United States?

   

  TRUMP: When Wikileaks came out … never heard of Wikileaks, never heard of it. When Wikileaks came out, all I was just saying is, “Well, look at all this information here, this is pretty good stuff.” You know, they tried to hack the Republican, the RNC, but we had good defenses. They didn’t have defenses, which is pretty bad management. But we had good defenses, they tried to hack both of them. They weren’t able to get through to Republicans. No, I found it very interesting when I read this stuff and I said, “Wow.” It was just a figure of speech. I said, “Well, look at this. It’s good reading.”

   

  AP: But that didn’t mean that you supported what Assange is doing?

   

  TRUMP: No, I don’t support or unsupport. It was just information. They shouldn’t have allowed it to get out. If they had the proper defensive devices on their internet, you know, equipment, they wouldn’t even allow the FBI. How about this — they get hacked, and the FBI goes to see them, and they won’t let the FBI see their server. But do you understand, nobody ever writes it. Why wouldn’t (former Hillary Clinton campaign chairman John) Podesta and Hillary Clinton allow the FBI to see the server? They brought in another company that I hear is Ukrainian-based.

   

  AP: CrowdStrike? 

   

  TRUMP: That’s what I heard. I heard it’s owned by a very rich Ukrainian, that’s what I heard. But they brought in another company to investigate the server. Why didn’t they allow the FBI in to investigate the server? I mean, there is so many things that nobody writes about. It’s incredible. 

   

  AP: Can I just ask you, though — do you believe it is a priority for the United States, or it should be a priority, to arrest Julian Assange? 

   

  TRUMP: I am not involved in that decision, but if Jeff Sessions wants to do it, it’s OK with me. I didn’t know about that decision, but if they want to do it, it’s OK with me.

  And while Trump may somehow not know about the DOJ’s decision to arrest Assange, we are confident he knows that any potential pardon of Assange is long gone. As for Donald Trump “loving” Wikileaks, that was so six months ago.

  

  

• These Are The Tallest Buildings In Each State

  One of the most interesting things about skyscrapers and high-rises is their competitive aspects.

  The Empire State Building, The Burj Khalifa, and other tall buildings were built, in part, to say to the rest of the world: “Look what we can do!”

  There hasn’t just been competition between countries, either – there has been some competition within the United States too! 

  In this infographic, we take a look at the tallest buildings of each state. How tall would a state stand, based on its tallest building?  Which states have the most high-rise buildings?  What are most skyscrapers used for? 

  
  Source: Highrises.com

  

  

• Key Events In The Coming Busy Week: US GDP; ECB & BOJ Meetings, And Lots Of Earnings

  The key economic releases this week are the durable goods report on Thursday and Q1 GDP on Friday.  It iweek is the busiest week of earnings season, with 40%  of S&P 500 equity cap reporting. In addition, there are a few scheduled speaking engagements by Fed officials this week. 

  Further, as SocGen notes, this week, markets will digest the French election results, with data releases focusing on the strength of the euro area recovery. The ECB may signal upside risks to near-term growth ahead of higher core inflation on Friday. EU leaders will meet to adopt Brexit negotiation guidelines. In the US, softer 1Q GDP data will be scrutinized, while rising inflation in the UK may have a longer term impact on growth. In Asia, GDP data should be boosted by net exports while the BoJ may upgrade it economic assessment.

  United States: Q1 GDP likely to show weak growth

  This week, consensus expects broadly unchanged new home sales as well as subdued business investment (ex aircraft orders). Most of the focus will be on Friday’s Q1 GDP where the Atlanta Fed expects growth to tumble to just 0.5%. Still, the Fed (and markets) is used to softness in Q1 growth that at least in the past has snapped back in the second half. Lastly, a one- or two-week bill looks likely to keep the government open past the Friday deadline, giving Congress a bit more time to work on a longer-term deal.

  Euro area: ECB to acknowledge upside risks to near-term growth.

  While markets will digest the French election results, the ECB will likely acknowledge upside risks to growth in 1H on Thursday while remaining on hold. Both headline and core inflation should recover by two-tenths on Friday, while the first 1Q GDP estimates for France (0.2% qoq) and Spain (0.7%) will give an early indication for the euro area (next Wednesday). Both the EC confidence indicators and the German Ifo will probably moderate but are expected to remain high. A special summit of EU-27 leaders (Saturday) will set the guidelines for the EU in the upcoming negotiations with the UK.

  Asia Pacific: Solid 1Q GDP gains in Korea and Taiwan; BoJ may upgrade assessment

  First quarter GDP data from South Korea and Taiwan are likely to have been boosted by net trade, as suggested by the strong external trade recovery across the region. The BoJ is widely expected to maintain its current policy stance and make no meaningful changes to its economic forecasts, but may upgrade its assessment of the economy. In Australia, annual rates of headline and core inflation are likely to have moved up, but not quite into target.

  

  JPM lays out the Calendar of events to watch for in the week of Mon Apr 24

  • The big focus this week will be on earnings (the week of 4/24 is the peak of the CQ1 season), central banks (decisions from the BOJ and ECB), Eurozone eco data (Eurozone Arp CPI on Friday 4/28), US eco data (Q1 US GDP and ECI both hit Fri 4/28), and US gov’t funding (legislation to fund the gov’t expires on Apr 28 – a shutdown is considered unlikely).
  • Calendar for Mon Apr 24 – the main focus on Mon will be earnings (HAL, HAS, ITW KMB, LII, and TCB pre-open and AA, AMP, CCI, CDNS, CR, ESRX, NEM, RE, RMBS, RRC, SANM, TMUS, UDR, WHR, WNC, WRB, and ZION after the close). 
  • Calendar for Tues Apr 25 – the main focus will be on US FHFA/Case-Shiller home prices for Feb (9amET), US new home sales for Mar (10amET), US conf. board confidence figures for Apr (10amET), and earnings (AKS, AN, BHI, BIIB, CAT, CIT, CNC, DD, Ericsson, FCX, FITB, GLW, KO, LH, LLY, LMT, MAS, MCD, MMM, NLSN, Novartis, NTRS, OI, PCAR, PHM, PNR, R, SAP, SPGI, ST, TROW, TRU, TUP, VLO, WAT, WSO, and XRX pre-open and ARNC, BHP, BXP, CB, CENX, CHRW, CMG, COF, CREE, DFS, EQR, EW, ILMN, JNPR, SYK, T, TSS, TXN, UHS, and ULTI after the close).
  • Calendar for Wed Apr 26 – the main focus will be on earnings (ALK, ANTM, APH, AVY, BA, BAX, Credit Suisse, Daimler, DPS, GD, HES, HSY, IR, NDAQ, NSC, PEP, PG, ROK, Santander, Standard Chartered, STT, STX, TEL, TWTR, UTX, X, WRK, and WYN pre-open and AMGN, AVB, CAVM, EQIX, FFIV, FISV, KIM, MAA, NOW, NTGR, ORLY, PYPL, SAM, UNM, VAR, XL, and XLNX after the close).
  • Calendar for Thurs Apr 27 – the main focus will be on central banks (BOJ, Riksbank, and ECB decisions), China industrial profits for Mar (Wed night/Thurs morning), US advanced goods trade balance for Mar and durable goods for Mar (8:30amET), US pending home sales for Mar (10amET), the expiration of the FCC anti-collusion rules (related to the recent spectrum auction), Trump’s press conf., and earnings (ABBV, Airbus, ALLE, ALLY, AMT, APD, BASF, BMY, BSX, CBG, CELG, CMCSA, CME, Deutsche Bank, DOW, F, IP, IVZ, JCI, LAZ, LLL, LUV, MMC, MPC, Nokia, NOV, POT, PX, Roche, RS, SIRI, SPG, STM, UAA, UNP, UPS, USG, VC, WCC, and ZBH pre-open and AFL, AIV, AMZN, BIDU, CERN, ESS, EXPE, FLEX, FTNT, GOOGL, GPRO, HIG, INTC, KLAC, LPLA, MHK, MSFT, PFG, Samsung Electronics, SBUX, SWKS, SYNA, VRSN, VRTX, and WDC after the close).
  • Calendar for Fri Apr 28 – the main focus will be on Eurozone eco data (including Eurozone Apr CPI at 5amET), US Q1 GDP and ECI (8:30amET), US Chicago PMI for Apr (9:45amET), Michigan Sentiment for Apr (10amET), and earnings (CL, CVX, GM, GT, HST, LYB, PSX, SYF, VFC, WY, and XOM pre-open).

  Global Economics Calendar: Week of Mon April 24th, also via JPM

  • Monday, April 24th: US (Chicago./Dallas Fed Indices); Eurozone (Germany IFO Current Assessment, UK CBI Business Optimism); Other (Taiwan Unemployment Rate, Japan Leading/Coincident Index, Taiwan Industrial production, Taiwan Money Supply, China Conference Board China March Leading Economic Index, Japan PPI Services)
  • Tuesday, April 25th: US (FHFA House Price Index, S&P/CoreLogic 20-City HPI, New Home Sales, Conference Board Consumer Confidence Index, Richmond Fed); Eurozone (France Business Confidence, Spain PPI, ECB Bank Lending Survey, UK Public Finances, Euro Area Fourth Quarter Government Debt); Other (Hong Kong Trade Balance)
  • Wednesday, April 26th: US (MBA Mortgage Applications); Eurozone (France Consumer Confidence, Spain Total Mortgage Lending, France Jobseekers); Other (Japan All Industry Activity Index, Japan Machine Tool Orders, Japan Buying/Selling Foreign Stocks/Bonds, China Swift Global Payments, China Industrial Profits, BOJ 10-Yr Yield Target, BOJ Policy Balance Rate)
  • Thursday, April 27th: US (Advance Goods Trade Balance, Wholesale/Retail Inventories, Durable Goods Orders, Jobless Claims, Pending Home Sales, Kansas City Fed Manufacturing Activity Index); Eurozone (Germany GfK Consumer Confidence, Spain Unemployment Rate, Spain CPI, Germany CPI, Italy Economic Sentiment, Eurozone Economic Confidence, ECB Main Refinancing Rate, ECB Asset Purchase Target, UK GfK Consumer Confidence, Spain Budget Balance); Other (Taiwan Monitoring Indicator, Taiwan Bounced Check Ratio, Japan Jobless Rate, Japan National CPI, Japan Industrial Production, Japan Retail Sales)
  • Friday, April 28th: US (Employment Cost Index, GDP Annualized, Core PCE, Chicago PMI, University of Michigan Survey); Eurozone (France GDP, France CPI, Eurozone M3 Money Supply, Spain GDP, Spain Retail Sales, UK GDP, Eurozone CPI, Italy PPI, , UK Nationwide House Prices); Other (Japan Vehicle Production, Japan Housing Starts)

  A look at the upcoming busiest week of Q1 earning season:

  The CQ1 season isn’t even half over although several important companies posted numbers over the last 1.5 weeks.  As is the case with any given earnings period, the most “important” sectors from the perspective of the macro narrative are banks, semis, capital goods, and credit cards.  The US bank season is nearly over and numbers were pretty healthy, esp. relative to reduced expectations.  Loan growth wasn’t as bad as the weekly Fed data suggested, NII/NIM was inline-to-better, expenses and credit remain under control (there were some pockets of credit deterioration but nothing that suggests a broader systemic problem), and trading was healthy (the one notable exception was GS which badly lagged its peers in FICC; GS mgmt. didn’t sound concerned and cited the latter two letters, i.e. currencies and commodities, for the shortfall).  At the moment for bank stocks the direction of TSY yields (and the shape of the curve) is having a greater influence than earnings.  In semis only a handful of companies reported but the early results are solid, esp. semi equipment (ASML and LRCX).  MXIM’s report Thurs night was more controversial – the headline income statement figures were solid for Mar actuals and June guide but mgmt. on the call acknowledged some softness in the US auto market (although MXIM really wasn’t outright negative on autos and while SAAR is drifting lower the amount of silicon per unit continues to experience strong growth).  The initial indications from the capital goods companies w/DOV, GE, and HON all posting healthy organic growth (both revs and orders) while Eurozone reports were decent too (Schneider, ABB, etc.).  GE was controversial as very strong orders and income statement numbers were offset by very weak cash flow.  GWW was the one notable disappointment within the industrial space although the problem was competition/pricing (and not necessarily end-market demand).  The best sector for assessing the health of “the consumer” isn’t retail but instead the credit cards (the key is the amount of card swipes, not where those swipes are occurring) and numbers out of that group so far in CQ1 have been positive (w/upside reports out of AXP and V/Visa).  Other earnings highlights over the last week include CSX (solid Q and Hunter Harrison provided positive guidance), IBM (pretty weak all around w/soft revs and margin downside), EBAY (decent Q1 but weaker Q2 guide), NFLX (some noise w/Q1 subs light and better Q2 guide but the H1 numbers in aggregate were about inline), and VZ (the big focus was the very weak subscriber metrics; the sub results would have been even worse had VZ not unveiled its unlimited data plans in the middle of the Q).

  * * *

  Finally, a focus just on US events in the coming week, together with consensus and Goldman estimates

  Monday, April 24

  • 10:30 AM Dallas Fed manufacturing index, April (consensus +17.0, last +16.9)
  • 11:30 AM Minneapolis Fed President Kashkari (FOMC voter) speaks: Minneapolis Federal Reserve President Neel Kashkari will give the keynote speech at the 6th Annual Fink Investing Conference at UCLA in California. Audience Q&A is expected.
  • 03:15 PM Minneapolis Fed President Neel Kashkari (FOMC voter) speaks: Minneapolis Federal Reserve President Neel Kashkari will participate in a moderated discussion at Claremont McKenna College in Claremont. Audience Q&A is expected.

  Tuesday, April 25

  • 09:00 AM S&P/Case-Shiller 20-city home price index, February (GS +1.1%, consensus +0.7%, last +0.9%): We expect the S&P/Case-Shiller 20-city home price index to rise 1.1% in the February report following a 0.9% increase in the prior month. The measure still appears to be influenced by seasonal adjustment challenges, and we place more weight on the year-over-year increase, which rose to 5.7% from 5.5% in January.
  • 09:00 AM FHFA house price index, February (consensus +0.4%, last flat): Consensus expects the FHFA house price index to rise 0.4% (mom sa) in February, after a flat reading in January. The FHFA house price index has a wider geographic coverage than the S&P/Case-Shiller home price index, but is based only on properties financed with conforming mortgages. On a year-over-year basis, FHFA home prices rose 5.7% in January, down from 6.2% in December.
  • 10:00 AM New home sales, March (GS -2.0%, consensus -1.4%, last +6.1%): We expect new home sales to fall 2.0% in March, retracing some of its 6.1% February increase, as we expect the negative impact of Winter Storm Stella in the Midwest and Northeast to be partially offset by a favorable fundamental backdrop and an elevated level of single-family building permits.
  • 10:00 AM Conference Board consumer confidence, April (GS 121.0, consensus 123.0, last 125.6): We forecast that consumer confidence declined 4.6pt to 121.0 in April from the cycle high in March. Our forecast reflects some sequential deterioration in consumer surveys in late March and early April, as well as recent stock market weakness.
  • 10:00 AM Richmond Fed manufacturing index, March (consensus +16, last +22)

  Wednesday, April 26

  • There are no major data releases.

  Thursday, April 27

  • 08:30 AM U.S. Census Bureau Advance Economic Indicators Report: Advance goods trade balance, March preliminary (GS -$65.9bn, consensus -$65.4bn, last -$63.9bn); We estimate the goods trade deficit widened $2.0bn to $65.9bn in March, following February’s sharp narrowing that we believe reflected a pronounced impact from the relatively early Chinese New Year, which likely shifted the timing of imports from February to January. Based on our expectation of a partial reversal of these effects as well as a (likely related) sharp rebound in March inbound container traffic, we expect renewed deterioration in the trade balance. At the same time, lower March oil prices should reduce the nominal petroleum deficit, providing a partial offset.
  • 08:30 AM Wholesale inventories, March preliminary (consensus +0.3%, last +0.4%); 08:30 AM Durable goods orders, March preliminary (GS +2.1%, consensus +1.3%, last +1.8%) ; Durable goods orders ex-transportation, March preliminary (GS +0.4%, consensus +0.4%, last +0.5%); Core capital goods orders, March preliminary (GS +0.5%, consensus +0.5%, last -0.1%); Core capital goods shipments, March preliminary (GS -0.1%, consensus +0.2%, last +1.0%): We estimate durable goods orders rose 2.1% in March, driven by higher non-defense aircraft orders indicated by stronger company-reported data. We believe the details of the report are likely to be mixed. Manufacturing production was soft in March, exhibiting a 0.2% pullback in ex-auto manufacturing and a 0.4% drop in the capex-sensitive business equipment category. Chinese New Year effects may also weigh on core capital goods shipments growth, to the extent that they boosted the February level. At the same time, capital goods company results and commentary have been encouraging, with mounting evidence of accelerating growth in the industrial economy. Accordingly, we estimate softer shipments, but firmer orders in March, with month-to-month growth rates of -0.1% and +0.5%, respectively. We estimate durable goods orders ex-transportation rose 0.4%.
  • 08:30 AM Initial jobless claims, week ended April 22 (GS 245k, consensus 243k, last 244k); Continuing jobless claims, week ended April 15 (consensus 2,010k, last 1,979k): We estimate initial jobless claims edged up 1k to 245k. Claims have returned to normal levels following two weeks of temporary elevation in mid-to-late March that likely reflected the impact of Winter Storm Stella. Continuing claims – the number of persons receiving benefits through standard programs – have continued to trend down in recent months, suggestive of additional labor market improvement that we expect to continue.
  • 10:00 AM Pending home sales, March (GS +0.5%, consensus -1.0%, last +5.5%): Regional housing data released so far suggest the improvement in February contract signings continued into March, despite unseasonably cold temperatures and above-average snowfall. We expect a 0.5% increase in the pending homes sales index, adding to the 5.5% increase in the prior month. Stable-to-higher March pending homes sales would be particularly encouraging in the context of higher mortgage rates, which incidentally have declined so far in April after reaching a two-year high in mid-March. We have found pending home sales to be a useful leading indicator of existing home sales with a one- to two-month lag.
  • 11:00 AM Kansas City Fed manufacturing index, April (consensus +16, last +20)

  Friday, April 28

  • 08:30 AM GDP (advance), Q1 (GS +1.4%, consensus +1.1%, last +2.1%); Personal consumption, Q4 (GS +1.3%, consensus +0.9%, last +3.5%): We expect a +1.4% increase in the first vintage of Q1 GDP (qoq saar), driven by a double-digit increase in residential investment (+12.6%) and a robust pace of growth in business fixed investment (+6.9%), partially offset by a negative growth contribution from inventory investment (-0.7pp) and net exports (-0.1pp). Accordingly, our growth estimate for the domestic final sales component is somewhat firmer at +2.1%. We look for real personal consumption to rise 1.3%, aided by a late-quarter boost to utilities consumption that reflects the impact of unseasonably cold weather in March.
  • 08:30 AM Employment cost index, Q1 (GS +0.7%, consensus +0.6%, last +0.5%); We estimate that growth in the Employment Cost Index (ECI) accelerated to 0.7% in Q1 (qoq sa) from 0.5% in Q4, with the year-over-year pace rising to 2.3% (from 2.2%). Our forecast mainly reflects firming wage growth in an economy at or near full employment. The ECI rose a softer-than-expected 0.5% in the fourth quarter, and the headline measure appears to have overshot to the downside relative to underlying wage growth in the ECI sample. Wages and salaries excluding incentive-paid occupations actually firmed last quarter, rising 2.5% year over year vs. 2.4% in Q3. This suggests some scope for the gap to close (or overshoot in the other direction) in Q1. Relatedly, we see scope for improving wage growth in sales and related occupations and in the administrative and support services industries, where wages and salaries exhibited rare outright declines last quarter.  Wage growth data has generally been stable-to-higher so far in 2017, most notably the Atlanta Fed wage tracker, which rose to 3.4% year over year in March. Our broader Q1 wage tracker rose 2.9% year over year in Q1, up from 2.8% in Q4 and compared to the Q4 ECI of +2.2% (yoy). Taken together, our base case expectation is that growth in the Employment Cost Index will round up to +0.7%.
  • 09:45 AM Chicago PMI, April (GS 57.0, consensus 56.5, last 57.7): We expect the Chicago PMI to decrease to 57.0 in April after the index edged up to 57.7 in March. Despite expected sequential softness, the index is likely to remain at a level consistent with growth in the manufacturing sector, in line with the reports of other regional manufacturing surveys in April.
  • 10:00 AM University of Michigan consumer sentiment, April final (GS 97.5, consensus 98.0, last 98.0): We expect the University of Michigan consumer sentiment index to pull back 0.5pt to 97.5 in the April final estimate, reflecting some sequential deterioration in April consumer surveys. The preliminary report’s measure of 5- to 10-year ahead inflation expectations was unchanged at 2.4%. With gas prices rebounding in April, the related technical drag on reported inflation expectations should be limited.
  • 01:15 PM Fed Governor Brainard (FOMC voter) speaks: Federal Reserve Governor Lael Brainard will give a speech on “Fintech and the Future of Finance” at the Kellogg School of Management at Northwestern University in Illinois. Audience Q&A is expected.
  • 02:30 Philadelphia Fed President Harker (FOMC voter) speaks: Philadelphia Federal Reserve President Patrick Harker will give a speech on “How STEM Can Get You Anywhere” at the X-STEM Symposium in Washington D.C. Audience Q&A is expected.

  Source: JPM, Goldman, SocGen

  

  

• FX Volatility Crashes As Traders Unwind "Existential Euro" Hedges

  Heading into today's vote, FX options markets had seen massive demand for downside protection against a result that threatened the euro's existence. That didn't happen and so those hedges are being unwound en masse with the biggest drop in EURUSD implied vols in history…

  

   

  Close up, 1mo EURUSD vols erased all the damage from the last few weeks' fears…

  

   

  And Risk-Reversals (which measure the skew or relative demand for downside protection over upside), have spiked back to near 'normal' levels…

  

   

  Notably EURJPY (which was one of the biggest movers tonight) has begun to fade quite significantly…

  

   

  Retracing 50% of its spike as the world wakes up to debt ceiling concerns and what the ECB will do…

  

  

  

• How Did NY Gov. Cuomo Make $783,000 From A Book That Sold Only 3,200 Copies?

  Fox News Channel parent News Corporation may be wrapped up in the sexual harassment accusations surrounding host Bill O’Reilly, but, as International Business Times' Lydia O'Neal reports, the company is facing another long-running scandal involving what appear to be exuberant payments to a Democrat – payments that occurred even as News Corp. was lobbying the New York State executive branch, which Gov. Andrew Cuomo oversees.

  

  The New York governor, whose memoir was published by the News Corp.-owned HarperCollins in 2014, saw his gross income more than double last year, to $417,748 for 2016 (from $196,243 the year before), the Buffalo News reported Tuesday. Cuomo attributed $218,100 of that increase to sales of his memoir, “All Things Possible: Setbacks and Successes in Politics and Life.”

  In 2015, the governor reportedly earned zero income from book sales and in the nearly three years that it's been on the market, it has sold just 3,200 copies. But Cuomo, the Buffalo News found, reported that he received a total of $783,000 from HarperCollins in book sales over the past three years,  a number that would translate to royalty payments of nearly $244.69 per copy.

  Today, the book was selling on Amazon for $8.45.

  

   

  A spokesperson for Gov. Cuomo told International Business Times, “This payment was contractual and per the agreement with the publisher.” A spokesperson from HarperCollins said the publisher does not “comment on financial matters relating to our books.” News Corp. did not respond to IBT requests for comment.

  News Corp., in the meantime, was registered as a lobbying client as recently as December 2016, according to the New York State government lobbying database. The mass media company, created and headed by Executive Chairman and former CEO Rupert Murdoch, has a long history of lobbying Cuomo’s office for the passage of bills beneficial to its businesses, as previously reported by IBT.

  Government documents reviewed by IBTimes show that News Corp. and its subsidiary Twenty-First Century Fox, Inc., through the law firm Greenberg Traurig, put tens of thousands of dollars behind efforts related to state legislation from the executive branch that affected the media industry, while paying Cuomo book royalties.

  Read more here…

  

  

• Outrage After At Least 5 EU Nations Elect Saudi Arabia On UN Women's Rights Council

  In what may have been the biggest trolling of the United Nations in recent history, Saudi Arabia was elected via secret ballot in the UN Economic and Social Council to the 45-member UN Commission on the Status of Women last week. According to Reuters, twelve other countries were also elected by the council in Geneva to serve for a four-year term, ending in 2022: Algeria, Comoros, the Democratic Republic of the Congo, Ghana, Kenya, Iraq, Japan, South Korea, Turkmenistan, Ecuador, Haiti and Nicaragua.

  The news promptly sparked mocking and ridicule. UN Watch, a human rights organization monitoring the performance of the United Nations, strongly condemned the appointment of Saudi Arabia to post,citing Riyadh’s poor women’s rights record and widespread gender inequality.

  “Electing Saudi Arabia to protect women’s rights is like making an arsonist into the town fire chief. It’s absurd,” Hillel Neuer, the UN Watch chief, said.

  Every Saudi woman “must have a male guardian who makes all critical decisions on her behalf, controlling a woman’s life from her birth until death. Saudi Arabia also bans women from driving cars,” Neuer added.

  Who voted for Saudi Arabia? At least 5 EU nations based on UN Watch math: “Neuer said that seven of the 54 council states did not vote for Saudi Arabia, and that, based on his count, five of the 12 EU states on the council voted in favor of Saudi Arabia. It received the least amount of votes out of all of the 13 newly approved members, he added.”

  At least 5 EU states voted FOR the Saudis.
  Belgium?
  Czech?
  Estonia?
  Finland?
  France?
  Germany?
  Greece?
  Ireland?
  Italy?
  Portugal?
  Sweden?
  UK? pic.twitter.com/e4FPK1PgMB

  — Hillel Neuer (@HillelNeuer) April 23, 2017

  //platform.twitter.com/widgets.js

  Twitter users were just as amazed at the news:

  @HillelNeuer@UN_CSW@UNECOSOC I wish I could find the words to express how I feel right know. I’m ‘saudi’ and this feels like betrayal.

  — kh.oz (@khuludAu) April 23, 2017

  //platform.twitter.com/widgets.js

  Absurd! UN couldn’t have done bigger injustice to women’s cause
  UN Elects KSA to Women’s Rights body https://t.co/Nk2ecKmxc0 via @unwatch

  — Baqir Sajjad (@baqirsajjad) April 23, 2017

  //platform.twitter.com/widgets.js

  Insane! Saudi Arabia is elected chieftain over women’s rights by U.N? A country where women aren’t allowed to drive? https://t.co/mZZHfQvXGa

  — Luna Safwan (@LunaSafwan) April 23, 2017

  //platform.twitter.com/widgets.js

  Do I understand this correctly? Saudi Arabia is elected chieftain over women’s rights by U.N? A country where women aren’t allowed to drive?

  — Yradur (@nacktepoesie) April 23, 2017

  //platform.twitter.com/widgets.js

  According to its website, the CSW with Saudi Arabia now its latest official member, is aimed at “promoting women’s rights, documenting the reality of women’s lives throughout the world, and shaping global standards on gender equality and the empowerment of women,”according to its website. Saudi Arabia’s bid to be elected to the UN Commission on the Status of Women was made in September 2016. At the time, the country referred to its record on women’s rights protection, which goes “in accordance with Sharia, which guarantees fair gender equality.”

  No joke: Saudi Arabia is running for the UN Human Rights Council—and their campaign brochure cites the Saudi record on. . . women’s rights. pic.twitter.com/2xqO62V1GS

  — Hillel Neuer (@HillelNeuer) September 22, 2016

  //platform.twitter.com/widgets.js

  “Saudi discrimination against women is gross and systematic in law and in practice. Every Saudi woman must have a male guardian who makes all critical decisions on her behalf, controlling a woman’s life from her birth until death. Saudi Arabia bans women from driving cars,” Neuer raged. “Why did the UN choose the world’s leading promoter of gender inequality to sit on its gender equality commission?”

  While the answer was unclear, it involves a dollar sign, lots of zeroes and even greater promises for future “investment” in said 5 EU countries.

  

  

Digest powered by RSS Digest

• There Will Be Blood: Left Prepares For War After Berkeley Beat Down With "Combat Training, Better Equipment, Guns…"

  Authored by Mac Slavo via SHTFplan.com,

  Last week Trump supporters and leftist social justice warriors met on the political field of battle in Berkeley, California. Words were exchanged, as were punches. And while an alt-right leader was punched in the face, by all accounts even the social justice warriors admit that they got a major beat-down.

  This prompted a reddit discussion among the left’s tolerant resistance movement, with many asking how they can more effectively go to war against anyone who disagrees with their social, political, and economic views.

  The anti-Trump protesters at the rally were ill-prepared for what they came to Berkeley to confront and now they are trying to figure out ways to ensure it doesn’t happen again.

  

  In short, as predicted, they are turning to militancy and mob action by mobilizing individuals and groups to attend combat training seminars, acquiring better equipment like baseball bats and helmets, and of course, if things really go bad… guns.

  Yes, we seemed to have lost today. The alt-right held their ground. If we wanna take action against them, we need to be better organized and better trained. It doesn’t help that it’s only the far left opposing them, any trump supporter can be radicalized far easier than any liberal.

   

  I hope we learn from today

   

  …

   

  A shocking number of our comrades went in there with absolute no combat training. We need to set up seminars or something of the sort.

   

  …

   

  We also need better equipment, I know the bandanna and hoodie look is our trade mark, but I saw the right wearing motorcycle helmets, and baseball helmets. A dude wearing a helmet is going to keep going if he get punched, our guys are going down.

  

  And though they are, always have been and always will be “tolerant” and “peaceful protesters,” many are now discussing arming themselves so they can go head to head with the “fascist” and “racist” alt-right.

  I honestly think we need a campaign to get more antifa armed. It seems that seems to be the biggest problem with our resistance. They’re mostly armed, why aren’t we?

   

  …

   

  Not getting disarmed is a big part of the problem, yes, but we need more than flags and bats. We need to take notes from the John Brown Gun Club and get firearms and training. I know getting firearms in states and cities we have a presence in is usually a hassle, but even handguns would help. It would certainly put a psychological element in while holding fash back. Who do you think a fascist is more afraid of? People with only flags and bats, or people with flags, bats, and guns?

  

  Video report:

  The “comrades” organizing against “fascists,” which basically means anyone and everyone who voted for President Trump, are quickly coming to the conclusion that to win this conflict they will need to be armed with more than just flags, banners, chants and pepper spray.

  And all this time we thought hugging it out would be the solution…

  Apparently, there is a realization among the left that whatever it is they are trying to accomplish will not come with peaceful assembly, but rather, with blood in the streets.

  As we and others like Brandon Smith of Alt-Market previously warned, the Left WILL Resort To Large Scale Violence… To Stop Fascism:

  I believed at that time that the social-justice cult would lose mainstream influence but that the existing minority would resort to even more insidious tactics and greater violence to get what they want; and, the so-called “moderate left” would cheer them on.  As it turns out, I have been proven right so far.

   

  Not that extreme Leftists have been averse to violence over the past year, but I think it is safe to say that the volume on the cultural Marxist machine has been turned up a notch.

   

  …

   

  The social justice mantra is changing. At first, it was predominately about forming mobs to “shame” target political opponents into silence. Now, it is about forming mobs to do what they call “punching Nazis.” Leftists are now often seen regurgitating the claim — “This is only the beginning…”

  Indeed, this is only the beginning.

  Ladies and Gentlemen, if you have a Trump bumper sticker, an American flag or a Gadsden decal on your vehicle, prepare to defend yourselves.

  There will be war.

  

  

• "The Retail Bubble Has Now Burst": A Record 8,640 Stores Are Closing In 2017

          “Thousands of new doors opened and rents soared. This created a bubble, and like housing, that bubble has now burst.”

          – Richard Hayne, Urban Outfitters CEO, March 2017

  The devastation in the US retail sector is accelerating in 2017, and in addition to the surging number of brick and mortar retail bankruptcies, it is perhaps nowhere more obvious than in the soaring number of store closures.

  While the shuttering of retail stores has been a frequent topic on this website, most recently in the context of the next “big short”, namely the ongoing deterioration in the mall REITs and associated Commercial Mortgage-Backed Securities and CDS, here is a stunning fact from Credit Suisse:“Barely a quarter into 2017, year-to-date retail store closings have already surpassed those of 2008.”

  According to the Swiss bank’s calculations, on a unit basis, approximately 2,880 store closings were announced YTD, more than twice as many closings as the 1,153 announced during the same period last year. Historically, roughly 60% of store closure announcements occur in the first five months of the year. By extrapolating the year-to-date announcements, CS estimates that there could be more than 8,640 store closings this year, which will be higher than the historical 2008 peak of approximately 6,200 store closings, which suggests that for brick-and-mortar stores stores the current transition period is far worse than the depth of the credit crisis depression.

  

  As the WSJ calculates, at least 10 retailers, including Limited Stores, electronics chain hhgregg and sporting-goods chain Gander Mountain have filed for bankruptcy protection so far this year. That compares with nine retailers that declared bankruptcy, with at least $50 million liabilities, for all of 2016. On Friday, women’s apparel chain Bebe Stores said it would close its remaining 170 shops and sell only online, while teen retailer Rue21 Inc. announced plans to close about 400 of its 1,100 locations.

  Broken down by retailer, either in bankruptcy or not yet:

  

  Another striking fact: on a square footage basis, approximately 49 million square feet of retail space has closed YTD. Should this pace persist by the end of the year, total square footage reductions could reach 147M square feet, another all time high, and surpassing the historical peak of 115M in 2001.

  

  There are several key drivers behind the avalanche of “liquidation” signs on store fronts.

  The first is the glut of residual excess retail space. As the WSJ writes, the seeds of the industry’s current turmoil date back nearly three decades, when retailers, in the throes of a consumer-buying spree and flush with easy money, rushed to open new stores. The land grab wasn’t unlike the housing boom that was also under way at that time.

  “Thousands of new doors opened and rents soared,” Richard Hayne, chief executive of Urban Outfitters Inc., told analysts last month. “This created a bubble, and like housing, that bubble has now burst.”

  The excess retail space means that North America has a glut of retail outlets, as well as far too many shopping malls, something which is becoming apparent as sales per capita decline. On a per capita basis, the US has roughly 24 square feet of retail space per capita, more than twice the space of Australia and 5 times that of the UK.

   

  

  The over-storing, including the influx of fast-fashion and off-price chains, has resulted in a brutally competitive landscape that made difficult for retailers to raise prices. “A pair of men’s dress pants costs less today than they did a decade ago,” Manny Chirico, chief executive of Calvin Klein and Tommy Hilfiger parent PVH Inc., said in a recent interview.

  * * *

  Then there are retail rental rates, which across top US markets, such as New York, remain the highest in the world. For years, retailers could afford the egregious demands by landlords. But as overall traffic and volumes have declined, this has also prompted an exodus of outlets even among the most desired locations, leading to a surge in “fors rent or lease” signs popping up in unexpected places like Madison Avenue’s “golden mile.”

  

   

  According to the FT, on New York’s Fifth Avenue, the world’s most expensive shopping street, vacancy rates have jumped from 10 per cent a year ago to 16 per cent, according to Cushman & Wakefield. Rents there have fallen for the first time since the recession “and the trend is not over”, the consultancy warns. Vacancy rates across SoHo have climbed to 18 per cent, from 12 per cent a year ago, according to Jones Lang LaSalle.

  The newfound caution among retailers has had a “very significant and fast” negative impact on retail property, says Chris Conlon, chief executive of Acadia Realty, a real estate investment trust. 

   

  It is not just prestigious streets that have been hit. Malls are also hurting, as chains from Sears to Macy’s shut hundreds of stores. Analysts at Green Street Advisors argue that “low growth is the new normal”, while market rents are becoming decoupled from tenants’ revenue growth as more sales move online. 

  “[Rents] are at a price point now that exceeds what retail sales can perform,” says Spencer Levy, global head of research for CBRE. He notes that a stronger US dollar also hurts sales in New York, where deep-pocketed foreigners historically flock for deals.

  * * *

  Then there is the online migration, which recently made Jeff Bezos, owner of Amazon, the world’s second richest man.

  

  As the WSJ adds, as retailers rushed to expand their physical footprint, the internet was gearing up to do to apparel companies what it had already done to booksellers: sap profits and eliminate what little pricing power these chains commanded.

  Despite the view that shoppers prefer to try on clothing in physical stores, apparel and accessories are expected this year to overtake computers and consumer electronics as the largest e-commerce category as a percentage of total online sales, according to research firm eMarketer.

   

  Helena Cawley, 37 years old, said she used to be a “die-hard” department-store shopper. But with two small children, the Manhattan entrepreneur doesn’t have time to visit physical stores the way she once did. “I buy much more online now,” she said. “With free returns and free shipping, it’s so easy.”

  Ironically, that shift to online shopping has come at a high cost to retailers. It is less profitable to do business online than in a brick-and-mortar store, largely due to the higher shipping, customer-acquisition and technology costs of the digital world. Retail margins on average fell to 9% last year from 10.5% in 2012, according to consulting firm AlixPartners LP. Over that period, e-commerce sales increased to 15.5% of total sales from 10.5%. The internet has also made it easier for consumers to comparison shop, thereby erasing any pricing leverage retailers may have had. “The internet has acted as the great price equalizer,” said Joel Bines, the co-head of Alix’s retail practice.

  * * *

  Yet while the retail bubble may have burst, does that mean the conventional brick-and-mortar industry is doomed? Perhaps not:

  Retailing has gone through shakeouts before, whether it was the superstores such as Wal-Mart Stores Inc., Target Corp. and Kmart that killed mom-and-pop shops, or category killers like Barnes & Noble Inc. and Toys “R” Us Inc. that did the same to smaller booksellers and toy chains. And even today, there are chains that continue to grow, such as off-price retailer TJX Co s., which is opening hundreds of stores under its Marshalls, T.J. Maxx and HomeGoods banners, as it steals market share from Macy’s Inc. and other traditional department stores.

   

  “This is not the end of retailing as we know it,” Mr. Bines said. “People are not going to stop going to stores.”

  He’s right, however in the meantime there will be an avalanche of defaults: compounding the retail decline is the debt that retailers have added to their balance sheets in recent years, either through leveraged buyouts or to fund share buybacks. That leverage has become a problem as profits dry up. According to Moody’s Investors Service, the amount of debt coming due for 19 distressed retailers is set to more than double over the next two years.

  Many retailers were slow to seize on the significance of these changes. When business was bad during the 2015 holiday season, many chains blamed unusually warm weather. But when the most recent holiday season once again failed to produce robust sales growth, “retailers realized this was a structural change,” Credit Suisse analyst Christian Buss said.

  With all that in mind, is Amazon assured of becoming the world’s first trillion-dollar stock, perhaps hitting the milestone even before Apple? Perhaps, then again, chains such as Wal-Mart have stepped up their game. In a bid to better compete with Amazon.com , the giant retailer has been scooping up e-commerce startups, including Jet.com and ModCloth. And just this past week, PetSmart Inc. bought Chewy.com, a fast-growing online rival.

  Others have given up waiting for a recovery that seems always out of reach and are settling into what appears to be the new normal. “We’re planning as if the environment is not going to improve,” Jerry Storch, chief executive of Saks Fifth Avenue and Lord & Taylor parent Hudson’s Bay Co., told analysts earlier this month. In the meantime, expect more store closures, more bankruptcies (recall “According To Fitch These Eight Retailers Will File For Bankruptcy Next“), and, of course, far lower asset prices, both for retail equities and mall REITs, as well as the underlying CMBS securities that for years funded the US retail (and especially mall) bubble, which has now violently burst.

  

  

  

• Visualizing The Collapse Of The Middle Class In 20 Major U.S. Cities

  When future historians look back at the beginning of the 21st century, they’ll note that we grappled with many big issues. They’ll write about the battle between nationalism and globalism, soaring global debt, a dysfunctional healthcare system, societal concerns around automation and AI, and pushback on immigration. They will also note the growing number of populist leaders in Western democracies, ranging from Marine Le Pen to Donald Trump.

  However, as Visual Cpitalist's Jeff Desjardins notes, these historians will not view these ideas and events in isolation. Instead, they will link them all, at least partially, to an overarching trend that is intimately connected to today’s biggest problems: the “hollowing out” of the middle class.

  VISUALIZING THE COLLAPSE OF THE MIDDLE CLASS

  The fact is many people have less money in their pockets – and understandably, this has motivated people to take action against the status quo.

  And while the collapse of the middle class and income inequality are issues that receive a fair share of discussion, we thought that this particular animation from Metrocosm helped to put things in perspective.

  The following animation shows the change in income distribution in 20 major U.S. cities between 1970 and 2015:

  

  The differences between 1970 and 2015 are intense. At first, each distribution is more bell-shaped, with the majority of people in a middle income bracket – and by 2015, those people are “pushed” out towards the extremes as they either get richer or poorer.

  A BROADER LOOK AT INCOME INEQUALITY

  This phenomenon is not limited to major cities, either.

  Here’s another look at the change in income distribution using smaller brackets and the whole U.S. adult population:

  

  It’s a multi-faceted challenge, because while a significant portion of middle class households are being shifted into lower income territory, there are also many households that are doing the opposite. According to Pew Research, the percentage of households in the upper income bracket has grown from 14% to 21% between 1971 and 2015.

  The end result? With people being pushed to both ends of the spectrum, the middle class has decreased considerably in size. In 1971, the middle class made up 61% of the adult population, and by 2014 it accounted for less than 50%.

  As this “core” of society shrinks, it aggravates the aforementioned problems. People and governments borrow more money to make up for a lack of middle class wealth, while backlashes against globalism, free trade, and open borders are fueled. The populists who can “fix” the broken system are elected, and so on.

  

  

• China’s Credit Excess Is Unlike Anything The World Has Ever Seen

  By Andrew Brown, a partner for macro and strategy at ShoreVest Capital Partners

  From a global macroeconomic perspective, we encourage readers to consider that the world is experiencing an extended, rolling process of deflating its credit excesses. It is now simply China’s turn.

  For context, Japan started deflating their credit bubble in the early 1990s, and has now experienced more than 20 years of deflation and very little growth since. The US began its process in 2008, and after eight years has only recently been showing signs of sustainable recovery. The euro zone entered this process in 2011 and is still struggling six years onward. We believe China is now entering the early stages of this process.

  Having said that, we believe that Chinese authorities have a viable plan for deflating their credit excess in an orderly fashion. Please stay posted as we will review this multi-pronged, market-based approach in our next column.

  For now, let’s turn our attention to the size of the credit excess that China created and why we estimate it to be the largest in the world.

  A credit excess is created by the speed and magnitude of credit that is created – if too much is created in too short a time period, excesses inevitably occur and non-performing loans (NPLs) emerge.

  To illustrate the credit excess that has been created in China, let’s review several key indicators, including the: 1) flow of new credit; 2) stock of outstanding credit; 3) credit deviation ratio (i.e., excess credit); 4) incremental capital output ratio (efficiency of credit allocation).

  The chart below shows the amount of credit created as a percentage of GDP during the five years prior to major downturns globally.

  

  The US created 58 per cent of GDP between 2002-07, and the global financial crisis followed.

  Japan created credit equivalent to the entire size of its economy between 1985-90 and subsequently experienced more than 20 years of deflation (admittedly reflecting the lack of restructuring).

  Thailand created a significant real estate bubble between 1992-97 and ended up with about 45 per cent NPL ratios.

  Spain created credit equivalent to 116 per cent of GDP between 2002-07 and still is trying to address a 20 per cent unemployment rate.

  China created 139 per cent of GDP in new credit between the first quarter of 2009 and the third quarter of 2014 (when GDP growth peaked), far greater than what was created in other major credit bubbles globally.

  This unprecedented flow of new credit was predominantly in infrastructure and corporate credit. The result is that China’s corporate debt-to-GDP is too high and must be addressed, which authorities are now doing.

  

  Another important measure to assess the amount of credit in the economy which is “excessive” is the credit-to-GDP gap, as reported by the Bank of International Settlements. This ratio measures the difference between the current credit-to-GDP ratio in an economy against its long-term trend of what is necessary to optimally support long-term GDP growth. It is akin to measuring the amount of credit that is productively deployed into an economy.

  This metric is used by the Basel III framework in determining countercyclical capital buffers for a country’s banking system when credit creation becomes too fast (i.e., high credit growth requires higher capital ratios for banks).

  

  A credit-to-GDP gap above 10 per cent of GDP is considered risky and requires the maximum additional 2.5 per cent of tier one capital as a countercyclical buffer under Basel III. A credit-to-GDP gap above 10 per cent of GDP is increasingly problematic as any new credit extended above that level produces progressively less GDP and is a source of future NPLs.

  Out of the 43 countries currently measured by the BIS, China has the largest credit-to-GDP gap (by orders of magnitude) at 30 per cent of GDP. This is equivalent to US$3.1 trillion in excess credit.

  Finally, to show that the pace of credit creation will necessarily slow, thereby exposing misallocated credit and driving the emergence of new NPL formation, we turn to the deterioration in China’s incremental capital output ratio.

  This ratio is the measure of the number of units of input required to produce one unit of GDP.

  For the 15 years prior to the credit impulse in 2009-14, China’s incremental capital output ratio has been consistently between two and four. Meaning that two to four yuan in fixed asset investment created one yuan in GDP.

  But as a result of the credit-driven economic growth model, and the excessive credit that has been created (and the subsequent excess capacity in the industrial economy), China’s investment efficiency has deteriorated to the point that its incremental capital output ratio is now over 13.

  

  Said another way, every 1 yuan in new fixed asset investment is now creating only 7 fen in GDP. Meaning that new credit creation is having an increasingly lower transmission into GDP growth. Simply put, credit growth must necessarily slow and be redirected towards more productive activities.

  

  

• ANTIFA Upset For Not Being Able to Punch 'Nazis' Without Consequences

  This is rich with irony. Here’s an active forum on Reddit where ANTIFA degenerates discuss committing acts of violence against nazis. Again, and for the record, Le Fly supports all forms of violence, especially for superficial reasons. The laughable part of what this homo is saying below, is that he’s upset that right wingers have unveiled the identity of a fellow criminal.

  He’s now so beset with anguish over there being consequences for his cowardly assaults, that he’s contemplating quitting altogether, until they can get their shit sorted out. This form of stupidity shouldn’t be tolerated. He deserves to be impaled by the Based Stickman.

  

  This all stems from the incredible investigative work done by people on 4chan, who deduced the identity of the bike lock guy, potential mass murderer, just by the boots on his feet, bag on his back, and pen in is pocket.

  Pol is systematically unmasking Antifag felons. Enjoy your stay in prison. Good look punching the real nazis inside there. pic.twitter.com/ZPzTEHNydM

  — The_Real_Fly (@The_Real_Fly) April 20, 2017

  //platform.twitter.com/widgets.js

  The investigation to find the bike lock scum has been concluded. pic.twitter.com/aQDewl4ZBT

  — The_Real_Fly (@The_Real_Fly) April 20, 2017

  //platform.twitter.com/widgets.js

  Pol concludes bike lock attempted murderer is… pic.twitter.com/4CE6oSbzdr

  — The_Real_Fly (@The_Real_Fly) April 20, 2017

  //platform.twitter.com/widgets.js

  By the looks of it, the Marxist potential mass murderer is now dutifully unemployed from the college he was gainfully employed.

  It looks like the attempted mass murderer, the bike lock Antifa scum, has been fired. pic.twitter.com/RyMAQ8WJQl

  — The_Real_Fly (@The_Real_Fly) April 22, 2017

  //platform.twitter.com/widgets.js

  Many of these Antifa scum are being unveiled as college professors. What a shock.

  Here’s a list of donors to an ANTIFA front group.

  List of Corporate Donors to Antifa Front Group BAMN pic.twitter.com/qMFwXoBe57

  — Jack Posobiec ???????? (@JackPosobiec) April 22, 2017

  //platform.twitter.com/widgets.js

  If you’re curious about the potential mass murder bike lock guy, here’s what he did.

  Content originally published at iBankCoin.com

  

• Which Country Is America’s Biggest Enemy?

  Between alleged interference in U.S. elections by Russia, recent nuclear posturing by North Korea, and chemical weapon atrocities in Syria – it’s hard to keep track of which country is supposed to be the bona fide number one “enemy” of the United States.

  While we can’t tell you exactly what people are thinking in this moment, Visual Capitalist's Jeff Desjardins has access to about 15 years worth of polls on the subject. The data ends up painting an interesting backdrop for America’s foreign policy decisions over the same timeframe, as well as the narratives being pushed by major media outlets.

  CONGRATS, DEAR LEADER

  Today’s first map visualizes the most recent data from a YouGov survey between January 28 and February 1, 2017, which was taken just before the most recent string of geopolitical turmoil.

  

  Source: Visual Capitalist

  During the survey window, more Americans viewed North Korea as an enemy than any other country, with the Hermit Kingdom being ranked as an “enemy” by 57% of respondents. Of course, new tensions have surfaced since then, as North Korea continues to defy U.S. pressure with further missile tests under Kim Jong-Un. This probably hasn’t helped their case with American citizens.

  As you might imagine, aside from North Korea, most of the countries that skew towards the top of the “enemy” spectrum are located in the Middle East and North Africa. Here’s a close-up of that region, with the numbers that specific countries poll at there:

  

  Source: Visual Capitalist

  Looking just at this geographic area, Iran stands out the most with 41% of Americans considering it to be an “enemy”. That places it right behind North Korea on the enemy list, at least as far as this most recent poll is concerned.

  Following Iran in the rankings were Syria (32%), Iraq (29%), and Afghanistan (23%).

  CHANGING ENEMIES OVER TIME

  One thing is for sure: America’s biggest foe isn’t a constant. The identity of America’s arch-nemesis ebbs and flows as global events unfold, and the opinions of citizens are swayed.

  The following animation shows the answer to a slightly different poll question, this time by Gallup, which was asked multiple years between 2001 and 2016. Specifically, Americans were asked (unprompted) to name the country that is their “greatest enemy”.

  See how the rankings fluctuate over time, including Iraq’s precipitous drop after Saddam was ousted and the country turned out to not have WMDs:

  

  Source: Visual Capitalist

  Particularly, Iran had a good run between 2006-2012, when it was the top-ranked “enemy” in each year a poll was done.

  At other times, North Korea (2005, 2016), Iraq (2001, 2005), Russia (2015), and China (2014) have all topped the list as well.

   

  

  

• Yesterday's Broad Power Outage Likely Caused By Geomagnetic Storm

  Via StockBoardAsset.com,

  Yesterday, a massive US power grid failure was seen across the entire United States in one simultaneous fashion. San Fransisco, New York, and Los Angeles were the three main areas that were hit the hardest. Each of the areas experienced challenges or shut downs in business commerce. Also, basic infrastructure such as communication networks, mass transportation, and supply chains experienced challenges. To many this seemed apocalyptic with anaylst citing possible cyber attacks amid mounting geopolitical turmoil across the globe. We’re shocked that mainstream media didn’t revive the failing Russian narrative for another round of fake news to confuse the masses. Personally, I don’t think it was a cyber attack or the Russians, but more of a Space Weather Event.

  Space weather refers to the environmental conditions in Earth’s magnetosphere, ionosphere and thermosphere due to the Sun and the solar wind that can influence the functioning and reliability of spaceborne and ground-based systems and services or endanger property or human health.

  Here is PG&E outage map from yesterday’s event. Widespread. 

  

  This is the Planetary K-Index, which 5 or greater indicates storm-level geomagnetic activity around earth. The latest space weather data signals a geomagnetic storm rolled in on April 20, 2017. During the elevated K-waves >5, San Fransisco, New York, and Los Angeles experienced power grid failures simultaneously.

  

   

  Latest Space Weather Warnings

  April 22, 2017 @ 08:40 UTC – Geomagnetic Storm Warning (UPDATED)

  A moderate (G2) geomagnetic storm is currently in progress thanks to a high speed solar wind stream above 700 km/s. More storming is expected over the next several days as a coronal hole stream rattles our geomagnetic field. Sky watchers at middle to high latitudes should be alert for visible aurora during the next several nights.ALERT: Geomagnetic K-index of 6
  Threshold Reached: 2017 Apr 22 0559 UTC
  Synoptic Period: 0300-0600 UTC
  Active Warning: Yes
  NOAA Scale: G2 – Moderate

  April 21, 2017 @ 02:40 UTC – Large Coronal Hole Returns / G2 Storm Watch

  A large recurrent coronal hole last seen in March will become geoeffective beginning April 23rd. A moderate (G2) geomagnetic storm watch was added and high latitude sky watchers may be in for an aurora treat once an expected solar wind stream arrives past Earth. More updates in the days ahead. As always, stay tuned to SolarHam.com where you will find the most up to date information.

  According to http://www.solarham.net/, who uses NOAA data, Geomagnetic Storm has been declared for the past few days.

  

  Piecing together the puzzle, we understand the sun can unleash space weather that can have profound effects on ground based systems, as well as human health. In a report from NOAA titled: Geomagnetic Storms and the US Power Grid, the paper mentions how the US power grid is highly interconnected and susceptible to damage from geomagnetic storms.

  US Power Grid is an interconnected system which may explain why San Fransisco, New York, and Los Angeles all experienced power failures relatively at the same time.

  

  The report shows that the sun is the source of ‘GICs’ Geomagnetically Induced Current.

  

   

  GICs can enter the earth’s surface through transformers in the power grid.

  

  GICs can force a transformer tank wall to overheat

  

  Just maybe thats what happened in San Fransisco with the substation fire

  

   

  What is a substation?

  A substation is a part of an electrical generation, transmission, and distribution system. Substations transform voltage from high to low, or the reverse, or perform any of several other important functions. Between the generating station and consumer, electric power may flow through several substations at different voltage levels. A substation may include transformers to change voltage levels between high transmission voltages and lower distribution voltages, or at the interconnection of two different transmission voltages.

  2003 Substation fire due to a geomagnetic storm overheating a transformer

  

  Take away points

  

  Looking ahead, the growth of the US transmission grid has exploded in the past 60 years. This leaves an abundant amount of the US grid susceptible to more power outages and possibly widespread events.

  

  Bonus: Executive Order — Coordinating Efforts to Prepare the Nation for Space Weather Events (Fall 2016). What does our Gov’t know that we don’t?

  

  Bonus: ATL FED-> Playing the Field: Geomagnetic Storms and the Stock Market

  

  

  

• Cheat Or Chump? – You Are Not An Investor

  Authored by Raul Ilargi Meijer via The Automatic Earth blog,

  You are not an investor. One can only be an investor in functioning markets. There have been no functioning markets since at least 2008, and probably much longer. That’s when central banks started purchasing financial assets, for real, which means that is also the point when price discovery died. And without price discovery no market can function.

  You are therefore not an investor. Perhaps you are a cheat, perhaps you are a chump, but you are not an investor. If we continue to use terms like ‘investor’ and ‘markets’ for what we see today, we would need to invent new terms for what these words once meant. Because they surely are not the same thing. Even as there are plenty people who would like you to believe they are, because it serves their purposes.

  Central banks have become bubble machines, and that is the only function they have left. You could perhaps get away with saying that the dot-com bubble, maybe even the US housing bubble, were not created by central banks, but you can’t do that for the everything bubble of today.

  The central banks blow their bubbles in order to allow banks and other financial institutions to first of all not crumble, and second of all even make sizeable profits. They have two instruments to blow their bubbles with, which are used in tandem.

  The first one is asset purchases, which props up the prices for these assets, through artificial demand. The second is (ultra-) low interest rates, which allows for more parties -that is, you and mom and pop- to buy more assets, another form of artificial demand.

  The most important central bank-created bubble is in housing, if only because it facilitates bubbles in stocks and bonds. Home prices in many places in the world have grown much higher than either economic growth or homebuyers’ wages justify.

  In many instances they have even caused a feeding frenzy, where people are so desperate to either have a place to live or not miss out on profits that they’ll pay any price, provided rates are low enough for them to get a loan approved.

  As I said a few weeks ago in Our Economies Run on Housing Bubbles, the housing bubbles created in this way are essential in keeping our economies going, because it is through mortgages -loans in general- that money is created in these economies.

  If this money creation machine would stop, so would the economies. Home prices would come down to more realistic levels, but there still wouldn’t be anyone to buy them, so they would sink further. That, too, is called price discovery. For which there is a bitter and urgent need.

  The Fed is an outlier in the central bank system, in that it no longer buys up too many assets. But other central banks have duly taken over. Indeed, Tyler Durden observes today via Bank of America that BoJ and ECB have bought more assets so far in 2017 than central banks ever have before. One may wonder at what point the term ‘asset’ will lose its rightful meaning to the same extent that ‘investor’ and ‘markets’ have:

  A quick, if familiar, observation to start the day courtesy of Bank of America which in the latest overnight note from Michael Hartnett notes that central banks (ECB & BoJ) have bought $1 trillion of financial assets just in the first four months of 2017, which amounts to $3.6 trillion annualized, “the largest CB buying on record.” As Hartnett notes, the “Liquidity Supernova is the best explanation why global stocks & bonds both annualizing double-digit gains YTD despite Trump, Le Pen, China, macro…”

  A recent graph from Citi and Haver illustrated it this way:

  

   

  Note the rise in central bank balance sheets before 2008. There’s nothing innocent about it.

  As an aside, I like this variation from the Twitter account of “Rudy Havenstein”, which came with the comment:

  Here is a chart of the well being of the American middle-class and poor over the same period.

  

  The Fed tries to become even more of an outlier among central banks, or at least it seems to discuss ways of doing this. Now, I don’t know what is more stunning, the fact that they go about it the way they do, or the lack of anger and bewilderment that emanates from the press and other voices -nobody has a clue what a central bank should be doing-, but the following certainly is ‘something’:

  Fed Intensifies Balance-Sheet Discussions With Market Players

  Federal Reserve staff, widening their outreach to investors in anticipation of a critical turning point in monetary policy, are seeking bond fund manager feedback on how the central bank should tailor and communicate its exit from record holdings of Treasuries and mortgage-backed securities. Fed officials are intent on shrinking their crisis-era $4.48 trillion balance sheet in a way that isn’t disruptive and doesn’t usurp the federal funds rate as the main policy tool. To do that, they need to find the right communication and assess market expectations on the size of shrinkage, which is why conversations with fund managers have picked up recently. “All indications suggest that conversations around the balance sheet have accelerated,” said Carl Tannenbaum at Northern Trust Company. “The consideration of everything from design of the program to communication seems to have intensified.”

   

  Most U.S. central bankers agreed that they would begin phasing out their reinvestment of maturing Treasury and MBS securities in their portfolio “later this year,” according to minutes of the March meeting. They also agreed the strategy should be “gradual and predictable,” according to the minutes. Fed staff routinely seek feedback from investors and bond dealers to get a fix on sentiment and expectations. The New York Fed confirmed the discussions and said it is part of regular market monitoring. The Fed is getting closer to disclosing its plan, and conversations have become more intense. “They are gauging what’s the extent of weak hands in the market that will dump these assets,” said Ed Al-Hussainy, a senior analyst on the Columbia Threadneedle Investment’s global rates and currency team. “They are calling all the asset managers. It is not part of the regular survey.”

  The Fed-created bubbles in stocks, bonds, housing, what have you, have propped up these ‘market players’, which wouldn’t even be ‘market players’ anymore if they hadn’t. That would have made for a much saner world. These people are not ‘investors’ any more either, by the way, and they’re not the chumps either; they are the cheats, the profiteers. At your expense.

  Now, with the new capital they have, courtesy of the Fed and other central banks only, certainly not their own intelligence or timing or knowledge, they get calls from Yellen and other Fed people about what the Fed can do for them this time. Yellen et al are afraid that if the Fed starts selling, the so-called ‘market players’ will too. Of course they will.

  The bubble created by artificial demand cannot be allowed to burst all at once, it has to be done “gradual and predictable.” As if that is possible, as if the Fed controls the bursting of bubbles it has itself created. And Yellen is not going to call you or me, she could not care less; she’s going the call the pigs she fattened up most. The Fed is more than anything a bunch of academics, seduced exclusively by textbook theories that are shaky at best, to transfer wealth to the most sociopathic and hence seductive financial predators, at everyone else’s expense.

  And that expense is humongous. At the same time that the Fed and the rest of the world’s central banks fattened their balance sheets as seen in the graph above, this is what happened to US debt vs GDP:

  

  The Fed bubbles, intended to keep market players whole, are blown at the expense of the real economy. Imagine if all those $20 trillion and counting in central banks’ bubble blowing would have been used to prop up Main Street instead of Wall Street; everybody would have been better off except for the ‘investors’ who are not even real investors.

  The problem is, the Fed has no control over its own bubbles. It may or may not devise ways to ‘deflate’ its balance sheet, but the bubbles that balance sheet gave birth to cannot be deflated in the same way. If the Fed did have ‘bubble control’, it would have chosen to keep both the stock markets (S&P) and housing prices at a much lower level, with only a gradual increase. That would have given the impression that things were still doing sort of fine, without adding the risk -make that certainty- that the whole shebang would blow up. But once’s the genie’s out of the bubble…

  The academics must have missed that part. In the end the Fed works for banks and affiliated ‘industries’, not for people. Even -or especially- those people that like to think of themselves as ‘investors’. Today, in the process, America’s central bank is actively destroying American people. And while the Fed’s operatives may know this or not, the people certainly don’t. They think they’re making fat profits in either stocks or housing. And they are the lucky ones; most Americans are simply drowning.

  A great representation of all that’s wrong in this comes courtesy of this Lance Roberts graph. A chilling illustration of the price you pay for setting S&P records.

  

  These days, every rising asset price, every single bubble, comes at the expense of enormous increases in debt. And there are still people who wish to claim that this is not a bubble. That it is OK to get into deep debt to purchase a home, or stocks, with leverage: can’t miss out on those rates! And sure, that is still true in theory; all you have to do is get out in time. If only the Fed can get out in time, if only you can get out in time.

  ‘Getting out in time’ is bubble territory by definition. It’s not investing. Investing is buying an interest in something that you expect to do well, something that you think may be successful in benefiting society in such a way that people will want to own part of it. As I write down these words, I can’t help thinking of ‘It’s A Wonderful Life’, simply because it is so obvious but already feels so outdated.

  I’m thinking also of Uber and Airbnb and Tesla and so many other ‘innovative’ ideas. All seemingly thriving but only because there’s so much excess cash sloshing around courtesy of Bernanke and Yellen and Draghi, looking for a next bubble to ‘invest’ in. Ideas that apparently have no trouble raising another $1 billion or $10 billion ‘investment’, in the same way that the Tulip Bubble had no such trouble, or the South Sea or Dot.Com ones.

  Good luck with all that, but you’ve been warned, you’re hereby on notice. The odds that you’ll be able to ‘get out in time’ are vanishingly small. And even if you do, most others just like you won’t. And neither will the Fed academics. They have the most so-called ‘money’ at their disposal, and the least sense of what to do with it. But they have their advisers in the private banking industry to tell them all about where to put it: in one bubble or another; anywhere but the real economy.

  Have I mentioned yet that all these start-ups and other bubbles are being launched into a rapidly shinking economy? Or you don’t think it is shrinking? Look, there would be no need for the Fed to blow bubbles if the economy were doing fine. And if so, they wouldn’t. Even academics have an innate sense for risk overdose.

  C’mon, you’re not an investor. And perhaps you won’t even end up a loser, though the odds on that are slim, but one thing’s for sure. You are a character in an epic poem about losers.

  

  

• Despite Mounting Losses, Mystery Trader "50 Cent" Doubles Down With Massive VIX Spike Bet

  Three weeks ago we introduced the real "50 Cent" – the mystery trader whose pattern of huge, near-daily trades on the VIX is turning heads in the options market.

  Not him..

  

   

  As we detailed previously, Pravit Chintawongvanich, head of risk strategy at Macro Risk Advisors,  the huge options buyer known as "50 Cent" shows no signs of slowing down.

  "I would categorize them as someone who doesn't flinch at losing money," commented Chintawongvanich who flagged the activity in a series of research notes.

   

  The money-losing trades in question have been purchases of call options on the CBOE volatility index. These represent bets that market volatility is set to rise, and to a lesser extent, that stocks are set to fall.

   

  Sussing out the actions of an institutional trader based on public information about options trades can be difficult, if not impossible. But this trader made it easier by leaving a clue out in the open. "They have a very particular pattern of buying options," Chintawongvanich explained Wednesday on CNBC's "Trading Nation."

   

  "Basically they come in every day and they buy 50,000 VIX calls worth 50 cents. So in other words, they don't care too much what the strike is; they just pick the option that's worth 50 cents."

  Having reportedly suffered $89 million in losses so far in 2017 however, the trader is not giving up on his strategy and just doubled-down…

  On Wednesday morning, the trader, nicknamed "50 Cent" by Macro Risk Advisors because of their predilection for contracts that cost roughly that much, bought an additional 100,000 VIX calls betting that the index will climb about 40% by May.

  Sending VIX Call volumes to near-record highs…

  

  And MRA doesn't think the trader will stop there. The firm expects purchases of bullish VIX contracts to continue in the coming days.

  "The amounts of money 50 Cent is spending are large, but this could be just the tip of the iceberg when you consider all the hedging that takes place over the counter as well," Pravit Chintawongvanich, the head of derivatives strategy at MRA, wrote in a client note on Thursday.

   

  "Even in the listed space, there is plenty of hedging that takes place that may not be as obvious and predictable as 50 Cent, and thus harder to attribute to one person."

  Still, positioning from hedge funds suggests the trader might be on to something. They haven't been this bullish on the VIX since March 2016, according to data from the US Commodity Futures Association.

  

  Notably, 50 Cent's options would become profitable only if the VIX climbed to between 19 and 26, according to data compiled by MRA.

   

  

  

Digest powered by RSS Digest

• Operation Gotham Shield: U.S. Gov't To "Simulate Nuke Blast Over Manhattan"

  Something has aroused the interests of the American people… perhaps one too many coincidentally 'useful' event means government facilitators have jumped the shark? (via Google Trends)

  

  Which is perhaps why, after discovering Project Gotham Shield, SHTFplan.com's Mac Slavo warns, a false flag watch is now active.

  A general alert is out for something major in the near or immediate future. Hopefully, it is just another false alarm, instead of another false flag. Either way, danger is at hand.

  Given all that is going on in the world, it is downright eerie to discover that the federal government is once again staging mock disasters that draw disturbing parallels with current world events.

  

  In just a few days, during April 24-26th, Operation Gotham Shield will commence.

  It is a tabletop, joint agency exercise involving FEMA, Homeland Security and a myriad of law enforcement and military agencies. WMD, chemical and biological units will all be on hand as a response is tested for a “simulated” nuclear detonation over the United States’ foremost urban center, in the iconic and densely populated island of Manhattan and nearby shores of New Jersey.

  The potential for a more explosive false flag to spin out of control, by hijacking and ‘converting’ the simulated actions, is all too real.

  This is closely related to the mechanism that many researchers believe was at work on the day of 9/11, nesting a false flag attack inside of a series of large-scale training operations which invoked emergency powers and simulated attacks in locations that were actually hit.

  According to the Voice of Reason:

  On April 18th thru May 5th, 2017, state, local, and federal organizations alike are planning for Operation Gotham Shield 2017 — a major nuclear detonation drill in the New York-New Jersey area, along with the U.S.-Canadian border.

   

  During this exercise, 4 nuclear devices, 2 of which are rendered “safe” during the U.S. Department of Defense (DOD) Vital Archer Exercise, and one successful 10kt detonation in the NYC/NJ area, along with one smaller detonation on the U.S./Canadian border are to take place.

   

  Among the organizations involved are:

  – U.S. Department of Energy (DOE)

  – U.S. Department of Defense (DOD)

  – U.S. Domestic Nuclear Detection Office (DNDO)

  – U.S. Federal Bureau of Investigation (FBI)

  – U.S. Federal Emergency Management Agency (FEMA)

  – U.S. Northern Command (NORTHCOM)

  – State of New Jersey Office of Emergency Management

  – State of New York Office of Emergency Management

  – City of New York Office of Emergency Management

   

  The following document comes form The Nevada National Security Service. Their primary role with the government is to help ensure the security of the United States and its allies by supporting the stewardship of the nuclear deterrent, providing emergency response capability and training, and contributing to key nonproliferation and arms control initiatives.

  Will anything catastrophic happen during or after that window of time? Will North Korea really attack the U.S. mainland? Will someone else do so, and blame their overseas enemies?

  No one who knows the answers to these questions is willing to talk. For now, all we can do is watch, wait and listen.

  Don’t jump to fear and speculation, but don’t lie down or look away either.

  These will be trying times.

  *  *  *

  Full Gotham Shield 2017 Presentation below:

  

  

• Flying Is About To Get Even More Miserable…Well, At Least For Poor People

  At a time when you would think the airlines would be a little more image conscious, you know because of that whole beating customers and dragging them off the plane thing that United did, they’re apparently doubling down on efforts to make “Flying The Friendly Skies” the most miserable experience ever.  

  After years of finding new ways to charge for ‘perks’ that used to be standard (want to use our aisle to access your seat…that’ll be a $10 fee, please), according to the Wall Street Journal, airlines are getting ready to implement a whole new set of restrictions on their poorest customers.  So, for those of you who have grown accustomed to lavish perks like free overhead bin space, get ready for your new reality.

  Battling it out with discount carriers, the world’s biggest airlines are rolling out ultracheap economy-class tickets, or cutting back sharply on basic amenities for their lowest-paying customers. At the same time, they are pulling out the stops to lavish their premium fliers with more perks.

   

  American, United Continental, and Delta all now offer super-low fares, dubbed “basic economy,” that strip out even once-standard allowances, such as carry-on baggage or a choice of seat before boarding.

   

  Those are now extra for these ticket holders, who also generally board last. But the fares are competitive with discount airlines such as Southwest Airlines Co. A United basic economy ticket between Washington and Minneapolis for travel in early May was recently listed as low as $128, $20 less than a regular economy fare. Some of the cheapest fares passengers can get on discount carriers are for seats so basic they don’t recline even an inch.

   

  “When we look at economy, we are looking at a commodity product, without a doubt,” BA Chief Executive Officer Alex Cruz said in November.

  

   

  But, while while flying in the back of the plane is starting to feel a bit more like a cattle stampede than a pleasurable prelude to a vacation, flying in the front of the plane is about to get even more luxurious, including everything from fully-reclining seats to comforters from Saks Fifth Avenue…because a regular blanket just won’t work for some folks.

  But at the front of the plane, the same carriers are showering premium passengers with ever more comfort. Middle East and Asian airlines are among those leading the way, with U.S. carriers trying to catch up. American Airlines has upgraded its business class. Delta last year unveiled plans for business-class suites, effectively small cabins that can be closed off from others, with fully reclining seats. The suites should feature on planes this year.

   

  United on intercontinental routes is introducing an upgraded business class, called United Polaris, to try to keep pace with its nearest rivals. The cabin sports fully reclining seats, bedding by Saks Fifth Avenue and noise-canceling headsets. United is rolling it out on its San Francisco-Hong Kong route. A round-trip ticket for a May flight lists at about $5,000.

   

  British Airways, meanwhile, is spending about $500 million to upgrade its premium classes. BA, which popularized the fully reclining business-class seat in the mid-1990s, is planning a new business-class seat design.

  So while the ‘millionaire, billionaire, private jet owners’ are sleeping in first class…

  

   

  …we wish you main streeters the best of luck maintaining your sanity in ‘last class.’

  

  

  

• Paul Craig Roberts On President Trump's 'Disappearance'

  Authored by Paul Craig Roberts via The Strategic Culture Foundation,

  In my long experience in Washington, vice presidents did not make major foreign policy announcements or threaten other countries with war. Not even Dick Cheney stole this role from the weak president George W. Bush.

  But yesterday the world witnessed VP Pence threaten North Korea with war. “The sword stands ready,” said Pence as if he is the commander in chief.

  Perhaps he is.

  

  Where is Trump? As far as I can tell from the numerous emails I receive from him, he is at work marketing his presidency. Once Trump won the election, I began receiving endless offers to purchase Trump baseball caps, T-shirts, cuff-links, coffee mugs, and to donate $3 to be entered into a raffle to win some memorabilia. The latest offer is a chance to win one of “personally signed five incredible photographs of our historic and massive inauguration.”

  For Trump, the presidency is a fund-raising device. If his VP, National Security Advisor, Secretary of Defense, UN Ambassador, CIA Director, whoever, want to start wars wherever, that’s just more memorabilia to raffle off for a $3 donation.

  As a result of Trump’s failure to govern his own government, we have VP Pence telling Russia and China that there could be a nuclear exchange on their borders between the US and North Korea. Although Pence is not smart enough to know, this is not something Russia and China will accept.

  Washington worries about North Korea having nuclear weapons, but the entire world worries that Washington has nuclear weapons. And so many of them. World polls have shown that the majority of the world’s population are far more concerned about the threat to peace posed by Washington and Israel than by Iran, North Korea, Russia and China.

  Pence prefaced his “the sword stands ready” remark with “the United States of America will always seek peace,” which after Serbia, Somalia, Afghanistan, Iraq, Libya, Yemen, Pakistan, and Syria is as false a statement as it is possible to make. From Washington’s perspective it is always Washington’s victims that are “reckless and provocative,” never Washington.

  The US stands for war. If the world is driven to Armegeddon, it will be Washington, not North Korea, Iran, Russia, or China, that brings life on earth to an end.

  

  

• Is China Trying To (Slowly) Burst Another Stock Market Bubble?

  The pressure point in Asian stock markets this week has been the decline in Chinese equities (the biggest weekly drop in 4 months).

  

  Despite a stellar performance of the economy the outlook for the Shanghai Composite Index isn’t promising as the government is taking advantage of better growth to spur deleveraging.

  For a market relying more on liquidity than fundamentals, China’s worsening monetary conditions index suggests tough times ahead…

  

   

  As a reminder, the Shanghai Composite Index, notorious for its wild swings over the past two years, has gone 86 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992.

  

   The last 4 days have highlighted the unusual effect in Chinese stocks.. each time the Shanghai Composite dropped over 1% (red dotted line) it was miraculously lifted to ensure it closed with a loss less than 1%…

  

   

  As Bloomberg reports, authorities favor a steady stock market because it helps companies fund investment and repay debt by issuing new shares, which could help boost economic growth, according to Yin Ming, a vice president at Baptized Capital in Shanghai.

  “The national team is behind it,” Yin said. “State funds will likely continue to be a market stabilizer.”

  So one wonders, is China desperate to delever the speculative fervor in their markets… but do it just 1% at a time? Can the 'market' really be that well centrally planned? We will see…

  If the 6-month lag in Chines commodities is anything to go by, the breakdown in Chinese stocks is nowhere near over…

  

  

  

• "Everything's Worse" – Where India's Disintegration Is Set To Begin

  Authored by Jayant Bhandari via Acting-Man.com,

  Everything Gets Worse  (Part XII) –  Pakistan vs. India

  After 70 years of so-called independence, one has to be a professional victim not to look within oneself for the reasons for starvation, unnatural deaths, utter backwardness, drudgery, disease, and misery in India.

  Intellectual capital accumulated in the West over the last 2,500 years — available for free in real-time via the internet — can be downloaded by a passionate learner. In the age of modern technology, another mostly free gift from the West which has significantly leveled the playing field, societies that wanted economic convergence with the West, such as Japan, Korea, Singapore, HK, China, etc., have either achieved it rapidly, or have strongly trended toward it.

   

  

  More than 28,000 children less than six years of age have died in just one province, Madhya Pradesh, over the past year. Because these deaths were due to diseases resulting from malnourishment, the government attributed every single death to disease rather than malnourishment.

   

  Given that Indian prime minister Narendra Modi has been at the helm for only three years, it is hard to blame him in general for any of the above mentioned monstrosities marring daily life in India. The best the head of the executive of an extremely diverse and complicated country can achieve is to nudge the Titanic in the right direction.

  The problem is that Modi has actively sped the Titanic toward collision with an iceberg, from which he himself will not emerge unharmed. He must be blamed for his naiveté, his upside-down understanding of economics and a complete lack of awareness of the realities of life, his narcissism and obsession of making a hero out of himself, and an utter lack of self-respect that drives him to seek solace in Hindu fanaticism. He and his party have been a catalyst fanning the flames of nationalism and fanaticism among Indians.

   

  

  Farmers demonstrating in Delhi to point out their plight. More than 12,600 farmers and agricultural laborers committed suicide in 2015 in what is one of the world’s poorest countries. On average, life is worse for Indians than it is for Africans.

   

  However, sociopaths exist in every society. If you get rid of one, another one enters the scene. In the end, it is Indians who deserve to be blamed for elevating Modi and his BJP to their positions. In the end, it is Indians who deserve to be blamed for hollowing out and destroying institutions the British left behind over the past 70 years.

  In the irrational and tribal society of India, Modi perfectly symbolizes and unconsciously exploits the thinking process of the common man, who tends to deal with problems by doing even more of what created the problems in the first place.

  A rational person (particularly one whose perception is otherwise skewed by political correctness) faces a huge uphill task and high levels of frustration, when trying to comprehend the actions of irrational people and societies. He won’t be able to understand that the irrationality of some people is so pronounced it can keep them from connecting two simple dots right in front of them.

   

  

  Some 3,000 children die every day from illnesses related to poor diets. Of those who survive, 44% of the children under the age of 5 are stunted. 72% of infants and 52% of married women have anemia. With respect to this India is ranked on the same level as North Korea and Sudan.

  It is difficult or me to judge whether Pakistan is better or worse off by comparison, but I received many complaints in response to an earlier article in this series (in which I had presumed Pakistan to be somewhat worse off than India), mostly based on tribalism. But let’s try to bring some balance to the issue anyway.

  On the World Happiness Report, India is ranked in 122^nd position. Pakistan is ranked much higher, in 80^th  position. Pakistan’s  per capita GDP is US$1,550,  India’s is US$1,719. The difference is very small. Moreover, Pakistan has to spend a fortune to cater to refugees, to defend itself against problems from Afghanistan, as well as a much bigger foe, namely India. Pakistan also suffers from instability spilling over from Afghanistan and Iran.

  As a result Pakistan is spending a much higher proportion of its government revenue on the military than India. If the external conditions of the two countries were similar, Pakistan would presumably be richer than India.

  I also received several introspective messages from Pakistanis, who averred that Pakistan was descending into chaos, and similar statements were made by Indians as well. Most Pakistanis asked me to keep their names confidential, as speaking out against the Pakistani army or Islam could easily lead to unwelcome consequences such as beheading. A small minority in India is less concerned about speaking out, but this is changing quite rapidly.

  A silly, well-orchestrated routine that is conducted every day at Indo-Pak border. Ironically, both Indian and Pakistani forces work and practice this routine together, to keep it well-synchronized. The bravado and bravery is all superficial theater.

   

  Demonetization Pain Continues Unabated

  When Narendra Modi announced on 8th November 2016 that he was demonetizing 86% of the monetary value of all currency in circulation, he gave three major reasons for doing so: to end corruption, to end terrorism and to eliminate counterfeit currency. Ironically, all three are now in far worse condition than they were previously, and even worse than the predictions I made in this series of essays (Part XI is linked here).

  Many ATMs in India still dispense no cash. The economy is in shatters. This had to happen, as any new cash is rapidly moving under the carpets of the financial powerful that hoard currency. Small businesses are traumatized by the lack of access to cash – many are closing for good. People continue to avoid making non-essential purchases. Even food demand has failed to recover. Poor people very likely are still forced to go to bed half-hungry.

  No-one knows whether there are famines in parts of India, as none of the  mainstream media are covering the issue. Not unlike North Koreans or the Chinese during the times of Mao, Indians today, particularly members of the so-called educated class, simply cannot see what Modi or their nationalistic paradigm does not want them to see.

  Indian banks and other financial institutions are extremely unethical. Since privatization was implemented in the 1990s, they have charged fees and commissions for accounts that were never agreed upon. Indians never fight, so this continues. After the demonetization exercise, these mysterious charges have started to appear more often.

  Then they deduct certain services and financial taxes, and most people don’t make the effort to try to understand them. Indians are getting very tired of the banks – not for moral, but simply for financial reasons. Bank websites are extremely unwieldy. They require a sequence of passwords and OTPs (one time pad codes), which have an automatic expiry date.

  Getting the whole sequence right to make an online payment without having these websites freeze during the procedure leaves one with a sense of accomplishment. Most people prefer to walk down to their banks to get bank officials to perform such online transactions. India is simply not ready for the digital age. This experiment in going cashless will end in a disaster.

  Similar to every tyrant, Modi likes to think that tax collection should be at the heart of society. He imagines a society in which subjects dance around the state. The problem is, one can perfect the tax system or minimize corruption, but with a per capita GDP  of $1,718, India simply does not have the required productivity.

  Bank charges, rapacious tax authorities and massive amounts of time lost in dealing with the lack of cash have hurt whatever little productivity the Indian economy may have had. And by forcing digitalization, Modi has merely shifted liquidity from the informal to the formal sector.

  Even in the western world, most big corporations are in bed with governments. In India, romping in bed with the State is all they ever do. For the moment, these corporations are huge beneficiaries of shift of resources to the banking system.

  But without the spine that is the informal sector, the formal sector cannot benefit for very long. Eventually even the formal economy will succumb and take a massive hit.

   

  

  Bank credit growth in India plummets to 60 year lows.

   

  Corruption is bigger today, with most people complaining that they have to pay almost twice as much as usual in bribes, as bureaucrats and politicians try to make up for any real or assumed loses they faced as a result of the demonetization process. Counterfeiting of banknotes is a bigger problem today than it likely ever was.

   

  Kashmir – Where India’s Disintegration Is Set to Begin

  The last professed reason for Modi’s demonetization decree was to end terrorism and to solve the problems in Kashmir. The situation in Kashmir has deteriorated rapidly, while the law and order situation is generally worsening around the country, as vigilantes are given free reign.

  An African student in India being thrashed merely for being African. Racism against Africans is rampant in India, and the hostility is growing.

  Sacred cow enforcement squad: Cow vigilantes have become a regular feature of the Indian landscape, with Muslims and lower-caste people being killed and thrashed on a regular basis (one of the five men beaten up in this video later died). The Muslim community is increasingly isolated. This cannot end well in a country with the world’s second biggest Muslim population.

   

  

  Hindu Yuva Vahini, a group of fanatics, founded by none other than the current Chief Minister of Uttar Pradesh, Yogi Adityanath, roaming freely, with swords drawn (UP is India’s most populous state with nearly 200 million inhabitants). Once the genie of lawlessness is out of the bottle in this irrational society, it will be centuries before it can be put back in again. This is a disaster waiting to happen.

   

  Immediately after his appointment, Yogi Adityanath created “Anti-Romeo” squads, whose job is to harass any couples deemed to be unmarried. In spite of the fact that the police has no such constitutional authority, the courts have been silent spectators. Vigilante Hindu fanatics have even dragged couples from private properties to the police station. Instead of police charging these fanatics, they end up interrogating the couples dragged to the station. As I have said repeatedly, only hollowed out structures remain of the institutions the British left behind.

  There has been an unprecedented increase in human rights violations by the Indian army in recent days in Kashmir

   

  Another short video showing the Indian army in action in Kashmir

  The Indian army recently used a man as a human shield in Kashmir. Not only celebrities and journalists voiced their approval, India’s Attorney General, one of the main guardians of the law, justified it by saying: “peculiar situations require peculiar measures”.

   

  One must reflect on what it means if the country’s Attorney General has no clue what the rule of the law actually means. Voting was almost non-existent in recent elections. The army is stressed out and desperate. Those not in Kashmir and with no skin in the game happily pass judgment from their couches.

  There is no political mechanism in place for Kashmir to secede. Secession through violence – which looks increasingly inevitable, particularly in view of Modi’s heavy-handedness  – will be extremely chaotic. Its reverberations will be heard across the world, and might start the fragmentation of India as a political entity.

  

  

• Failing Malls Turn Empty Parking Lots Into Carnivals To Generate Cash

  It should come as no surprise that America’s malls, the wonderlands of the 80s, are in big trouble.  After slowly losing market share to online competition for years, brick-and-mortar retailers have finally succumb to changing consumer habits which has resulted in a massive surge in bankruptcies and store closings.

  Of course, as we’ve pointed out before, mall owners have tried just about everything to fill their empty spaces including the addition of grocery stores, doctors’ offices and even high schools. 

  But while most mall owners have been trying to figure out how to fill up the inside of their stores, they apparently overlooked another very ‘valuable’ asset:  their empty parking lots.

  With customer traffic sagging, U.S. retail landlords are using their sprawling concrete lots to host events such as carnivals, concerts and food-truck festivals. They’re aiming to lure visitors with experiences that can’t be replicated online — and then get them inside the properties to spend some money.

   

  “Events draw people to come to the shopping center,” said Keith Herkimer, whose company, KevaWorks Inc., is working with big landlords including GGP Inc. and Simon Property Group Inc. to produce outdoor events. “They generate revenue for the owner and offer a chance for cross-promotion, so they can try and drive more customers into the stores.”

  

   

  The idea, obviously, is to attract customers for experiences that can’t be replicated online with a focus on everything from movies nights to carnivals.

  Retail landlords have already made a push toward experience-driven offerings by adding restaurants, movie theaters and activity centers for children. Many malls are also adding rotating stores around for only a short time — known as pop-up shops — that are meant to attract young customers who see shopping as an event.

   

  Now, events are reaching beyond the malls themselves. Herkimer’s task is to bring crowds to parking lots with events that generate as much as $60,000 a week for mall owners from the largest outdoor events.

   

  The idea is gaining traction. Next month, Simon Property is having the first carnival in its Round Rock Premium Outlets parking lot, about 20 miles (32 kilometers) north of Austin, Texas. Similar events are being held for the first time at locations such as Central Mall in Port Arthur, Texas, managed by Jones Lang LaSalle Inc., and a Cheyenne, Wyoming, mall owned by CBL & Associates Properties Inc. In July, Simon Property’s Orland Square Mall, southwest of Chicago, will be holding its first parking-lot food-truck festival, with plans for live music performances, Herkimer said.

  

   

  Meanwhile, REIT investors are finally starting to understand that while carnivals may help to pay the electricity bills of America’s malls they do little to help generate a return on the hundreds of millions of dollars worth of retail square footage that lies empty inside the stores.

  

  

  

• "Total Chaos" – Cyber Attack Feared As Multiple Cities Hit With Simultaneous Power Grid Failures

  Authored by Mac Slavo via SHTFplan.com,

  

  The U.S. power grid appears to have been hit with multiple power outages affecting San Francisco, New York and Los Angeles.

  Officials report that business, traffic and day-to-day life has come to a standstill in San Francisco, reportedly the worst hit of the three major cities currently experiencing outages.

  Power companies in all three regions have yet to elaborate on the cause, though a fire at a substation was the original reason given by San Francisco officials.

  A series of subsequent power outages in Los Angeles, San Francisco, and New York City left commuters stranded and traffic backed up on Friday morning. Although the outages occurred around the same time, there is as of yet no evidence that they were connected by anything more than coincidence.

   

  The first outage occurred at around 7:20 a.m. in New York, when the power went down at the 7th Avenue and 53rd Street subway station, which sent a shockwave of significant delays out from the hub and into the rest of the subway system. By 11:30 a.m. the city’s MTA confirmed that generators were running again in the station, although the New York subways were set to run delayed into the afternoon.

   

  

   

  Later in the morning, power outages were reported in Los Angeles International Airport, as well as in several other areas around the city.

   

  

   

  Via : Inverse

   

  The San Francisco Fire Department was responding to more than 100 calls for service in the Financial District and beyond, including 20 elevators with people stuck inside, but reported no immediate injuries. Everywhere, sirens blared as engines maneuvered along streets jammed with traffic.

   

  

   

  Traffic lights were out at scores of intersections, and cars were backing up on downtown streets as drivers grew frustrated and honked at each other.

  Via: SF Gate

  The cause of the outage has not yet been made clear, though given the current geo-political climate it is not out of the question to suggest a cyber attack could be to blame. It has also been suggested that the current outages could be the result of a secretive nuclear/EMP drill by the federal government.

  As we have previously reported, the entire national power grid has been mapped by adversaries of the United States and it is believed that sleep trojans or malware may exist within the computer systems that maintain the grid.

  In a 2016 report it was noted that our entire way of life has been left vulnerable to saboteurs who could cause cascading blackouts across the United States for days or weeks at a time:

  It isn’t just EMPs and natural disaster that poses a threat to the grid, but there is also the potential for attacks on individual power substations in the vast network of decentralized and largely unguarded power grid chain. A U.S. government study established that there would be “major, extended blackouts if more than three key substations were destroyed.”

   

  Whether by criminals, looters, terrorists, gangs or pranksters, it would take very little to bring down the present system, and there is currently very little the system can do to protect against this wide open threat.

  Whether the current outages are the result of a targeted infrastructure cyber attack or simply a coincidence, most Americans think the impossible can’t happen, as The Prepper’s Blueprint author Tess Pennington highlights, a grid-down scenario won’t just be a minor inconvenience if it goes on for more than a day or two:

  Consider, for a moment, how drastically your life would change without the continuous flow of energy the grid delivers. While manageable during a short-term disaster, losing access to the following critical elements of our just-in-time society would wreak havoc on the system.

   

  • Challenges or shut downs of business commerce
  • Breakdown of our basic infrastructure: communications, mass transportation, supply chains
  • Inability to access money via atm machines
  • Payroll service interruptions
  • Interruptions in public facilities – schools, workplaces may close, and public gatherings.
  • Inability to have access to clean drinking water

  It is for this reason that we have long encouraged Americans to prepare for this potentially devastating scenario by considering emergency food reserves, clean water reserves and even home defense strategies in the event of a widespread outage. The majority of Americans have about 3 days worth of food in their pantry. Imagine for a moment what Day 4 might look like in any major city that goes dark.

  This exclusive clip from American Blackout shows what an American Blackout might look like:

  

  

• The Simple Reason Why A Second American Civil War May Be Inevitable

  Authored by Daniel Lang via SHTFplan.com,

  

  America has always had its divisions, and Americans have never really been a monolith. We’ve always been a nation of many nations. The culture of New England is different from the culture of the Deep South, which is different from the cultures in the West Coast or the Midwest. People living in the cities have different beliefs than people who live in the countryside. Within those areas, there are ethnic, linguistic, and religious enclaves. It’s always kind of been like that (probably to a lesser degree in the past), and somehow we’ve been able to find enough common ground to keep this country together for more than a century.

  However, something has changed. You can feel it in the air. Our nation has clearly never been this divided since the Civil War. A lot of people noticed it after the last election, but the truth is that these divisions have been deepening for decades, and they’re just now reaching a very noticeable breaking point. That’s obvious enough when you look at how the left and the right have been going at each other. It used to be a war of words, but it’s turning into something very dark.

  Consider what happened last week in Berkeley after Trump supporters and counter protesters clashed for the third time. 21 people were arrested and 11 were injured (that we know of), six of who had to be taken to the hospital. At least one person was stabbed. The police confiscated confiscated knives, stun guns, and poles. One Trump supporter admitted to being surrounded, pepper sprayed, and beaten with sticks by a mob of “protesters.”

  But wait, that’s not the dark part. After these groups clashed, the leftist protesters took to Reddit and admitted that they lost this particular battle (I can’t believe I’m using the word “battle” to describe it), and that it was time for them to attain more combat training and better weapons, including firearms.

  Do you see what’s going on here? Conservative demonstrations, which used to be placid affairs (remember the Tea Party protests?) are now turning violent as conservatives grow tired of restraining themselves, and are no longer afraid to hit back. Liberal demonstrators are responding by ratcheting up the level of force that they’re going to bring to the next street battle. It’s a tit for tat that keeps escalating, and I shudder to think of where it’s going to end up.

  Honestly, I think we’re in the early stages of a second civil war. I can’t say what it’ll look like precisely, but I can tell you that our nation is on this path, and it’s not clear how we can get off of it. In fact, I fear that it may be inevitable, and there’s a very simple reason why.

  It’s because Americans have been self-sorting themselves along geographic and political lines for a long time. A book titled “The Big Sort” made light of this trend back in 2008.

  Basically what’s going on, is that Americans are moving to communities that align more with their politics. Liberals are moving to liberal areas, and conservatives are moving to conservative communities. It’s been going on for decades. When Jimmy Carter was elected in 1976, 26.8% of Americans lived in landslide counties; that is counties where the president won or lost by 20% of the vote.

  By 2004, 48.3% of the population lived in these counties. This trend continues to worsen. As Americans move to their preferred geographic bubbles, they face less exposure to opposing viewpoints, and their own opinions become more extreme. This trend is at the heart of why politics have become so polarizing in America.

  We’re also seeing the same trend emerge online with social media. Despite the fact that the internet allows us to be exposed to more opinions that ever before, people choose to follow online voices that they already agree with. They’re slipping into digital bubbles that are comparable to their geographic bubbles.

  This trend is irreversible as far as I can tell. That’s because it’s tied to innovation. As our country became more interconnected with roads and Americans gained more mobility, we chose to move to like-minded places. We’re given the internet, the greatest source of information in human history, and we use it to seek out only the information that reinforces our current beliefs.

  We’re self-sorting at every level. Because of this, Americans are only going to grow more extreme in their beliefs, and see people on the other side of the political spectrum as more alien.

  You can see how this is creating the perfect breeding ground for a real, physical war. The polarization makes it easier to dehumanize the other side. The self-sorting creates definable geographic boundaries that are necessary for a war. It spawns two sides with beliefs that are so divergent, that they cannot coexist.

  We’re becoming two distinct nations with two competing visions for what the country should be. Two visions that are diametrically opposed. We used to be a nation of many nations that was held together, because there was still some common ground on what it means to be an American above all else. Now we can’t even agree on that.

  Once the last shreds of common ground and understanding dissipate, a moment that is rapidly approaching, another civil war will be impossible to avoid. I wish I knew what the solution is, but I don’t. All I can say is, unless Americans go out of their way to listen to people on other side, whatever that side may be, there’s going to be a lot of blood in the streets.

  

  

• Eight Venezuelans Electrocuted To Death While Looting Bakery Amid Massive Protests

  Venezuela’s ongoing protests against the Maduro regime took tragic turn when at least 12 people were killed overnight during looting and violence in Venezuela’s capital. Most of the deaths took place in El Valle, a working class neighborhood near Caracas’ biggest military base where opposition leaders say a group of people were hit with an electrical current while looting and trying to steal a refrigerator from a bakery.

  

  The chaos turned deadly when looters entered a bakery protected by an electric fence and tried to remove a refrigerator. The accounts varied, but one opposition leader said 13 people were hit with an electrical current after tossing containers filled with water and making contact with the refrigerator’s power cord.

  
  Criminal investigators look for evidence in front of a bakery, after it was looted

  Daniela Alvarado, 25, who sells vegetables in the El Valle area, said the looting on Thursday night began after police officers fired tear gas and buckshot at demonstrators blocking a street with burning tires.

  “People starting looting the businesses and yelling that they were hungry and that they want the government out,” said Alvarado. “We’re afraid (the stores) are going to run out of everything, that tomorrow there won’t be any food.”

  “Yesterday around 9 or 10 (p.m.)things got pretty scary, a group of people carrying weapons came down … and started looting,” said Hane Mustafa, owner of a small supermarket in El Valle cited by Reuters, where broken bottles of soy sauce and ketchup littered the floor between bare shelves.

  
  Empty shelves, a day after a night of looting in El Valle neighborhood in Caracas

  “The security situation is not in the hands of the government. We lost everything here,” said Mustafa, who said he could hear the looting from his home, which is adjacent to the store. Dozens of businesses in the area showed signs of looting, ranging from empty shelves to broken windows and twisted metal entrance gates.

  According to AP, the Public Ministry said the violence left 11 people dead in El Valle, all men between the ages of 17 and 45. Another death was reported east of Caracas in El Sucre. Six other people were injured. “This was a war,” said Liliana Altuna, whose butcher shop was ransacked by looters armed with guns who grabbed everything in sight.

  

  
  A demonstrator throws a molotov cocktail during clashes with riot police

  Opposition leaders accused the government of repressing protesters with tear gas and rubber bullets but standing idly by as businesses were looted. Meanwhile, Foreign Minister Delcy Rodriguez pointed the finger at the opposition, saying armed groups controlled by the government’s foes were responsible for the attack at the hospital.

  “We reject and do not accept those irresponsible declarations,” said Henrique Capriles, a former opposition candidate for president who the government recently barred from running for public office.

  Nine other people have been killed in violence associated with a wave of anti-government demonstrations in the past three weeks in which protesters have clashed with security forces in melees lasting well into the night.  Nine other people have been killed in violence associated with a wave of anti-government demonstrations in the past three weeks in which protesters have clashed with security forces in melees lasting well into the night.

  
  People holding a placard that reads ‘No more deaths, Maduro’

  The violence began Thursday night and stretched into Friday in El Valle, an area historically known as a hot spot for political protest. Witnesses said masked looters wielding knives and guns descended on an area known as “the little market” filled with bakeries, supermarkets and butcher’s shops.

  “They left us with nothing,” said Manuel Martinez, who was directing cleanup and repairs at a destroyed grocery store. “What they did wasn’t because of hunger,” he added. “It’s vandalism.”

  * * *

  Earlier Friday, officials said that one of the dead was Mervins Guitian. The young Venezuelan man was fatally shot when he was returning home late from work Thursday and got caught in the middle of late-night street clashes. Vicente Paez, a local councilman, said Guitian was an employee of a Caracas-area city governed by an opposition mayor but didn’t join the protests. It wasn’t clear who shot him and there was no immediate comment from authorities.

  Venezuelan social media was ablaze late into the night with grainy cellphone videos of light-armored vehicles plowing down dark streets to control pockets of protesters who set up burning barricades in several neighborhoods.

  

  
  Demonstrators run away from tear gas during clashes with police

  Vice President Tareck El Aissami said Friday the country is facing an “unconventional war” led by opposition groups working in concert with criminal gangs. He said opposition claims government forces were responsible for launching tear gas at the maternity hospital were another attempt to demoralize a people who have “decided to break ties with the bourgeoisie forever.”

  
  Police fire tear gas toward opposition supporters during clashes

  Meanwhile opposition members said they have no intention of easing up on protests. “Twenty days of resistance and we feel newly born,” opposition lawmaker Freddy Guevara said at an outdoor news conference Thursday as residents looking out from balconies in a neighborhood at the heart of the protest movement cheered loudly in support.

  The next planned protest is Saturday, when opponents are being asked to dress in white and march silently to commemorate the victims of the demonstration. Sit-ins to block major highways are planned for Monday.

  * * 

  As reported on Friday, General Motors announced early Thursday that it was closing its operations in Venezuela after authorities seized its factory in the industrial city of Valencia, a move that could draw the Trump administration into the escalating chaos engulfing the nation. A number of major Latin American governments, including Mexico, Argentina and Brazil, called on Venezuela to take steps to increase democratic order and halt the violence that has been swirling around the protests.

  The recent controversial, and subsequently reversed, Supreme Court ruling reinvigorated Venezuela’s fractious opposition, which had been struggling to channel growing disgust with Maduro.

  Opponents are pushing for Maduro’s removal through early elections and the release of dozens of political prisoners. The government last year abruptly postponed regional elections that the opposition was heavily favored to win and it cut off a petition drive aimed at forcing a referendum seeking Maduro’s removal before elections scheduled for late next year.

  But the government hasn’t backed down. Already drawing criticism for the GM seizure, Maduro announced late Thursday that he wanted an investigation into cellphone operator Movistar for allegedly being part of the “coup-minded march” organized by his adversaries Wednesday. That march was the largest and most dramatic the country has seen in years. He said the subsidiary of Spain’s Telefonica “sent millions of messages to users every two hours” in support of Wednesday’s protests.

  As tensions mount, the government is using its almost-complete control of Venezuela’s institutions to pursue its opponents. On Wednesday alone, 565 protesters were arrested nationwide, according to Penal Forum, a local group that provides legal assistance to detainees. It said 334 remained in jail Thursday. In light of the 100,000 political opponents arrested or fired by Turkey’s president Erdogan ever since last summer’s “failed coup” attempt, Maduro may have to pick up the pace.

  Opposition leaders have promised to keep up their protests, demanding that Maduro’s government call general elections, free almost 100 jailed opposition activists and respect the autonomy of the opposition-led Congress. They are calling for community-level protests across the country on Friday, a white-clad “silent” march in Caracas on Saturday to commemorate those killed in the unrest, and a nationwide “sit-in” blocking Venezuela’s main roads on Monday.

  With protests now assured on a virtually daily basis, what little was left of the economy is assured to grind to a halt. The only question is how much longer can the protests continue before the army flips its allegiance from the regime, and Maduro is replaced.

  

  

Digest powered by RSS Digest

• 10 Selfless Acts Amid Terrible Tragedies That Will Restore Your Faith In Humanity

  Authored by Joshua Krause via ReadyNutrition.com,

  

  Preppers aren’t exactly known for having much faith in humanity. If they did, they probably wouldn’t become preppers in the first place. They know how people behave when the chips are down. They know how quickly civilized people can turn into vicious animals when they haven’t eaten for a few days. So they stock up on the weapons they think will protect them from these animals, and the food they need to keep themselves from turning into animals themselves.

  Of course, they’re not crazy for trying to be prepared. We turn on the news or check our social media feeds every night, and what do we see? A cavalcade of horror. Terrorist attacks, mob violence, selfishness, ignorance, and flippant threats of war. What would really be crazy, is to see all of that on a daily basis and not want to be prepared.

  However, there’s a flip-side to these behaviors that everyone, prepper or not, needs to understand. On the one hand; yes, we’re an incredibly violent and cruel species that is capable of mind-boggling horrors when we’re trying to survive. Hell, some of the things we do when we aren’t desperate are still nightmare inducing. But what most people forget is that in our darkest moments, we’re capable of immeasurable acts of compassion and altruism.

  That’s the unique duality of our species; and it’s a duality that totally separates us from every other creature on this planet. When we’re bad, we’re worse than any animal. That’s why we prep. But at our best, people are capable of awe-inspiring acts of kindness. Your average individual human is capable of more mercy and selflessness than the members of most entire species put together.

  10 Acts of Human Kindness to Restore Your Faith in Humanity

  And in case you’ve forgotten that fact, I have a few reminders for you. Below are ten examples of people who were utterly selfless in the midst of terrible tragedies and disasters.

  Ken Bellau

  

  Image courtesy of People.com

  Hurricane Katrina still haunts the people of New Orleans. To this day much of the city is still in ruins, and by most estimates, between 1,200 and 1,800 people died after the levees broke. However, the death toll might have been significantly higher if not for the efforts of one man.

  Ken Bellau is a 10th generation New Orleans resident who took it upon himself to rescue his stranded neighbors. He arrived in the city from an overseas trip just after the storm hit. After commandeering an abandoned fishing boat, he spent three weeks searching for people and pets, and giving them rides to higher ground. For much of this ordeal Ken was working alone. Aside from the typical hazards that you’d expect someone to deal with in these circumstances, he faced threats from criminals who wanted to take his boat, and dodged bullets from suspicious residents who thought he was a looter.

  Eventually Ken made contact with the National Guard. Between his boat and his knowledge of the area, he proved to be a valuable asset for the Guards’ relief effort, and went on numerous rescue missions with them. It’s estimated that his efforts helped save at least 400 people.

  Reverend Bennie Newton

  

  Over the past couple of years there have been many notable riots in the United States, but they all pale in comparison to the 1992 Rodney King riots in Los Angeles. It’s estimated that between April and May of 1992, 55 people were killed in these riots, and over 2,000 were injured. It was so bad that order wasn’t restored until the Marines and the National Guard showed up.

  Amid that chaos, was a young Guatemalan immigrant and self-employed construction worker by the name of Fidel Lopez. On April 29th, he was pulled out of his truck by several rioters, who proceeded to beat him to within an inch of his life. Once unconscious, the thugs attempted to slice off one of his ears, spray painted his torso and genitals black, and doused him in gasoline.

  What happened next was unexpected to say the least. A priest by the name of Reverend Newton arrived on the scene after hearing about some of the violence being carried out in the area. He waded through the violent mob and shielded Lopez. Clad in a priest’s garb and carrying a bible in one hand, he shouted to the crowd “kill him, and you’ll have to kill me, too!” Surprisingly, the mob backed off. The reverend carried Lopez to his truck, and drove him to the hospital.

  The Canadian Town of Gander

  

  9/11 is a moment in history that every American vividly remembers. We remember the planes exploding, the desperate office workers plunging to their deaths, the towers falling, and the dust caked pedestrians fleeing for their lives. Unfortunately, what we don’t remember is the boundless hospitality of one small Canadian town in Newfoundland.

  After the attack, all civilian air traffic over the United States and Canada was ordered to be grounded. 38 planes carrying nearly 7,000 people from around the world were forced to land at the airport outside of Gander, a town of 10,000 people. Obviously, a town of that size didn’t have nearly enough hotel rooms to house all of those people.

  So the people of Gander and other nearby towns simply opened their doors to these complete strangers and housed them. The locals ignored the advice of the police, who feared that some of the stranded passengers could be terrorists. Nearly every church, school, and restaurant pitched in by housing or feeding them, often free of charge. Local bus drivers ended a strike to help drive these strangers around, and pharmacies in the town provided medication, also free of charge. This went on for four days until the airspace was reopened, and everyone went home with fond memories of Canadian hospitality.

  Liviu Librescu

  

  Liviu Librescu was a 76-year-old Romanian-American scientist, aeronautical engineer, and professor at Virginia Tech, and he was no stranger to the horrors that his fellow humans were capable of. That’s because he was a Jew who had survived the Holocaust as a child. In his final moments, he came face to face with evil one last time, and didn’t hesitate to sacrifice himself for the lives of everyone around him.

  On April 16th, 2007, a student of Virginia Tech by the name of Seung-Hui Cho entered the campus with two pistols and opened fire, eventually killing 33 people. When he arrived at Librescu’s classroom, the professor and two other students named Zach Petkewicz and Derek O’Dell, blocked the doors so that the gunman couldn’t get in. This gave all but one of his students enough time to flee the classroom through a nearby window, before Cho shot and killed them.

  Hugh Thompson

  

  The Vietnam War is widely considered to be the darkest chapter in American military history, and by far its darkest moment was the My Lai massacre. On March 16th, 1968, US soldiers with the 23rd Infantry Division, 11th brigade, massacred between 347 and 504 unarmed civilians in South Vietnam. If you can believe it, the massacre could have been far worse if it wasn’t halted by one man.

  Hugh Thompson was an Army helicopter pilot who realized what was happening early on in the massacre, after a seeing several dead civilians from the air during a reconnaissance mission. He landed his helicopter twice to investigate the dead, before realizing that it was American soldiers who were responsible for the killings. After failing to talk sense into a commander who had ordered the massacre, he spent the rest of the day directing and evacuating civilians away from the carnage, and at one point even threatened to open fire on US soldiers who were about to kill several civilians. After evacuating a wounded child, he reported the incident to his superiors, who ordered troops on the ground to stop the killings.

  For his efforts, Thompson was shunned by his peers in the military for many years. In 1969 he was called to testify in Congress about the incident, and was chastised by Congressmen with the House Armed Services Committee, who felt that he should have been court martialed for threatening to open fire on American troops. It wouldn’t be until 30 years later that he was awarded a medal for his part in ending the massacre.

  Father Thomas Byles

  

  The sinking of the Titanic is a testament to that fact that in previous generations, altruism was a far more common trait. As the ship went down, hundreds of men insisted on staying aboard, and letting as many women and children as possible get on the few remaining life boats. It would be difficult to single out any of the heroic souls that went down with that ship.

  But if you had to, a good choice would be Father Thomas Byles. The Catholic priest was on his way to New York to preside over his brother’s wedding when the Titanic struck an iceberg. As the crowds of desperate passengers swelled toward the lifeboats, he refused several invitations to leave the ship. Instead he helped other passengers find lifeboats, and stayed on board with a hundred trapped individuals. He prayed with them, heard their confessions, and gave them their last rites until the ship finally sank. His body was never recovered. Byles has since been recommended for sainthood by the Catholic Church.

  The Choctaw Nation

  

  The Cork Statue that pays tribute to the Choctaw Tribe’s generosity during the Irish Famine.

  The Irish famine was one of the most devastating disasters of the 19th century. Within seven years, a million people starved to death and another million emigrated. Millions more would flee the country in the decades that followed. To give you an idea of how devastating it was, the population of Ireland still hasn’t recovered from the famine.

  Amid this tragedy, countless organizations in the United States collected donations and sent them to Ireland to help alleviate the crisis. But perhaps none were as impressive as the $170 that was raised by members of the Choctaw tribe of Native Americans, and sent to a famine relief organization. That may not sound like much, but adjusted for inflation it amounts to thousands of dollars.

  Still, why was their donation so impressive? At the time, the Choctaw tribe were living in a reservation in Oklahoma. 16 years earlier in 1830, they had been forced from their homes and sent on the trail of tears. Half of the 21,000 Choctaws who embarked on the journey died. It’s safe to say that by 1847 they probably weren’t in much better shape financially speaking, and yet they still felt compelled to raise what little funds they had for the relief effort. That’s because they felt an affinity for the Irish, who like the Choctaw, had also enduring starvation, as well as cultural suppression by their government. The Choctaw relief effort has since been commemorated on multiple occasions in Ireland.

  The Institute of Plant Industry

  

  Image source https://cdn.rbth.com

  Don’t let the innocuous title fool you. If nothing you read before was able to restore your faith in humanity, this story will.

  The Institute of Plant Industry was a Soviet research center, and was once the largest seed bank on Earth. It was home to nearly 400,000 seeds and other plant samples that had been painstakingly collected from around the world. The mission of the institute, was to develop new plant strains that would alleviate hunger worldwide.

  Unfortunately, the institute was located in the city of Leningrad during World War Two. In case you’re not familiar with what occurred there, what happened to Leningrad during the war was downright apocalyptic. For nearly two and half years the city was blockaded by a German siege, which led to the deaths of 1.5 million civilians and soldiers. The siege of Leningrad has been called the most destructive event to ever occur in a modern city, and the most deadly siege in human history. The city became a hell on earth, where starvation and predatory cannibalism were rampant.

  So what do you think a dozen scientists holed up in that research center would do? I can tell you what normal, sane people would do. They’d probably give up their scientific mission, and begin consuming the treasure trove of edible seeds that were stored there. Certainly there were enough seeds to keep them fed for at least a few months, if not the entire duration of the siege.

  Instead, the scientists refused to eat their samples. They guarded the seeds throughout the siege and kept their seed bank a secret, knowing what would happen if any of the starving residents of the city found out about the institute. They watched over the seed bank in shifts, usually two or more at a time to ensure that no scientist was left alone with the seeds, and secretly smuggled samples out of the city. It’s believed that none of the samples were tampered with by the scientists. In the end, nine of the them starved to death while surrounded by perfectly edible food, in an effort to alleviate world hunger for future generations.

  Takeshi Miura and Miki Endo

  

  Image courtesy of rt.com

  These days, when most people hear about the Fukushima disaster, they tend to think about the TEPCO nuclear power plant that was destroyed by the tsunami. To this day the news still periodically reports on the situation at the power plant. However, most people outside of Japan have forgotten about the impressive heroics that were displayed by ordinary Japanese citizens before the plant melted down.

  Of those heroes were Takeshi Miura and Miki Endo, two city workers who stuck to their posts as the tsunami approached. They were working in a multi-story disaster preparedness building, and were responsible for warning civilians and directing them to higher ground through a public broadcasting system. They knew that the tsunami was going to be taller than the office they resided in, on the second floor of the building. But as it neared they stayed on that floor rather than fleeing to the roof, so that they could give one last announcement to the city.

  Unfortunately that final message kept them from reaching higher ground in time. The tsunami washed out the second floor of the building, killing them both. Their bodies have never been found.

  Lieutenant Friedrich Lengfeld

  

  After being inundated with movies, documentaries, and video games about World War Two for generations, Americans have developed a very black and white view of the soldiers who fought for Nazi Germany. We tend to think that everyone who fought for Germany was a goose stepping monster, and forget that their military was staffed by millions of ordinary people who were either brainwashed or coerced into fighting. We forget that so many of them were just regular human beings, not caricatures.

  One of those soldiers was 23-year-old Lt. Friedrich Lengfeld, a Wehrmacht company commander who took part in one of those most heartbreaking acts of altruism during the war. Lengfeld was responsible for defending a heavily fortified position during the Battle of Hürtgen Forest. In early November of 1944, his unit had suffered heavy casualties while fighting multiple American attacks. His company was depleted, and suffering from both the elements and malnutrition.

  On November 10th, the Americans attacked and retreated once again, but this time they accidentally left someone behind. One of their soldiers was injured after straying into a nearby minefield. As he cried out for help, Lengfeld ordered his troops not to open fire on any Americans who came back to retrieve their comrade. Hours passed with no relief in sight. He couldn’t take the weakening cries of help any longer, so Lengfeld decided to conduct his own rescue mission with the help of several medics.

  He walked through the minefield on what he thought was a safe path, but accidentally triggered an anti-personal mine that ripped through his legs. He later died at a first aid station. The fate and identity of the American soldier has never been uncovered. However, the sacrifice and humanity of Lengfeld was honored with a memorial constructed in the Hürtgen Forest by American veterans in 1994.

  A Civilization Worth Saving

  Frankly, it’s a shame that the ugliness of our species receives so much more attention than our acts of mercy, compassion, and sacrifice. It’s easy for people to assume that when disaster strikes, society will immediately turn into a free for all, where everyone acts in their own self-interest at the expense of everyone else. The truth of the matter, is that for every selfish person in the world who will murder and steal to get by for another day, there is always someone else who won’t hesitate to sacrifice everything for a complete stranger. It’s important to remember that, and there’s a very good reason why.

  You know this civilization that we (justifiably) fear may collapse one day? If not for our inherent altruism we wouldn’t have a civilization worth worrying about to begin with. It’s our desire for everyone to succeed and prosper that binds society, and keeps it from sinking into the depths of chaos. So the next time you think the world is turning upside down and evil is running rampant, try to remember these selfless people I just described. And more importantly, try to be more like them. It’s the only thing standing between our most virtuous acts, and our most wicked impulses.

  

• In Which States Do Most Millennials Live With Their Parents?

  Just a few short decades ago America’s youth was highly encouraged by eager parents to become self-sufficient by the ripe old age of 18.  Today, the mere suggestion of such a thing could land unsuspecting parents in prison for ‘triggering’ their offspring with malicious ‘hate speech.’

  And, as a new study from the Census Bureau points out today, the changing dynamics are readily apparent in the latest household survey data which shows that more millennials are living at home with mom today than any other living arrangement.  Here are some of the key takeaways:

  • More young people today live in their parents’ home than in any other arrangement: 1 in 3 young people, or about 24 million 18- to 34-year-olds, lived in their parents’ home in 2015.
  • In 2005, the majority of young adults lived independently in their own household, which was the predominant living arrangement in 35 states. A decade later, by 2015, the number of states where the majority of young people lived independently fell to just six.
  • Most of today’s Americans believe that educational and economic accomplishments are extremely important milestones of adulthood. In contrast, marriage and parenthood rank low: over half of Americans believe that marrying and having children are not very important in order to become an adult.
  • Young people are delaying marriage, but most still eventually tie the knot. In the 1970s, 8 in 10 people married by the time they turned 30. Today, not until the age of 45 have 8 in 10 people married.
  • More young men are falling to the bottom of the income ladder. In 1975, only 25 percent of men, aged 25 to 34, had incomes of less than $30,000 per year. By 2016, that share rose to 41 percent of young men. (Incomes for both years are in 2015 dollars.)
  • Between 1975 and 2016, the share of young women who were homemakers fell from 43 percent to 14 percent of all women aged 25 to 34.
  • Of young people living in their parents’ home, 1 in 4 are idle, that is they neither go to school nor work. This figure represents about 2.2 million 25- to 34-year-olds.

  

   

  To our complete ‘shock’, parents living in liberal states like NJ, CT, NY and CA were most likely to provide ‘safe spaces’ for their unemployed millennials to play video games.  In fact, 7 out of the top 10 states where the most millennials live at home were liberal…and 11 out of the top 15.

  

   

  And while the number of millennials living at home with mom continues to surge, 1 out of 4 of them are neither enrolled in school or working.

  It is easy to think of young people living in their parents’ home as a homogeneous group, as though they were all unemployed and dependent on their parents’ support. At 24.2 million people, the population of 18- to 34-year-olds living at home is a large and diverse group. Most of them-about 81 percent—are either working or going to school. This should not be surprising because most people aged 18 to 24 are living in their parents’ home, attending classes or working part-time. On the other hand, we might be surprised if their older peers do not contribute to the family budget because they have had more time to finish school and find a stable job. Yet, of the 8.4 million 25- to 34-year-olds living at home, about 1 in 4 are idle, meaning they are not in school and do not work.

   

  Who are these young adults who are not in the labor force or going to school? They tend to be older millennials who are White or Black and have only a high school education, compared with their peers who are working or going to school while living at home. But they may not be idle for want of effort. They are more likely to have a child, so they may be caring for family, and over one-quarter have a disability of some kind (Table 6). That so many are disabled suggests that they have limitations in their ability to attend classes, study, find work, or keep a regular job. Recent stories on boomerang children returning home focus on economic downturns, unforgiving job markets, and high rents.30 Though often overlooked in these stories, young people’s health may play an important role in their decision to live with parents.

  

   

  A bright future awaits, America.

  

  

• The Reason Behind The Sales-Surge For Nuclear-Proof Bunkers

  Authored by Eric Zuesse via The Strategic Culture Foundation,

  On April 15^th, Zero Hedge bannered «Doomsday Bunker Sales Soar After Trump's Military Strikes», but this growth in the market for nuclear-proof bunkers is hardly new; it started during the Obama Administration, in Obama’s second term, specifically after the Russia-friendly government of Ukraine, next-door to Russia, got taken over in 2014 by a rabidly anti-Russian government that’s backed by the U.S. government.

  This boom in nuclear-bunker sales is only increasing now, as the new U.S. President, Donald Trump, tries to out-do his predecessor in demonstrating his hostility toward the other nuclear superpower, Russia, and displaying his determination to overthrow the leader of any nation (such as Syria and Iran) that is at all friendly toward Russia. For earlier examples of feature-articles on this booming market for homes that allegedly would enable buyers to survive the first blast effects, and the most immediate nuclear contaminations, of a Third World War, see here, and here, and here, and here, and here, and here, and here, and here, and here, and here. 

  

  This surging demand for nuclear bunkers started right after the U.S. government arranged a coup in Ukraine that replaced the existing Moscow-friendly democratically elected President by installing a rabidly anti-Russian Prime Minister and national-security appointees from Ukraine’s two nazi Parties, the Right Sector Party, and the former Social Nationalist Party of Ukraine (which the CIA renamed «Svoboda» meaning «Freedom» so as to enable it to be acceptable to the American public). Then, the intensifying U.S. effort to replace the secular pro-Russian Syrian leader Bashar al-Assad by a sectarian jihadist government that would be dependent upon the Saudi-Qatari-UAE-Turkish-U.S. alliance, has only intensified further the demand for these types of «second homes». 

  Whereas all of the purchasers of these bunkers are being kept secret, the U.S. federal government provides, free-of-charge, to top officials, nuclear bunkers, so as to allow the then-dictatorship (continuation of America’s current dictatorship) to function, in order, supposedly, to serve their country, which they’d already have destroyed (along with destroying the rest of the world) by their determination to conquer Russia. No one knows what the reality would actually be in such a post-WW-III world, except that there would be no functioning electrical grid, nights would be totally dark for anyone whose sole reliance is on the grid, and all rivers and other water-sources would be intensely radioactive from the fallout, so that groundwater soon would also be unusable — and, of course, the air itself would also be toxic; so, lifespans would be enormously shortened, and excruciating, not to say extremely depressing.

  No one has published a computer-model of a U.S.-Russia nuclear war, because doing that would be unacceptable to the «military-industrial complex» including the U.S. government, but in 2014 a «limited, regional nuclear war between India and Pakistan» was computer-modeled and projected to produce global ozone-depletion and «the coldest average surface temperatures in the last 1000 years», which «could trigger a global nuclear famine». But such a war would be only 50 bombs instead of the 10,000+ that would be used in a WW III scenario; and, so, everyone who is paying money in order to survive WW III is simply wasting money.

  But, somehow, there are people who either want a Russia-U.S. war, or else whose preparations for it are directed at surviving in such a world, instead of at ending the current grip on political power in the United States, on the part of the people who are working to bring about this type of (end to the) world. At least the owners of the major U.S. armaments-firms, such as Raytheon Corporation, would have an explosive financial boost during the build-up toward that war, but buying bunkers in order to survive it, would seem to be a dubious follow-up to such an investment-plan. On the other hand, it might appeal to some thrill-seekers who don’t even feel the need for a good computer-simulation of a post-WW-III world; maybe they’ve got money to burn and a craving to experience ‘the ultimate thrill’, and don’t want unpleasant knowledge to spoil the thrill.

  After President Trump threw out his National Security Advisor Michael Flynn and replaced him with the rabidly anti-Russian H.R. McMaster, and then lobbed 59 cruise missiles against the Syrian government (which is protected by the Russian government), the cacophony of press that had been calling for President Trump to be impeached and replaced by his rabidly anti-Russian Vice President Mike Pence, considerably quieted down; and, so, the Obama-Trump market for nuclear bunkers seems now to be established on very sound foundations, for the foreseeable immediate future. And, if anyone in the U.S. federal government has been planning to prepare the U.S. for a post-WW-III world, that has not been publicly announced, and no newsmedia have even been inquiring about it — so, nothing can yet be said about it.

  The general message, thus far, is that, after World War III, everyone will be on his or her own, but that the dictators will (supposedly) be in a far better position than will anyone outside that ruling group. However, if the survivors end up merely envying the dead, it will be no laughing matter, regardless of how silly those nuclear bunkers are. It would be nothing funny at all.

  On April 17^th, Scott Humor, the Research Director at the geostrategic site «The Saker,» headlined «Trump has lost control over the Pentagon», and he listed (and linked-to) the following signs that Trump is following through with his promise to allow the Pentagon to control U.S. international relations:

  March 14^th, the US National Nuclear Security Administration field tested the modernized B61-12  gravity nuclear bomb in Nevada.

  April 7, Liberty Passion, loaded with US military vehicles, moored at Aqaba Main Port, Jordan

  On April 7^th the Pentagon US bombed Syria’s main command center in fight against terrorists

  April 10, United States Deploying Forces At Syrian-Jordanian Border

  April 11, The US Air Force might start forcing pilots to stay in the service against their will, according to the chief of the military unit’s Air Mobility Command.

  April 12, President Donald Trump has signed the US approval for Montenegro to join NATO

  April 13, NATO chief Jens Stoltenberg announced the alliance’s increased deployment in Eastern Europe

  On April 13^th, the Pentagon bombed Afghanistan. The US military has bombed Afghanistan with its GBU-43/B Massive Ordnance Air Blast Bomb (MOAB)

  April 13, the US-led coalition bombed the IS munitions and chemical weapons depot in Deir ez-Zor killing hundreds of people

  April 14, The Arleigh Burke-class, guided-missile destroyer USS Stethem (DDG 63) has been deployed to the South China Sea

  April 14, the US sent F-35 jets to Europe

  April 14, Washington failed to attend the latest international conference hosted by Moscow, where 11 nations discussed ways of bringing peace to Afghanistan. The US branded it a «unilateral Russian attempt to assert influence in the region».

  April14, the US has positioned two destroyers armed with Tomahawk cruise missiles close enough to the North Korean nuclear test site to act preemptively

  On April 16^th, the US army makes largest deployment of troops to Somalia since the 90s.

  Mr. Humor drew attention to an article that had been published in «The Daily Beast» a year ago, on 8 April 2016, «CALL OF DUTY: The Secret Movement to Draft General James Mattis for President. Gen. James Mattis doesn’t necessarily want to be president—but that’s not stopping a group of billionaire donors from hatching a plan to get him there». Though none of the alleged «billionaires» were named there, one prominent voice backing Mattis for the Presidency, in that article, was Bill Kristol, the Rupert Murdoch agent who co-founded the Project for a New American Century, which was the first influential group pushing the «regime-change in Iraq» idea during the late 1990s, and which also advocated for the foreign policies that George W. Bush, Barack Obama, Hillary Clinton, and Donald Trump, have since been pursuing, each in his own way. It seems that whomever those «billionaires» were, they’ve now gotten their wish, with a figurehead Donald Trump as President, and James Mattis actually running foreign policy. Humor also noted that Mattis wants to boost the budget of the Pentagon by far more than the 9% that Trump has proposed. Perhaps Trump knew that even to get a 9% Pentagon increase passed this year would be almost impossible to achieve. First, the unleashed Pentagon needs to place the military into an ‘emergency’ situation, so as to persuade the public to clamor for a major invasion. That ‘emergency’ might be the immediate goal, toward which the March-April timeline of events that Humor documented is aiming.

  As regards the military comparisons of the personnel and equipment on both sides of a U.S.-Russia war, the key consideration would actually be not the 7,000 nuclear warheads that Russia has versus the 6,800 nuclear warheads that the U.S. has, but the chief motivation on each of the respective sides: conquest on the part of the U.S. aristocracy, defense on the part of the Russian aristocracy. (Obviously, the U.S. having continued its NATO military alliance after the Soviet Union’s Warsaw Pact military alliance ended in 1991, indicates America’s aggressive intent against Russia. That became a hyper-aggressive intent when NATO absorbed Russia’s former Warsaw Pact allies. NATO even brought in some parts of the former USSR itself, when in 2004, Estonia, Latvia, and Lithuania, entered NATO, and in 2014 U.S. President Obama tried to get Ukraine into NATO, and these five countries hadn’t even been Warsaw Pacters, but had instead been parts of the USSR itself. It was as if Russia had grabbed not only America’s allies, but some states in the U.S. itself. This constituted extreme aggression, and shows the U.S. aristocracy’s obsessive intent for global empire — to include Russia.) 

  Any limited war between the two powers would become a nuclear war once the side that’s losing this limited war becomes faced with the choice of either surrendering that limited territory (now likely Syria) or else going nuclear. On Russia’s side, allowing such military conquest of an ally would be unacceptable; the war would then expand with the U.S. and its allies invading Russian territory for Russia’s continuing refusal to accept the U.S.-Saudi and other allies’ grabbing of Syria (on ‘humanitarian grounds’, of course — as if, for example, the Sauds aren’t far more brutal than Assad). After the traditional-forces’ invasion of Russia, Russia’s yielding its sovereignty over its own land has never been part of Russia’s culture: If Russia were to be invaded by allies of the U.S., then launching all of Russia’s nuclear weapons against the U.S. and America’s invasion-allies, would be a reasonably expected result. Here’s how it would develop: On America’s side, which (very unlike Russia) has no record of any foreign invasion against its own mainland (other than the Sauds’ own 9/11 ‘false flag’ attacks), the likely response in the event of Russia’s crushing its invaders would be for the U.S. President to seek to negotiate a face-saving end to that limited war, just as the American President Richard Nixon did regarding America’s invasion and occupation of Vietnam.

  However, a reasonable question can be raised as to whether, in such a situation, Russia would accept anything less than America’s total surrender, much as Franklin Delano Roosevelt in WW II was determined to accept nothing less than Germany’s total surrender, at the end of that war. If Trump wants to play Hitler, then Putin (acting in accord with Russian tradition) would probably play both FDR and Stalin, even if it meant the end of the world. For Russia to be conquered, especially by such intense evil as those invaders would be representing, would probably be viewed by Russians as being even worse than ending everything, and this would probably be Putin’s view as well. If America did not simply capitulate, Putin would probably nuclear-blitz-attack the U.S. and its allies, rather than give Trump (or Pence) the opportunity to blitz-attack Russia and to sacrifice all of the U.S. side’s invading troops in Russia so as to ‘win’ the overall war and finally conquer Russia. It would be like WW II, except with nuclear weapons — and thus an entirely different type of historical outcome after the war. 

  Consequently, either the U.S. will cease its designs on Russia, or there will be WW III. Russia’s sovereignty will never be yielded, especially not to the thuggish gang who have come to rule the U.S. (both as «Republicans» and as «Democrats»). The bipartisan neoconservative dream of America’s aristocrats (world-conquest) will never be achieved. Russia will never accept it. If America’s rulers continue to press it, the result will be even worse than when the Nazis tried. It’s just an ugly pipe-dream, but any attempt to make it real would be even uglier. And nobody who buys a ‘nuclear-proof bunker’ will get what he or she thinks is being bought — safety in such a world as that. It won’t exist.

  

  

• "We're At The Mercy Of The Algos"; More News Sites Say Facebook's 'Fake News' Filter Is Killing Traffic

  Yesterday we highlighted an article written by the Chicago Tribune’s Deputy Editor for Digital News, Kurt Gessler, which provided a fairly compelling set of facts to suggest that Facebook’s ‘fake news’ filter was suppressing the distribution of articles from media sources which undoubtedly consider themselves “legitimate new outlets” (with the definition of ‘legitimate’ left solely to the discretion of Facebook execs, of course).

  As it turns out, the Chicago Tribune was not alone as Gessler’s article prompted a whole host of digital publishers to come forward with similar stories of traffic destruction.  Per Digiday:

  Facebook’s news feed algorithm changes have been part of publishing reality for many years. But to Matt Karolian, director of audience engagement at The Boston Globe, “last month was probably the worst we’ve had in reach in about a year. The fact everyone else is seeing it is a little bit troubling.”

   

  Aysha Khan said Facebook reach has also been sliding at the Religion News Service, where she’s social media editor.

   

  “Reach spiked in the summer, and we started hitting 15, 25K reach on bigger posts that were polarizing,” Khan said. “It wasn’t just political posts, but any kind of interviews. Anything that had potential to get a big reaction got a big reaction. But then we noticed that kind of stopped, and by January, it was just gone. Now we’re worse off than we were to start with.”

   

  The change has happened even as RNS has been doing more video, including live video, and photos, things that Facebook has encouraged. Khan said RNS is still trying, though, with plans for more regularly scheduled live video and videos generally.

  Meanwhile, Vocativ…

  @kurtgessler This looks somewhat familiar to me as well. It’s not just you.

  — rob blatt (@robblatt) April 19, 2017

  //platform.twitter.com/widgets.js

   

  and Chicago Magazine also corroborated the Tribune’s data.

  @whet @kurtgessler This is great @kurtgessler – I haven’t crunched the #s yet but our FB reach is definitely down. And we do have FBIA enabled.

  — Bettina Chang (@bechang8) April 18, 2017

  //platform.twitter.com/widgets.js

   

  “In my mind, we’re kind of at the mercy of the algorithm,” Khan said. “But there’s a lot of stories that are getting underwhelming responses that readers can’t even see.

  Of course, we would argue that any business model which relies on Facebook for distribution is fundamentally flawed.  That said, we have to admit that the irony of Facebook’s ‘fake news’ crusade ensnaring some of the nation’s most recognizable, elitist mainstream media outlets is, to the say the least, humorous. 

  * * *

  For those who missed our original post on the topic, see below:

  Back in December we wrote about the efforts of Facebook to combat the spread of “fake news” over social media with the introduction of a filter intended to flag ‘fake’ content so that users wouldn’t haven’t to go through the hassle of critically analyzing information on their own.  As we noted at the time, it was a genius plan, except for one small issue:  who determines what is considered “fake news” and how exactly do they draw those conclusions?  From our prior post (see “Facebook Launches Campaign To Combat “Fake News”“):

  The first problem, however, immediately emerges because as NBC notes, “legitimate news outlets won’t be able to be flagged”, which then begs the question who or what is considered “legitimate news outlets”, does it include the likes of NYTs and the WaPos, which during the runup to the election declared on a daily basis, that Trump has no chance of winning, which have since posted defamatory stories about so-called “Russian propaganda news sites”, admitting subsequently that their source data was incorrect, and which many consider to be the source of “fake news”.

   

  Also, just who makes the determination what is considered “legitimate news outlets.”

  Now, it seems as though the first confirmed victim of Facebook’s ‘fake news’ crusade may be none other than the Chicago Tribune, a newspaper that undoubtedly considers itself a “legitimate news outlet.”

  The discovery was highlighted in an article written by the Chicago Tribune’s own Deputy Editor for Digital News, Kurt Gessler, who noted that a curious thing happened back in December when Facebook first changed up its algorithms to target fake news, namely their traffic crashed.  Per the chart below, the typical Tribune post went from attracting the interest of 30-35k people down to 15-20k people in a matter of months.

  

   

  Meanwhile, the number of Tribune articles shared over Facebook that reached less than 10,000 viewers (i.e. the “duds”) skyrocketed while the number of highly successful articles, those reaching 50,000+ people, simultaneously plunged.

  

   

  So, either the Chicago Tribune suddenly started producing a lot of garbage that no one wanted to read, which just happened to coincide with the implementation of Facebook’s new “fake news” algo, or the media outlet was pumping out content that Facebook suddenly figured to fit the definition of ‘fake’.

  Certainly, the issue couldn’t be attributed to a loss of followers….

  

  …or less content creation.

  

   

  Perhaps Facebook’s algos are better at identifying “fake news” than we thought.

  

  

• Paul Tudor Jones Has A Message For Janet Yellen: "Be Terrified"

  Billionaire investor Paul Tudor Jones has a message for Janet Yellen and investors: Be very afraid.

  

  Echoing a number of recent high profile managers' warnings…

  Guggenheim Partner’s Scott Minerd said he expected a "significant correction" this summer or early fall,  citing as potential triggers President Donald Trump’s struggle to enact policies, including a tax overhaul, as well as geopolitical risks.

   

  Philip Yang, a macro manager who has run Willowbridge Associates since 1988, sees a stock plunge of between 20 and 40 percent, according to people familiar with his thinking, citing events like a severe slowdown in China or a greater-than-expected rise in inflation that could lead to bigger rate hikes.

   

  Seth Klarman, who runs the $30 billion Baupost Group, told investors in a letter last week that corporate insiders have been heavy sellers of their company shares. To him, that’s “a sign that those who know their companies the best believe valuations have become full or excessive."

   

  Larry Fink, whose BlackRock Inc. oversees $5.4 trillion mostly betting on rising markets, acknowledged this week that stocks could fall between 5 and 10 percent if corporate earnings disappoint.

   

  Another multi-billion-dollar hedge fund manager, who asked not to be named, said that rising interest rates in the U.S. mean fewer companies will be able to borrow money to pay dividends and buy back shares. About 30 percent of the jump in the S&P 500 between the third quarter of 2009 and the end of last year was fueled by buybacks, according to data compiled by Bloomberg. The manager says he has been shorting the market, expecting as much as a 10 percent correction in U.S. equities this year.

   

  Even billionaire Leon Cooperman — long a stock bull — wrote to investors in his Omega Advisors that he thinks U.S. shares might stand still until August or September, in part because of flagging confidence in the so-called Trump reflation trade.

  Their views aren’t widespread. They’ve seen the carnage suffered by a few money managers who have been waving caution flags for awhile now, as the eight-year equity rally marched on.

  But, the nervousness feels a bit more urgent now, as Bloomberg reports,  legendary macro trader Paul Tudor Jones, who runs the $10 billion Tudor Investment hedge fund, says that years of low interest rates have bloated stock valuations to a level not seen since 2000, right before the Nasdaq tumbled 75 percent over two-plus years.

  That measure — the value of the S&P relative to the size of the economy — should be “terrifying” to a central banker, Jones said earlier this month at a closed-door Goldman Sachs Asset Management conference, according to people who heard him.

  

   

  In fact Total US Market Capitalization-to-GDP is struggling to bust above its 2007 highs…

  

  While the billionaire didn’t say when a market turn might come, or what the magnitude of the fall might be, he did pinpoint a likely culprit.

  Just as portfolio insurance caused the 1987 rout, he says, the new danger zone is the half-trillion dollars in risk parity funds. These funds aim to systematically spread risk equally across different asset classes by putting more money in lower volatility securities and less in those whose prices move more dramatically. Because risk-parity funds have been scooping up equities of late as volatility hit historic lows, some market participants, Jones included, believe they’ll be forced to dump them quickly in a stock tumble, exacerbating any decline.

  “Risk parity,” Jones told the Goldman audience, “will be the hammer on the downside.”

  Indeed, with all that low-vol leveraged, it wouldn't be the first time…

  

   

  

  

• Police Officer, Kalashinikov-Yielding Shooter Killed In Paris "Terrorist" Attack; ISIS Claims Responsibility

  Summary:

  • One police officer has been killed in a shooting on the Champs Elysees in Paris
  • The shooting suspect, who was armed with a Kalashnikov rifle, has been shot dea
  • An arrest warrant has been issued for the second suspect who arrived from Belgium by train
  • One shooter has been identified as 39-year-old Karim Cheurfi (aka Abu Yusuf al-Baljik) who was living in a suburb east of Paris
  • ISIS has claimed the attack and has identified the attacker as Abu Yusuf al-Beljiki
  • A ‘War weapon’ was used in attack
  • Central Paris remains on in lockdown
  • Attack comes three days before presidential election

  * * *

  Update 14:  The Associated Press reports that French police have surrounded and searched the family home of Karim Cheurfi (aka Abu Yusuf al-Baljik), a 39-year-old with a police record, in relation to today’s attack.  Cheurfi’s home is located in the town of Chelles.

  

   

  Karim Cheurfi, now known as Abu Yusuf al-Baljiki, was convicted of shooting at police officers in 2001, L’Express reports. He was sentenced to 20 years in prison in 2003, but that term was reduced to 15 years in 2005, the newspaper reports.

  According to a 2001 report from Le Parisien, Cheurfi, then 23, stole a gun from a police officer and shot him three times, in the lung, leg and foot. He also fired at other officers.

  * * *

  Update 13: French BFM TV reports that the attacker had boasted of wanting to kill police on the Telegram messaging service.
  

  Meanwhile, Francois Fillon has called for this Sunday’s presidential election first round to be suspended following the Paris attack. 

  * * *

  Update 12: Through its news agency Amaq, ISIS has claimed the attack on French police in #Paris France, and has identified the attacker as Belgian Abu Yusuf al-Beljiki

  Through ‘Amaq, #ISIS claimed the attack on French police on Champs-Élysées in #Paris #France, identified attacker as Abu Yusuf al-Beljiki pic.twitter.com/LvFyHmTvM9

  — SITE Intel Group (@siteintelgroup) April 20, 2017

  * * *

  Update 11: A witness quoted by the Telegraph said he saw the gunman fire six times and then hide behind a truck. “He fired at the police and then he crouched behind the lorry. Then he got up and ran and was shot by the police.”

  Forensics officers in white boiler suits with hoods were deployed on the Champs-Elysées.

  Meanwhile, President Hollande said: “We are convinced the motive is likely to be terrorism.” Both Marine Le Pen and Francois Fillon have cancelled campaign trips tomorrow.

  * * *

  Update 10: According to a French government spokesman the Paris assailant used a “war weapon” to fire on officers, previously identified as a Kalashnikov rifle.

  Cyril, 40, a witness, said: “I was on the corner beside Marks and Spencer and Zara, waiting in my car for a friend, 10 or 15 metres from a police van. I saw a man all in black approaching the van as if he was asking for information, and he took out a Kalashnikov and fired, with his right hand.”

  He added: “I started my car and pushed three or four other cars so I could do a U-turn. I’m totally certain he meant to kill the police. He was wearing a big black quileted coat and had hidden the gun under it.”

  Paris is engulfed in Darkness. “He came out with a Kalashnikov and started shooting” #Paris pic.twitter.com/wHVoxlWDdc

  — Mark Kennedy (@marksmile100) April 20, 2017

  Update 9: The French police have issued an arrest warrant for a second suspect in Paris shooting who arrived from Belgium by train, Reuters reports.

  * * *

  Update 8: In conflicting reports, the French Interior Ministry now says that no other terror events occured, adds that a second policeman was not killed and that the gundman has not been “precisely identified”. Additionally, police have reportedly stated that the dead attacker appeared to be alone.

  * * *

  Update 7: A police helicopter is said to be patrolling the area of the shooting. A police source said it was equipped with a huge searchlight to help track down any attackers that might be on the run.

  * * *

  Update 6: A bomb disposal team is checking the attacker’s vehicle according to the French Interior Ministry. Meanwhile, security forces are searching the home of the dead gunman in the east of Paris.

  * * *

  Update 5: French anti-terrorist prosecutors have opened an investigation, confirming that the motive is believed to have been terrorism, and the attacker was known to the intelligence services, security sources said. They added that he had been flagged as a serious threat to national security.

  Meanwhile, Reuters reports that the second policeman injured in shooting has died of his wounds, police sources told Reuters.

  President Hollande has called an emergency security meeting. Bernard Cazeneuve, the prime minister, has joined President Hollande at the Elysée Palace for the meeting.

  * * *

  Update 4: French BFM TV reports that at least one assailant was known to French authorities.

  * * *

  Update 3: BREAKING – Shots fired at new location near Champs Elysees Avenue in Paris: police source. Meanwhile, FranceTV Info reports that there were several assailants in the original shooting, some of whom were still at large.

  * * *

  Update 2:  An Interior Ministry spokesman says on BFM TV that officers were deliberately targeted in Paris shooting.

  * * *

  Update: A robbery apparently took place at same time as shooting

  Pierre-Henry Brandet, the interior ministry spokesman, said one police officer was killed and two seriously wounded. “The attacker was shot dead by police and the area remains cordoned off,” Mr Brandet said.

  A car stopped near a police van before the attack and was found abandoned. It was suspected that the gunman used it to reach the scene of the attack.

  Mr Brandet said a robbery may have been carried out at the same time as the attack. It was unclear if the two were linked.

   

  * * *

  With just days until the first round of the French presidential election, one policeman was killed and another wounded in a shooting incident on the historic Champs-Elysees in Paris.

  The shootout took place around 21:00 (local time) near the Franklin D. Roosevelt metro station in the 8th district of the French capital, in front of a Marks and Spencer store, French RTL TV and BFM TV reported.

  The who fired on police on the Champs-Elysees shopping boulevard just days ahead of France’s presidential election has been killed, the source said. A police source also said there had been two assailants, and a witness told Reuters that one man got out of a car at the scene and began shooting with a Kalashinkov machine gun.

  Police state there were at least two people involved in the shooting, one of them has been killed. One of the suspects got out of a car and began shooting “with a Kalashnikov”, hitting a policeman, an eyewitness has told Reuters.

  The officer killed was apparently in a car stopped at a red light.

  Yvan Assioma of the police union Alliance said:

  The exact circumstances are still unclear but I can confirm the tragic death of one of our colleagues. Our thoughts are very much with the family. One or several attackers have been shot dead by the police. Some officers were hit but the bullets were stopped by their bulletproof vests, but two were hit.

  French police say shooting in the Champs-Elysees area of Paris in which one police officer has been killed was probably “a terrorist act”

  French TV channel BFM broadcast footage of the Arc de Triomphe monument and top half of the Champs Elysees packed with police vans, lights flashing and heavily armed police shutting the area down after what was described by one journalist as a major exchange of fire nears a Marks and Spencers store.

  The incident came as French voters prepared go to the polls on Sunday in the most tightly-contested presidential election in living memory.

  France has lived under a state of emergency since 2015 and has suffered a spate of Islamist militant attacks that have killed more than 230 people in the past two years.

  As Reuters adds, earlier this week, two men were arrested in Marseille whom police said had been planning an attack ahead of the election.

  A machine gun, two hand guns and three kilos of TATP explosive were among the weapons found at a flat in the southern city along with jihadist propaganda materials according to the Paris prosecutor.

   

  Live Feeds:

   

    * * *

  JUST IN: Police officer killed after gunshots in Paris, attacker “taken down,” BFMTV reports … pic.twitter.com/4ZgZMnNqxE

  — Ryan Wolfe (@ele_wolfe) April 20, 2017

  #France????????BREAKING
  French #police source: one officer has been killed and another has been wounded in a shooting in #Paris #ChampsÉlysées pic.twitter.com/aU7cpPsgHQ

  — ????? ??? simon aran (@simonarann) April 20, 2017

  JUST IN: Possible shooting shuts Champs-Élysées in Paris: reports https://t.co/AptgHR2SG5

  — NBC News (@NBCNews) April 20, 2017

  DEVELOPING: 1 Police Officer Dead, Another Wounded In Paris Shooting – https://t.co/ETfw0x68H8 pic.twitter.com/3Q5Se1NKhk

  — Breaking911 (@Breaking911) April 20, 2017

  L’avenue des Champs-Elysées complètement bloquée suite à une fusillade ! #ChampsElysees #DIRECT #BREAKING #Parishttps://t.co/bXfz5wFZIw

  — Charles Baudry (@CharlesBaudry) April 20, 2017

  The French police have told the local population to avoid the area of the Champs Elysees which is on lock down, while social media add that riot police has been dispatched.

  #ChampsElysees closed. Riot police on ground in #paris pic.twitter.com/JCWovTqpb9

  — Melissa Bell (@MelissaBellCNN) April 20, 2017

  Paris, what’s going on the Champs-elysses?? #paris pic.twitter.com/xTIgA5cW1P

  — Allie Fowler (@historynerd94) April 20, 2017

  According to subsequent news reports the shooter, who was allegedly armed with a Kalashnikov, has been killed.

  Coups de feu sur les Champs-Elysées. Un homme avec une kalachnikoff abattu.L’info n’est pas encore sortie @lemondefr @Le_Figaro @le_Parisien

  — info75 (@encolere75) April 20, 2017

  BREAKING: One policeman killed after shooting incident on Champs Elysees in Paris; person who fired on police killed

  — Reuters Top News (@Reuters) April 20, 2017

  Police said that the shooting was probably a “terrorist act”

  French police say shooting in the Champs-Elysees area of Paris in which one police officer has been killed was probably “a terrorist act”

  — Sky News Newsdesk (@SkyNewsBreak) April 20, 2017

  

  

• Ex-DEA Spokeswoman: 'Marijuana Is Safe', Kept Illegal Because It's A 'Cash Cow'

  Authored by Alex Thomas via TheAntiMedia.org,

  

  Before the heroin epidemic became a nationwide problem, claiming thousands of lives; Plano, Texas, was already entrenched. And like many of the places caught in the crosshairs of the continuing heroin crisis, Plano is the last place that one would expect to be swept into the opioid tidal wave.

  Anti-Media recently interviewed Texas-native Belita Nelson, who has had an interesting few decades.

  

  For six years she termed herself the “chief propagandist” — or spokeswoman — for the Drug Enforcement Agency (DEA). Before that, as a Plano mother and teacher, Belita noticed what was happening in her community. She described Plano as an area rivaling Newtown, Connecticut, or Cape Cod — tight-knit regions where tragedy strikes hard and deep.

  She explained that “[Plano] has the best school districts in the state of Texas…it’s a gated community. And in 1998, for heroin to be that prevalent in the community was stunning. Stunning. We got all the media attention because we were this upscale Texas neighborhood that nobody thought would be inundated with heroin.”

   

  Nelson decided to take action, saying, “I decided I’d had it. I was going to organize my community and fight this thing at the grassroots level. But we were never grassroots because the first thing I did was go on the Oprah show for the DEA.”

  Belita stresses that she was never officially employed by the DEA but traveled for six years as a sort of unofficial spokeswoman for the agency.  The group recruited her because their goals aligned, and in many ways, she was perfect for the role. She was a mother who had witnessed the toll of heroin first-hand. She was passionate and knew what she was talking about. Belita spoke to schools and parent groups and appeared on television networks.

  With the help of a former Dallas Cowboy, she founded the Starfish Foundation to tackle heroin addiction. That organization ran until 2004 when one of the employees pocketed the donation money and left the foundation scrambling in the dark.

  In our interview, Belita was hesitant to speak too openly but mentioned that when she first went to work with the DEA (she was contacted and became familiar with agency’s goals), she was told “‘Marijuana is safe, we know it’s safe, but it’s our cash cow and we will never, ever, give it up.’” When the DEA seizes a car or makes a drug bust, it’s likely they’ll find wads of money. They turn in the pot (or other drugs) — and keep the cash. Civil asset forfeiture law essentially gives the police and feds free reign, and they have confiscated billions of dollars from Americans, a majority of whom have not been charged with a crime.

  Belita, like many people, posits that the DEA is not willing to give up the long disproven idea that marijuana is a “gateway drug.” Unlike heroin, most people are open to trying marijuana. At high school or college parties, it’s much more likely that a joint is being passed around than a needle. While a joint conjures up images of Bob Weir or SOJA on stage, a needle brings to mind a lifeless Philip Seymour Hoffman or Basquiat.

  Belita cut ties with the DEA in 2004 after becoming frustrated with the system and the government’s need to keep marijuana criminalized, despite knowledge that the drug was safe.

  While at the Starfish Foundation, Belita heard time and time again the tale of pot-smoking teenagers who were pushed into heroin simply because marijuana carries harsh penalties. And it’s a story that’s been told repeatedly. Today Belita works for the Gridiron Cannabis Foundation,  a nonprofit dedicated to fighting CTE, concussions, Alzheimer’s disease, Parkinson’s disease, Multiple Sclerosis, neuropathy, dementia, chronic in?ammation, Leukemia, and brain and other cancers. But the group’s pockets that only stretch so far.

  In contrast, her opposition — and the opposition of anyone fighting the heroin epidemic and hoping to legalize marijuana — are big pharma companies.

  Recently, we’ve seen pharma companies hit the grassroots to secure influence. Anti-Media and a number of other news outlets recently reported on an opioid company pumping half a million dollars into Arizona anti-marijuana groups in an effort to keep the plant illegal. These sorts of campaigns do not serve the dead in Plano and the hundreds of thousands around the nation suffering from opioid addiction. Rather, they benefit CEOs and pharmaceutical groups who have invested millions in developing drugs that minimize pain. Unfortunately, they come with a dangerously high likelihood of addiction.

  Big pharma corporations see dollar signs in every painkiller that moves across a counter, but some of which could easily be replaced by marijuana, which is increasingly proven to help decrease pain. So the American consumer, from Plano, Texas, to Portland, Maine, is faced with the dilemma — is it better to be a living Bob Weir or a dead Basquiat?

  

  

• Unnamed Sources Tell CNN Fake News: U.S. Officials Preparing Charges Against Julian Assange

  I’m going out on a limb here and calling this one ‘fake news’ on behalf of CNN, Washpo and the other shills who are trying every trick in the bag to avenge the loss of Hillary Clinton and the hacking of John Podesta’s email box. This is all about vengeance. Nothing would delight Pizza Podesta more than visiting Assange inside of a maximum protected prison.

  The article that I am about to reference by CNN Fake News, oddly leaves out the President as part of the American government. It’s as if he wasn’t even a factor in all this Wikileaks business. By the way, Trump is on record saying he ‘loved’ Wikileaks and used them as a news source, continuously throughout the campaign.
   
  
   
  
   
  But according to unnamed sources, deep inside of the government, CNN says the United States are preparing charges against the Wikileaks founder, Julian Assange.

  The Justice Department investigation of Assange and WikiLeaks dates to at least 2010, when the site first gained wide attention for posting thousands of files stolen by the former US Army intelligence analyst now known as Chelsea Manning.
   
  Prosecutors have struggled with whether the First Amendment precluded the prosecution of Assange, but now believe they have found a way to move forward.
   
  During President Barack Obama’s administration, Attorney General Eric Holder and officials at the Justice Department determined it would be difficult to bring charges against Assange because WikiLeaks wasn’t alone in publishing documents stolen by Manning. Several newspapers, including The New York Times, did as well. The investigation continued, but any possible charges were put on hold, according to US officials involved in the process then.

  The US view of WikiLeaks and Assange began to change after investigators found what they believe was proof that WikiLeaks played an active role in helping Edward Snowden, a former NSA analyst, disclose a massive cache of classified documents.
   
  Assange remains holed up in the Ecuadorian embassy in London, seeking to avoid an arrest warrant on rape charges in Sweden. In recent months, US officials had focused on the possibility that a new government in Ecuador would expel Assange and he could be arrested. But the left-leaning presidential candidate who won the recent election in the South American nation has promised to continue to harbor Assange.
  Last week in a speech at the Center for Strategic and International Studies in Washington, CIA Director Mike Pompeo went further than any US government official in describing a role by WikiLeaks that went beyond First Amendment activity.

   
  CNN cited comments made by the new CIA boss, Mike Pompeo, last week, who said “It’s time to call out WikiLeaks for what it really is: A non-state hostile intelligence service often abetted by state actors like Russia.”
   
  It’s obvious to anyone with a brain, the deep state, DNC and the CIA loathe Assange and would like nothing more than to see him rot in an American cell. Assange is no different from any reporter at any of our fantastic media organizations — relying upon sources to publish information. If we are going to toss Assange into a prison cell for publishing leaked documents, then what should we do with all of the journalists at the NY Times, Washpo and CNN —  who do that every single day of their miserable lives?
   
  Here’s CNN peddling the false narrative that Russia was working in concert with Wikileaks, an assertion that has never been proven. In fact, the only attempt the government has made to date to tie Russian hacking to our elections turned out to be a comical farce, widely mocked and jeered as non-credible.
   

  US intelligence agencies have also determined that Russian intelligence used WikiLeaks to publish emails aimed at undermining the campaign of Hillary Clinton, as part of a broader operation to meddle in the US 2016 presidential election. Hackers working for Russian intelligence agencies stole thousands of emails from the Democratic National Committee and officials in the Clinton campaign and used intermediaries to pass along the documents to WikiLeaks, according to a public assessment by US intelligence agencies.

   
  CNN then pivoted to today’s presser with Attorney General, Jeff Sessions — providing the smoking gun evidence they needed to confirm that the government was, in fact, going to file charges against Assange.

  “We are going to step up our effort and already are stepping up our efforts on all leaks,” he said. “This is a matter that’s gone beyond anything I’m aware of. We have professionals that have been in the security business of the United States for many years that are shocked by the number of leaks and some of them are quite serious. So yes, it is a priority. We’ve already begun to step up our efforts and whenever a case can be made, we will seek to put some people in jail.

   
  Notice how he never actually mentioned Assange or Wikileaks? Here’s the clip. You be the judge.
   
  
   
  CNN then tried to get confirmation from Assange’s attorney —  but got nothing instead.

  “We’ve had no communication with the Department of Justice and they have not indicated to me that they have brought any charges against Mr. Assange,” said Assange’s lawyer, Barry Pollack. “They’ve been unwilling to have any discussion at all, despite our repeated requests, that they let us know what Mr. Assange’s status is in any pending investigations. There’s no reason why Wikileaks should be treated differently from any other publisher.”
   
  Pollack said WikiLeaks is just like the Washington Post and the New York Times, which routinely publish stories based on classified information. WikiLeaks, he says, publishes information that is in “the public’s interest to know not just about the United States but other governments around the world.”

  This sums up how I feel about the matter.
   

  Imagine if China or Russia announced a criminal investigation of US journalists for publishing their state secrets. https://t.co/UOBEbhAbsA

  — Ben Wizner (@benwizner) April 20, 2017

  //platform.twitter.com/widgets.js

  Content originally published at iBankCoin.com

   

  

• A New "Anomaly" Emerges In Chinese Markets

  The Shanghai Composite Index, notorious for its wild swings over the past two years, has gone 85 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992.

  

   

  The last 4 days have highlighted the unusual effect in Chinese stocks.. each time the Shanghai Composite dropped over 1% (red dotted line) it was miraculously lifted to ensure it closed with a loss less than 1%…

  

   

  As Bloomberg reports, authorities favor a steady stock market because it helps companies fund investment and repay debt by issuing new shares, which could help boost economic growth, according to Yin Ming, a vice president at Baptized Capital in Shanghai.

  “The national team is behind it,” Yin said. “State funds will likely continue to be a market stabilizer.”

  For some investors, it’s a sign that state-directed funds are putting a floor under daily market swings – a development that presents short-term buying opportunities when the Shanghai Composite dips more than 1%  during intraday trading – but when this happens in the US its completely normal and defended as animal spirits that mean "stocks just want to go higher."

  

  

Digest powered by RSS Digest

• A Ukraine On The Verge Of Disaster Benefits No One

  Authored by Federico Pieraccini via The Strategic Culture Foundation,

  

  In the past three months, the lines of contact between Ukraine and the forces in Donbass have seen an escalation of considerable tension. Both the republics of Lugansk and Donetsk have suffered violent attacks at the hands of Kiev’s military forces. Of course all these violations are in stark contrast to what was established in the Minsk II agreements, in particular as regards the use of certain weapons systems.

  In addition to the military issues between Donbass and Ukraine, Kiev faces important internal struggle between oligarchs regarding economic issues. Symptomatic of this were the clashes in Avdeevka, then the attempts to capture the water filtration plant in Donetsk, and finally the blockade of coal transit from Donbass to Ukraine. All these have further deepened divisions between the components of the Ukrainian state’s power. The consequences of these events have led to greater instability in the country and decisive moves by the nationalist fringe alongside the Ukrainian SBU and other components of the military, who are the authors of the blockade of the railway lines between the Donbass and the rest of Ukraine. Intensifying the divisions within the country, the meeting between Tymoshenko and Trump has further increased tensions, with Prime Minister Volodymyr Groysman defining Timoshenko as the source of all problems, both economic as well are regarding corruption. Ukraine is politically divided, exacerbated by disputes between Poroshenko and Timoshenko, and these divisions are being exploited by foreign actors like Israel and Turkey, propping up the nationalist and banderist fringe within the National Guard battalion.

  External pressure is clearly exerted indirectly on the Poroshenko administration in order to force it to keep the extreme factions of the nationalist battalions under control. For his part, Trump, by meeting with Tymoshenko, has sent a clear signal that in the case of excessive chaos in Kiev, the succession of power has already been decided. In the same way, the IMF exerts pressure on Kiev, slowing down the funding necessary for Ukraine to survive.

  The danger that Western planners see is at the same time simple and delicate. On the one hand, there is a need to avoid a failure of the Ukrainian state, and nearly $18 billion of IMF aid serves that purpose. On the other hand, the withholding of IMF funding is applied whenever there is a need to get something done by the government in Kiev. An example can be easily seen with the escalation in Avdeevka that indirectly led the IMF to reduce the overall aid package, with the justification being that corruption remains high in the country. The goal was actually to avoid a complete breakdown of the Minsk II agreements and put a halt to the Ukrainian operation on Avdeevka. Even in the meeting between Tymoshenko and Trump, the strong signal sent to Poroshenko was clear: stop the nationalists and their provocations or there will be consequences.

  The subtle game that is being played in Ukraine sees many components involved, often with diverse objectives and methods. The nationalist component hardly responds to the oligarchs in Kiev and to the central authority. They are often the first to receive training and weapons from western colleagues serving in NATO. American and British instructors have for more than two years provided their services to this component in the country. The National Guard received the blessings of the neoconservative factions of American power, as confirmed by the presence of Lindsey Graham and John McCain in Ukraine a few months ago. In addition to support from the Atlantic networks and the local Ukrainian intelligence service (SBU), these battalions have Turkish support, which involves Islamic extremists in the National Guard. Moreover, they receive both political and economic support from infamous oligarch Igor Kolomoisky. Going straight to the problem, one can see that the National Guard, despite strong political and economic support is not able to deliver a decisive blow to the Donbass and inflict any significant damage, let alone organize an efficient offensive. The problem is therefore clear that the alliance between nationalists loyal to NATO/neocons, Turkish extremists, and Israeli oligarchs like Kolomoisky enable the nationalists to carry out provocations but not to organize a serious military offensive against well-fortified and organized positions of the Donbass republics. To attempt an offensive of this kind would at least need a real army that is well organized and motivated.

  Ukraine is back to the usual problems that emerged in 2014 and now plague military planners in Kiev. The Ukrainian army, essential to achieving a real push towards Donbass, lacks the motivation needed to fight. These considerations were already clearly known three years ago at the beginning of the infamous anti-terrorist operation (ATO) Kiev carried out in the east of the country. Two years later, Donbass is much stronger. Thanks to a variety of military acquisitions from Russia, as well as targeted training and an important fortification of their defensive positions, Donbass now has a defensive capability that must be taken into account.

  In this situation, there are multiple dangers that can unfold for Kiev. Poroshenko must give the nationalists and international networks connected to them the ability to operate virtually without restrictions in Ukraine. He was put in power exactly for that purpose. When this does not happen, as seen in Avdeevka and with the water-supply center in Donetsk, where National Guard battalions had to pull back, there are consequences. In his sense, the National Guard blockade on Donbass is, other than being part of the usual provocations between oligarchs, an explicit message aimed at Kiev, causing considerable economic damage. No wonder Poroshenko sent the army to remove the blockade, which, unsurprisingly, did not actually change the situation.

  The blockade actually obliged Kiev to buy coal from Russia, which was ironically left the only supplier. This fact was exploited by the same nationalists who created the blockade in the first place, blasting the Kiev government for buying coal from their enemy. In this mess, the Kiev government and Poroshenko should be aware of the consequences of excessive provocations against Donbass by the National Guard battalions. The ability of the Donbass to provide a firm response to any further aggression should be pondered by Kiev, even as tensions within Poroshenko’s inner circle continue to rise. The Ukrainian president is forced to support the nationalists and their rhetoric against "terrorists in the east" to ward off new Maidan.

  At the same time, he needs to by all means avoid a military response from the two separatist republics. Kiev is aware that it does not possess the capacity to conquer the Donbass in terms of personnel and equipment, and is also aware that if the conflict got out of hand, with the complete collapse of the Minsk II agreements, the DPR and LPR would have the capability to extend their boundaries decidedly to the south, setting their sights on the Ukrainian coastline along the Black Sea.

  Realistically, this scenario would be a nightmare for all the actors opposing the Donbass, especially for NATO and Poroshenko. Mariupol and Odessa appear to be the likely targets of a hypothetical new advance of the Donbass should the Minsk II agreements collapse. The Russian Federation and Donbass have made it amply clear that any new aggression from Ukraine will be met with a firm response. While this would not involve a direct attack on Kiev, it would establish a larger buffer zone that could include Mariupol and maybe even Odessa. This posture intends to create the necessary awareness in Kiev, and even in NATO, that it is not in their interests for an all-out war to be waged against Donbass.

  The consequences of these actions call directly into question the NATO strategy in the Black Sea. The ultimate purpose of NATO is not to save Ukraine from a non-existent Russian threat but rather to put continuous pressure on the Russian Federation in every possible way. The objective is not even to reconquer Donbass, something that is also unfeasible for the military planners in Brussels, but the continuum of tension on Russia’s borders, occupying the attention of Moscow and continuously creating hotbeds of tension on its borders. In this regard, the Ukrainian access to the Black Sea is fundamental for NATO. The continued presence of NATO ships in the Black Sea to carry out joint exercises with Ukraine violates the Treaty of Montreux and is done to exert pressure on Russia from the sea. To bypass the Montreux convention and have a semi-permanent presence, the United States intends to donate a couple of ships to the Ukraine Navy in order to change the flag of the vessels, thus ensuring NATO’s legal permanent presence in the Black Sea without violating the Montreux Treaty. The port of Odessa is central in these calculations and it is of no particular surprise that in the event of a Novorossiya offensive following a Ukrainian attack, both Odessa and Mariupol would be difficult to defend for the Ukrainian army. Already in 2014, both Mariupol and Odessa had been calculated as possible targets of a wider strategy to liberate the cities from Kiev’s forces.

  The bottom line is that the Kiev government is between two fires. On one side, the oligarchs battle each other, without regard for the life of Ukrainian citizens or the residents of Donbass, solely focussed on enriching themselves. On the other side, the western components in Ukraine (known as neoconservatives) fan the flames of conflict with military trainers and equipment banned by the Minsk II agreements, providing them to the Azov battalion, the most extremist wing of the National Guard. At the same time, Germany, and especially Russia, is gravely concerned over a possibility of the Ukraine economy defaulting, and of what that could mean in terms a huge wave of migration towards both countries, a situation Berlin would struggle to digest after all the migration coming from the Middle East over the last two years.

  A potential default of the Ukrainian economy, and resulting destruction of the country, overshadows any struggles between oligarchs, and even the battle against Donbass. Options for Putin, Trump and Merkel all seem to be on the table with economic (nationalization of industries in the Donbass, slowdown in lending by the IMF), political (Trump meets Tymoshenko, a rival of Poroshenko) and military pressure (strong Russian presence behind the two separatist republics) applied in every way to prevent an all-out war in Ukraine.

  The main danger is now clear to everyone involved – to Russia, the Donbass, NATO and Kiev. A new war between Donbass and Ukrainian would result in the defeat of Ukrainian forces, with consequences for NATO, since Donbass would hardly stop outside Mariupol and would instead proceed to Odessa. Kiev has a very weak capacity to mobilize motivated forces ready to sacrifice their lives for what are deeply corrupt oligarchs. This situation would cause an internal dilemma for NATO as was the case in 2014. Would NATO deploy its forces alongside those of Kiev to defend the ports in question, especially Odessa? If doubts where high three years ago, hardly anything has changed in recent years. NATO will not rally to the Kiev’s side. And the reasons remain the same, namely the risk of a direct confrontation with Russian troops, although Trump's recent actions in Syria have raised much concern in Moscow in relation to the Ukrainian situation. A war against Donbass could easily lead to a wider conflict between superpowers, something impractical for even the most hyped warmongers on the Atlantic sphere. Realistically, Donbass troops, after repulsing Ukrainian aggression, would go on the offensive, and enjoying clear superiority in the region, thanks to Russia as well as to a higher level of motivation, would probably make their way all the way up to Odessa, securing the entire coastline.

  The consequences of such a defeat would lead to the collapse of the central authority in Kiev, to an open war between oligarchical factions, to an end of loans from the International Monetary Fund, condemnation from European and American politicians, and to a definitive collapse of the Ukrainian economy. This would spell the end of business for Poroshenko and other business oligarchs, both in Kiev and in the West. Again, no one is interested in seeing such a scenario coming to fruition.

  It is also important not to underestimate the partial unwillingness of Moscow to support an open war on the offensive by the Donbass army, especially given the political and economic consequences that the West would visit on Moscow.

  The economic assistance that the Donbass would require from Moscow is another important consideration and something that the Russian Federation would prefer to avoid. It should, however, be stressed that in the unlikely event that Ukraine does not hold at bay its eagerness to wage war in Donbass, Moscow would openly side in favor of the Donbass, and the consequences for Ukraine and NATO would be disastrous, as we have seen. There would be enormous concern in such a scenario from Moscow, and the Russian Federation would take every step to avoid such a scenario, but if things got worse, Putin would be ready to support the advance of Novorossiya up to Odessa in order to secure once and for all the republics of Donetsk and Lugansk.

  All the provocateurs in Ukraine should be aware that playing the nationalist card can be dangerous and can even result in a defeat that, when compared to 2014-2015, would be dramatically worse, condemning Ukraine to an economic, social and political crisis without precedent or a way out. It literally could be the beginning of the disintegration of Ukraine as we know it today.

  

  

• Elliott Management Releases Klaus Kleinfeld's "Veiled Extortion" Letter

  Three days ago Arconic's CEO Klaus Kleinfeld was fired unceremoniously for "showing poor judgment," in a letter sent to Paul Singer, founder of hedge fund Elliott Management. Elliott has just released the letter and its response which claims Kleinfeld made "veiled suggestions that he might intimidate or extort Mr. Singer" over his behavior at a 2006 soccer match… involving "singing in the rain… in a fountain" and an indian head-dress.

  

  Mr Kleinfeld wrote…

  Dear Mr Singer,

   

  In the last eighteen months, we have enjoyed the unique attention and unlimited pleasure of multiple exchanges with various representatives of yours in every such way remarkable firm. Unfortunately. we have not yet had the pleasure to meet. More than once have I been wondering what a special person the founder of such a firm must be.

   

  It was much to my delight when I recently learned from Berlin what a phenomenal soccer enthusiast you must be. Quite a few people who accompanied you in Berlin in 2006 during and especially after the many matches you attended are still full of colorful memories about this obviously remarkable time; it indeed seems to have the strong potential to become lastingly legendary. How you celebrated your soccer enthusiasm and the "great time" you must have had in your Berlin weeks – unforgettable without a doubt – left a deep impression on them.

   

  As a token of my appreciation to learn about this completely "other side" of you, I allow myself to send you a little souvenir, which might bring back some "vivid (hopefully positive) memories": The official match ball of the FIFA World Championships 2006 (called "Teamgeist", in English "Team spirit"). I would be honored if it found an adequate place on your memorabilia shelfs.

   

  Sincerely,

   

  Klaus Kleinfeld

   

  PS: If I manage to find a native American Indian's feather head-dress I will send this additional essential part of the memories. And by the way: "Singing in the rain" is indeed a wonderful classic — even though I have never tried to sing it in a fountain.

  

  Which seems innocent enough until you read the response from Elliott's chief counsel to Arconic's board…

  Dear Directors of Arconic Inc. ("Arconic" or the "Company"):

   

  I am the General Counsel and Chief Legal Officer of Elliott Management Corporation. On April 11, Paul Singer received the attached letter and a soccer ball, both apparently sent to him by Klaus Kleinfeld.

   

  As for the letter, it appears to have been sent from Dr. Kleinfeld because it is on stationery with his name printed on it, it appears to bear his signature, it was sent from Arconic's offices at 390 Park Avenue, and it was delivered by an Arconic messenger. Assuming therefore that the letter is from Dr. Kleinfeld, we find it to be an irresponsible and inappropriate communication. While much of what it says doesn't make sense, we do understand Dr. Kleinfeld to be making veiled suggestions that he might intimidate or extort Mr. Singer based on Mr. Singer's family trip to Germany in 2006 when he attended the World Cup. This is highly inappropriate behavior by anyone and certainly by the CIO of a regulated, publicly traded company, in the midst of a proxy contest, and it raises a number of obvious issues. Further, we assume that: (I) Dr. Kleinfeld was not authorized by the Board to make this communication, and (2) you will assess with your counsel, as we will, the implications of this unusual communication to a dissenting shareholder in the context of a proxy process.

   

  Dr. Kleinfeld should understand that this conduct will not inhibit Elliott's efforts on behalf of shareholders. We are interested in shareholder value and putting Arconic on the right track, not games and false innuendo even if couched in clever ambiguities.

   

  If the letter is not from Dr. Kleinfeld, as unlikely as that seems, then I think he and the Board need to know that someone purporting to be him, using your building and messenger service, is behaving in an irresponsible manner. I am certain that you would want to know about that and stop it. Of course, we expect that you will let us know if this is not in fact a letter from Dr. Kleinfeld and tell us what steps you are taking so that we may likewise take appropriate steps.

   

  Yours truly,

   

  Richard B. Zabel

  We can only imagine what shenanigans Mr. Singer was up to. But this does indeed reflect crushingly on Mr. Kleinfeld – is this really the way the world works?

  Full original letters here.

  

  

• Is World War The Twisted Cure For A Doomed Economy? "Signals for War Are Fiscal"

  Authored by Mac Slavo via SHTFplan.com,

  

  The march to war is deafening.

  But the reasons for it go beyond the elements of military conflict and political intrigue.

  Underlying it all, the reasons are economic.

  With a nothing-doing economy that has long dragged on the American soul, there is a growing temptation to wipe the slate clean, and launch a wider war – all with the wider aim of igniting a new economic engine.

  Theoretically, the economy would spruce up on the same gin that fueled WWII – and not only delivered a victory, but solidified America a prosperous superpower while vanquishing the Great Depression.

  The thought is twisted, and perhaps more and more likely everyday. Something like economic gains off of spilling blood – true military industrial complex stuff.

  I hope they know what there doing, and that the rest of the country can maintain a strong moral fiber, because if that scenario is green-lighted, things could get pretty grim, pretty quick.

  The constant Greg Hunter of USAWatchdog.com speaks with economist Martin Armstrong, who sees war coming as a result of the bad economy:

  Former hedge fund manager Martin Armstrong, who is an expert on economic and political cycles, says, “You have to understand what makes war even take place? It does not unfold when everybody is fat and happy. Simple as that. You turn the economy down, and that’s when you get war. It’s the way politics works.”

  Martin Armstrong-Economic Downturn Will Take World to War

  Startlingly, there were reports (albeit unconfirmed) in the foreign press back in 2008 – in the immediate wake of the economic crisis – that the RAND Corporation was suggesting that a new world war could be started in order to jump start and revive the economy.

  It named Russia, China, Iran or another Middle Eastern country and/or North Korea as potential opponents, though the latter was considered too small time for a real economic boost.

  Nine years after that crisis, the economy has not recovered, and remains in the doldrums, it seems that the option for further has gone full-blown.

  As Paul Watson and Yihan Dai wrote back in 2008:

  According to reports out of top Chinese mainstream news outlets, the RAND Corporation recently presented a shocking proposal to the Pentagon in which it lobbied for a war to be started with a major foreign power in an attempt to stimulate the American economy and prevent a recession.

   

  China’s biggest media outlet, Sohu.com, speculated that the target of the new war would probably be China or Russia, but that it could also be Iran or another middle eastern country. Japan was also mentioned as a potential target for the reason that Japan holds the most U.S. debt.

   

  North Korea was considered as a target but ruled out because the scale of such a war would not be large enough for RAND’s requirements.

   

  […]

   

  One would hope that good people, or at least sane people who don’t wish to start a global nuclear war, will oppose the RAND proposal, such as top the military generals who threatened to quit if Bush ordered an attack on Iran. Admiral William Fallon, the head of US Central Command, quit in March last year as a result of his opposition to Bush administration policy on Iran.

  Now that we are seeing a plan long in action playing out, there’s a good chance that our time is up.

  Do you think that Wall Street has already planned the after party?

  

  

• Subprime Pet Rental Company Files For Bankruptcy

  Two months ago, Bloomberg’s Patrick Clark penned an article that promptly went viral as it touched on a rather unorthodox topic: a pet leasing, or rather rental, company aimed at subprime borrowers who could not afford to buy their pet outright.

  The company in question is Wags Lending, a/k/a Bristlecone, was founded by Dusty Wunderlich in 2003. A brief background from the original BBG piece:

  Wunderlich dreamed up Wags Lending in 2013, then used the pet-leasing business to launch an improbable collection of financing vehicles—writing leases against furniture, wedding dresses, hearing aids, and custom auto rims. In a little more than three years, his company has originated 66,000 leases for just over $100 million. He once worked out a plan to lease cattle to dairy farmers, though plummeting commodity prices soured the economics. (He got far enough to decide that if a cow gave birth during the terms of the lease, the lessee got to keep the calf.) In another idea that never reached the market, he explored lease financing for funerals. “We like niches where we’re dealing with emotional borrowers,” Wunderlich said.

  But mostly pest: “Because dogs can be expensive, and not everyone who wants a fancy one can afford to pay cash or use a credit card. Because others, like Sabins, are more eager to bring home their new furry friend than to read the fine print of their contract. But mostly because—thanks to a 36-year-old Nevadan who ditched a career in private equity to help subprime borrowers finance purebred pets—they can.”

  

  Dusty Wunderlich

  The 36-year-old in question had one simple idea: in the future nobody will own anything, everything will be leased:

  “When I take a good hard look at what the world will be like in 10 years, I think most things are going to be on lease,” said Dusty Wunderlich, chief executive officer of Bristlecone Holdings LLC, the Reno, Nevada-based company that operates Wags Lending.

  To be sure, Wunderlich certainly practiced what he preached:

  Wunderlich rents his apartment. He leases his car. He owns his horse. He’s drawn to the rugged individualism expressed in the novels of Ayn Rand and the blog Cowboy Ethics, but he hastens to argue that while he profits off high-cost lending, he’s also improving the lives of subprime borrowers. He is, he writes in a mission statement on his personal website, “living in a Postmodern culture while maintaining my old American West roots and Christian values.”

  Taking his idea further, he decided to target one particular niche of subprime clients: pet buyers who have a less than pristine credit rating. Which is why the article quickly became known as the “subprime pet leasing” piece.

  

  On the surface, Wunderlich had a great, and lucrative, idea even if the loss provisions were sure to be quite high. There was just one problem, as the company’s financially troubled clients soon found out: what was a $2,400 dog purchase would end up costing $5,800 when accounting for total interest outlays. There was another problem: the clients would quickly realize that hidden in the small print was the interest: a whopping 70% APR, double more than double the average credit card.

  The Sabins had bought their new dog, Tucker, with financing offered at the pet store through a company called Wags Lending, which assigned the contract to an Oceanside, California-based firm that collects on consumer debt. But when Dawn tracked down a customer service rep at that firm, Monterey Financial Services Inc., she learned she didn’t own the dog after all.

   

  “I asked them: ‘How in the heck can I owe $5,800 when I bought the dog for $2,400?’ They told me, ‘You’re not financing the dog, you’re leasing.’ ‘You mean to tell me I’m renting a dog?’ And they were like, ‘Yeah.’ ”

   

  Without quite realizing it, the Sabins had agreed to make 34 monthly lease payments of $165.06, after which they had the right to buy the dog for about two months’ rent. Miss a payment, and the lender could take back the dog. If Tucker ran away or chased the proverbial fire truck all the way to doggy heaven, the Sabins would be on the hook for an early repayment charge. If they saw the lease through to the end, they would have paid the equivalent of more than 70 percent in annualized interest—nearly twice what most credit card lenders charge.

  It wasn’t just the Sabins:

  “There is just no way I should pay over $5000 for a $2000 puppy,” wrote one customer in an April 2014 complaint collected by the Federal Trade Commission after financing a Yorkshire terrier from a Kennesaw, Georgia, pet store with a lease from Wags Lending. (That complaint and the others that follow were directed at Monterey Financial by customers who had financed high-end pets through Wags Lending.) “The rep … told me the payments I had been making are rental [fees],” wrote another surprised lessee. “For a dog?? They are renting animals?? No way! Yes it’s true!”

  Which goes back to square one: “The complaints raise a valid question: Why would anyone walk into a pet store to buy an animal and decide, instead, to lease?” Well, because some people can be fooled all the time. There was another reason:

  Wunderlich considered various credit models before he landed on the closed-end lease, which gave him free rein from usury laws in all 50 states. It seemed well-suited to an era when the housing crisis was threatening to sour Americans permanently on mortgages, credit card loans, even the concept of ownership.

  Despite the growing customer complaints, the idea seemed so good, the money flowed in.

  In 2014, [Wunderlich] landed a meeting with SenaHill Partners LP, a New York-based merchant bank firm that invests in financial technology startups. It didn’t take long for Justin Brownhill, a partner at SenaHill, to sense an opportunity in the company’s data-driven lending model and point-of-sale marketing strategy. Five minutes into the meeting, Brownhill excused himself. “I walked out and grabbed my three other partners and said, ‘I think we have something special here,’ ” Brownhill said.

   

  Wunderlich parlayed that meeting into a seed round of $1.1 million. SenaHill also connected him with a firm that furnished Bristlecone with a $75 million line of credit, lowering Bristlecone’s borrowing costs.

  For a while everything was going great. As Clark concluded his March 2017 piece, “For now, Wunderlich is still focused on launching new credit products. He recently finalized a deal with a Utah-based bank that helps online lenders use the state’s lender-friendly laws to make loans elsewhere. That will let Bristlecone expand its product offerings to include term loans, allowing it to extend more enticing rates to borrowers with better credit profiles and to finance services like veterinary care, elective surgery, even funerals—not just tangible assets like dairy cows and Labradoodles.”

  “We’ve gone a long way to making sure that what we’re doing is within the confines of the law,” Wunderlich said. “Is there a regulator one day that’s going to just absolutely not like what we do and pick a fight with us? Probably. And we’ll have to hash it out.”

  Which brings us to today, when just 7 weeks after these words were put to html, something went terminally wrong, and it didn’t even involve a regulator cracking down on the predatory pet renter. It was a good old fashioned bankrutpcy, because overnight, Wags – the up and coming subprime pet renter – admitted that its business model was terminally flawed when it filed for Chapter 11 bankruptcy protection.

  

  And yet, even in bankruptcy, the company remained shady because unlike other corporations which file Chapter due to an excessive debt burden, listed a modest $50,000-100,000 in liabilities owed to less than 50 creditors…

  

  … even as it disclosed assets up to 5 times as high. Why not just sell assets to cover liabilities and continue operating instead of impairing vendors such as Affordable Pups, All Pets Club, American Dog Club, Bark Avenue Puppies and so on?

  

  Perhaps we will get some answers when the affidavit in support of the bankruptcy is filed, but somehow we doubt it.

  In any case, keep an eye on the subprime entrepreneur Dusty Wunderlich: we are confident that after the “subprime pet rental” venture implosion, he will reappear soon with some new idea, one whose APR this time may be in the triple digits.

  

  

• What A War With North Korea Would Probably Look Like

  Authored by Brandon Smith via Alt-Market.com,

  

  Back in 2013 during the last major flare up between the U.S. and North Korea I wrote an extensive analysis on the North Korean wild card and how it could be used by globalists as a catalyst for international economic instability titled 'Will Globalists Use North Korea To Trigger Catastrophe?' As I have warned consistently over the years, like Syria, North Korea is a longstanding chaos box; a big red button that the elites can press any time they wish to instigate a chain of greater geopolitical tensions. The question has always been, will they actually use it?

  Well, it appears that under the Trump administration the establishment might go for broke. I have not seen U.S. war rhetoric so intense since the second invasion of Iraq, and all over missile tests which have been standard fare for North Korea for many years. With whispers by Trump aides of a possible 50,000 boots on the ground in Syria, and open discussion of preemptive strikes in North Korea, this time kinetic conflict is highly likely.

  Yes, we have seen such military pressures before, but this time feels different. Why is an aimless quagmire war with massive potential global financial repercussions more likely under Trump? Because Trump ran under a nationalist conservative banner, and he will forever be labeled a nationalist conservative even if his behavior appears to be more globalist in nature. Rhetoric is often more psychologically powerful in the minds of the masses than action. Therefore, EVERYTHING Trump does from now on will also be labeled a product of the “nationalist conservative” ideology; including all of his screw-ups. And, with Trump in office the establishment is perfectly happy to pursue actions once considered taboo, because demonizing conservatives and liberty proponents is one of their primary objectives.

  When the real insanity starts, liberty movement activists will gnash their teeth and scream at the top of their lungs that Trump is “not acting like a conservative,” so how can conservative thinking be blamed by extension? But these people just don’t grasp the thought processes of the human mind. No matter how much we try to separate ourselves from the Trump-train if (or when) he goes full-bore globalist, our efforts will be futile. The mainstream media has spent considerable time and effort making sure that all of us are lumped in with the so-called “alt-right.”  Remember, I tried to warn the movement about this long before Trump won the election.

  Currently, there are questions as to whether or not a naval task force is en route to North Korea.  I would not trust the latest reports that all units are headed to Australia when Vice President Mike Pence is in Japan yesterday saying "the sword stands ready".  Could this be more posturing or a precursor to a strike scenario? I am reminded of the U.S.S. Maddox which was sent to patrol the waters off of Vietnam, the same destroyer that reported an attack by North Vietnamese torpedo boats which was used as justification for the initiation of the Vietnam War. As it turned out, no such attack actually occurred.

  The presence of a U.S. fleet off North Korea could only be intended to instigate further aggression, not defuse the situation.

  So, if war with North Korea is inevitable given the circumstances, what would such a war look like? Here are some elements I think are most important; elements that make the war almost unwinnable, if winning is even the purpose…

  North Korean Air Defense

  The North Koreans spent the better part of the last war with the U.S. being heavily battered by air bombardments. They have had plenty of time since then to consider this problem and prepare. Even the most gung-ho American military minds are forced to admit that using only air based attacks in North Korea is not practical. And where we have been spoiled by steady video streams of laser guided hell dropped on Iraqi and Afghani targets in the past, don’t expect things to go so easily in North Korea.

  While North Korea is still rife with economic problems (like every other communist and socialist nation), they still have an industrial base and produce many of their own arms. This includes and extensive missile net backed by a maze of radar systems. Their air force is by all accounts obsolete, but as I have mentioned in the past, advanced missile defense is the wave of the future. It’s cheaper and can render expensive enemy air force and naval units impotent.

  North Korea uses an indigenous built surface-to-air missile (SAM) system called the KN-06 which is as capable as some Russian SAM systems. They also field huge numbers of MANPAD (man-portable air defense) units against planes and helicopters attempting to dodge radar defenses at low altitudes. This is layered on top of a vast array of anti-aircraft artillery. And, most of this anti-air apparatus is either mobile or based underground.

  What this means is, a ground invasion is the ONLY way to attack North Korea effectively and make room for air units to strike interior targets.

  Underground Facilities

  The Pentagon estimates at least 6,000 to 8,000 underground military facilities in North Korea. New bases are being discovered all the time.  While “bunker buster” bombs can possibly damage these facilities, it is unlikely that they would be completely destroyed or rendered ineffective. There is also an estimated 84 large tunnels through mountains on the southern border which would allow an immediate invasion by North Korean ground forces into South Korea. Only four of these tunnels exits have been found and blocked by South Korea.

  It is important to remember that underground infrastructure has always been the bane of the modern western military. These facilities will not be taken by air. They will have to be taken the hard way — with ground troops.

  North Korean Infantry

  In 2013 the Department of Defense reported North Korean ground forces at around 950,000. This, of course, does not count their nearly 8 million infantry reserves. They also boast over 200,000 highly trained paramilitary soldiers. North Korea has no means whatsoever to project these forces overseas against the U.S. or anyone else other than South Korea. The only way they can do damage to U.S. forces is if we show up on their doorstep.

  Since a ground invasion is the only way to proceed with what will obviously be “regime change” in North Korea, U.S. forces will be facing an endless mire of mountain warfare worse than Afghanistan with limited air support options. If it comes down to a war of attrition rather than superior technology, victory will be impossible in North Korea.

  The Nuclear Option

  The consensus view among military analysts is that North Korea will never attempt to use nukes offensively because the resulting retaliation by the U.S. would be devastating.  But you often do not hear much discussion about NK using nukes defensively, and what that would mean for an invading army.

  I agree that though the mainstream media is bombarding us constantly with images of a psychotic dictatorship, North Korea is not insane enough to use nukes against the U.S. or its allies outright. If such an event did occur, I would immediately suspect the possibility of a false flag because there would be zero gain for North Korea. That said, in the event of a ground invasion into North Korea, the use of nuclear weapons becomes highly advantageous for Pyongyang.

  Consider this, with vast numbers of U.S. ground forces operating in the region, nuclear retaliation by the U.S. is simply not going to happen.  A pullout of most troops would have to take place. North Korea needs only one nuke strike to destroy a U.S. fleet or hit a large civilian target in South Korea killing potential millions or hit a U.S. troop base in South Korea killing tens of thousands of American soldiers.

  Once we commit ground troops into the region, we make a nuclear attack USEFUL to North Korea, when it never would have been useful before. This is why the preemptive strike rhetoric based on a rational of stopping a “more nuclear capable” North Korea is either pure stupidity or an engineered crisis in the making.

  The Chinese Question

  Is China’s strange shift in support of tougher actions against North Korea legitimate? Well, if it is, then I think this would support my longtime assertion that China is NOT anti-globalist at all, but just another branch of the globalist cabal. Perhaps Trump’s refusal to label them currency manipulators is also evidence of this. That is a discussion for another time, though.

  China’s sudden softening of stance against U.S. pressures on North Korea seems to me to be the most blatant signal that an actual war is coming. If China refuses to present military or economic repercussions to act as a deterrent to invasion, then an invasion is likely to happen.  This does not mean, though, that a future crisis between the U.S. and China is not scheduled.

  In fact, an invasion by America into North Korea opens numerous doors to all kinds of crisis events the establishment can exploit. For example, how many people are naive enough to expect that U.S. air maneuvers will respect Chinese air space restrictions? I hope not many.  Having American military units in a war stance so close to the Chinese border is a recipe for disaster, and I am not necessarily referring to military disaster.

  War, contrary to popular belief, is not good for the economy. In fact, war is the perfect poison for economic trade and production. The U.S. in particular is utterly dependent on the international use of the dollar as the world reserve currency. Without this status, the American economy is dead in the water. China is a central pillar in global trade and could, with the help of a few other nations, kill the dollar's reserve status very quickly.

  If you are curious as to why international financiers would be interested in undermining the U.S. economy in such a way, I suggest you read my article The Economic End Game Explained. The greater point is this — a war with North Korea would have nothing to do with North Korea. It would only be a means to a greater end. There are those people out there who claim to be "conservative" that always weasel out of the woodwork in times like these to pound the war fever drum.  But if you think that forced regime change overseas is America's job or duty you are not a conservative, you are a statist.

  I also cringe at the crowd of dupes that constantly bubbles to the surface claiming this time around, the invasion will be "easy", parroting the party line.  "Done in two months!", they say.  The delusion inherent in this thinking is astounding, and comes from the old-guard Republican/Neo-Con ideology.  Remember how quick and cheap they said Iraq and Afghanistan would be?  At bottom, there is little or nothing to be gained by Americans in this kind of conflagration.  So we should be asking ourselves, who actually would gain from it?

  

  

• No Obamacare In Most Of Iowa, Tennessee – What Happens? Fallback Plans?

  Authored by Mike Shedlock via MishTalk.com,

  Nearly the entire state of Tennessee has a single Obamacare provider. In sixteen counties, none of this year’s providers want to do business.

  Mississippi, Alabama, South Carolina, Oklahoma, Alaska, and Wyoming are states where there is only a single provider for the entire state. Iowa is likely to be covered by a single provider next year. Most of North Carolina, Florida, Missouri, and Arizona are also in a single-provider situation.

  Enrollment for 2018 starts in November. Will the problem be fixed by then? If not, What Happens if Places Have No Obamacare Insurers?

  

  The markets created by the Affordable Care Act have always relied on the voluntary participation of private companies. If the government set up the right conditions for the market, the thinking went, insurers would want to jump in. But, as Sarah Kliff at Vox.com has reported, the law contained no real backup plan if that vision didn’t work out.

   

  So far, there are parts of Tennessee where none of this year’s insurers want to sell insurance next year. Other counties have only one carrier, and in some of them, that carrier is looking shaky.

   

  If insurers do all decide to exit a market, no one is exactly sure what will happen next. Some experts have brainstormed about possible workarounds, but all would entail uncharted legal territory.

   

  Senator Lamar Alexander of Tennessee, the state currently at greatest risk of bare counties, has introduced a bill that would create options for customers shut out of their Obamacare market. But even if Congress passed such a law, regulators would have to work very fast to make anything happen before next year’s enrollment period, which begins in November.

  No Backup Plan

  Vox asks What if Obamacare Insurers Falls to Zero?

  Multiple sources tell me that White House staff held a meeting today to discuss cost-sharing reduction subsidies — that $8 billion Obamacare program whose fate still hangs in limbo. Ending these payments could “blow up” the health law’s marketplaces, but President Trump has so far waffled on what he’ll do about the issue. The meeting didn’t include any outside advisers or industry officials, only administration staff.

   

  Right now there are 16 counties in Tennessee where no health insurer wants to sell Obamacare coverage. Iowa could be next: Half its Obamacare insurers announced this month that they would no longer participate in the marketplace. That leaves 94 of the state’s 99 counties with just one insurer — and regulators there aren’t totally sure that plan, Medica, will stick around.

   

  “We don’t have any commitment from the two carriers that remain that they will be there,” says Doug Ommen, Iowa’s insurance commissioner. “They’re not required to file with us until June. Certainly we’re hopeful, but unless Congress acts, our market will continue to be very unstable.”

   

  What happens if no one wants to sell coverage? Does the law have any fallback plan? The short answer is no. There is no backup plan for places where no insurer wants to sell Obamacare coverage.

   

  Even before the election, some big insurers had decided that the Obamacare marketplaces were not good for their bottom lines. Aetna and UnitedHealth mostly withdrew in 2016, leaving lots of places with just one insurer.

   

  Since the election, health insurers have only gotten more skittish. Humana announced in February that it would no longer participate. That left those 16 Tennessee counties without any plans, and many more counties with just one option.

  Ryan’s Folly

  The articles mentioned that Trump could call up providers and bully them into offering coverage. But does that make any sense from a party that wants to Kill Obamacare?

  The system is set up to implode and there is no point to doing anything until it does. After an implosion, there will be bipartisan support to do something. Right now there is no bipartisan support to do anything.

  The folly of House Speaker Paul Ryan’s ill-fated attempt to fix the problem is readily apparent.

  His poor decision to attempt to fix the unfixable accomplished nothing useful, but it did move partial ownership of the problem to Republicans.

  

  

• Latest In Silicon Valley 'Fringe Benefits': Paid Time Off To Protest Trump

  Silicon Valley’s tech giants are world renowned for their random employee ‘perks’ which include everything from free lunches prepped by expensive chefs, to free massages, nap pods and tricked out game rooms.

  

   

  But the latest trend in Silicon Valley ‘fringe benefits’, which includes unlimited time off to protest the Trump administration, feels a little bit less like an attempt to attract and retain talent as it is an attempt to push a political agenda.

  Nevertheless, as the Washington Post points out today, companies like Fauna of San Francisco are offering their employees unlimited paid time off to protest Trump in any way they see fit.

  Fauna, a San Francisco-based database start-up, recently began allowing its 13 employees to take unlimited paid leave to participate in rallies, vote, write letters to elected officials and take part in other civic activities. Before February, employees could take time off on an as-needed basis. But the political climate — and polarization — after President Trump’s inauguration called for more defined measures, said Amna Pervez, director of recruiting and retention.

   

  “Since there’s been such a divide in our country, we felt we should be very explicit about our policy,” Pervez said, adding that the company also provides unlimited vacation time. “We want our employees to know that we absolutely support the betterment of our country. People can take whatever they feel like they need to make a meaningful difference.”

   

  A number of other start-ups, including Turbine Labs, Buoyant and Jelly Industries, have signed on to do the same. The new policies come as technology firms and other companies take a stand against the Trump administration’s plan to tighten restrictions for foreign workers. On Tuesday, Trump was expected to sign an executive order that would impose new restrictions on H1-B visas, a type of temporary work visa often used by firms to recruit and employ highly skilled workers.

  Meanwhile, even Facebook joined in on the trend allowing employees to take May 1st off to attend a “pro-immigration” rally…

  Facebook, for example, is allowing its employees to take time off to participate in pro-immigration rallies on May 1. The company, which relies heavily on foreign workers, informed employees and contractors last week that they would not be penalized for missing work to protest, Bloomberg News reported Tuesday.

   

  “At Facebook, we’re committed to fostering an inclusive workplace where employees feel comfortable expressing their opinions and speaking up about issues that are important to them,” a company spokesman said in an email. “We support our people in recognizing International Workers’ Day and other efforts to raise awareness for safe and equitable employment conditions.”

   

  “We will define this as we grow,” Gómez said. “But my hope is that policies like this become the norm. When Google began giving out free lunches, everyone else followed. Why should this be any different?”

  Of course, this latest trend is afflicting not just Silicon Valley but our institutions of higher learning as well.  As we pointed out last night, one ASU professor recently allowed her students to opt out of a final exam in exchange for organizing a campus protest of Trump.

  But don’t worry, there are some ground rules for Silicon Valley’s snowflakes: no violence, or activities that make others feel threatened…but what good is a disaffected liberal protest without a little property destruction to stick it to ‘the man?’

  

  

• Russia Reveals First Pics Of Top-Secret Arctic Base Filled With Reindeer-Riding Special Forces

  After an ‘icy’ (pardon the pun) meeting between Rex Tillerson and Russia Foreign Secretary Sergei Lavrov last week in Moscow, Vladimir Putin has just released the first public photos of a giant, top-secret military base recently built on the arctic island of “Alexandra Land.”  According to media reports, the base is believed to be fully-armed with missile systems and nuclear-ready fighter jets.

  A virtual tour of the facility can be viewed here.

  

  

  

   

  Per The Sun, Russian economists figure the arctic outpost could hold the key to the Kremlin unearthing almost $25 trillion of oil and gas buried deep beneath the snow.  And with that kind of money on the line, it’s only natural that the base would be heavily fortified with nuclear ready fighter jets and reindeer-riding specials forces.

  More than 150 troops will be based at the clover-shaped compound – which is decked out in the red, white and blue of the Russian flag.

   

  And more worryingly, Moscow’s defence minister Sergei Shoigu confirmed nuke-ready Su-34 fighter jets will be deployed at a nearby air base.

  

  

  

   

  The 150,000 sq ft (14,000 sq m) facility is designed to house 150 personnel, on 18-month tours of duty, and includes living quarters, a cinema, a chapel, a gymnasium, a billiards room and an orangery.

  

  

   

  Meanwhile, in a heaping dose of the obvious, Defense Secretary James Mattis confirmed: “Russia is taking aggressive steps to increase its presence there.” 
  

  

  

   

  We’re still awaiting confirmation of whether the gallons of vodka required daily to operate such a facility will be imported or distilled on the premises.

  

  

• John Burbank Shuts Down His Long-Short Hedge Fund

  We almost made it a full month without a prominent hedge fund shuttering – an eternity in an age when ETFs and passive vehicles soak up several billion in capital each day at the expense of “active” managers – and then Bloomberg spoiled the streak when moments ago it reported that John Burbank, one of the handful of investors who made a killing from shorting subprime, and head of the $2.4 billion Passport Capital is shutting down one of his core hedge funds, the latest in a string of closings hitting the industry.

  Passport Capital’s Long-Short Strategy Fund is winding down and will return money to investors. The fund, which had an AUM of $833 million as of December 31, and $636 million as of March 17 according to HSBC, lost 2.1% in the first two months of this year. In 2016 the Long-Short fund lost 11.8% reversing its 2015 gains, when Passport Long/Short gained 10.1%.

  

  A catalyst for the closure may have been a January 2017 decision by the San Bernardino employees fund to pull its funds from Passport.

  

  Bloomberg adds that the firm’s flagship Passport Global Strategy Fund will remain open.

  A recent report by Hedge Fund Research showed that more hedge funds closed in 2016 than in any year since the financial crisis. Also on Wednesday, Guard Capital told investors that it’s closing its $885 million macro hedge fund. Last month, former Goldman Sachs trader Eric Mindich said he’s winding down his $7 billion firm, Eton Park Capital Management, which was one of the biggest hedge fund startups when it launched 13 years ago. In September, Richard Perry threw in the towel on his almost three-decade-old hedge fund.

  Many more will follow, because as Goldman explained earlier this week, in a centrally-planned market, one which never falls, active returns are no nearly enough to prevent an LP exodus.

   

  

  

  

Digest powered by RSS Digest

• Goldman Pours Cold Water On Trump's Fiscal Stimulus Plan

  Goldman Sachs' Chief US Political Economist Alec Phillips writes that tax reform faces a risk of failure, but tax cuts remain likely… in 2018 and investors need to stay realistic about the impact of fiscal stimulus.

  President Trump’s campaign proposals initially raised expectations of several forms of fiscal stimulus, driving investor optimism on both infrastructure spending and various elements of tax reform. However, we expect only tax cuts to have a meaningful effect on growth over the next couple of years. Three risks are behind this view: tax reform failure, fiscal constraints, and delayed enactment.

  Debates, delays, distractions

  First, tax reform faces a real risk of failure. If Republicans pursue revenue-neutral tax reform, they are likely to encounter the same challenges they encountered in passing their health legislation. Inclusion of controversial proposals like the border-adjusted tax (BAT) or even the repeal of corporate interest expense deductibility, for example, could sink the effort. Views on these issues do not follow traditional party lines, which could easily lead to some Republican opposition (we have already seen significant opposition to the BAT, for example). With few if any Democratic lawmakers likely to vote for the tax bill, Republicans would need nearly unanimous support from their own party. Thus, while revenue-neutral tax reform might be preferable from a policy perspective, imposing this restriction would lower the odds of enactment by next year.

  In light of the challenges tax reform faces, we believe that President Trump, who did not emphasize revenue-neutrality during the campaign, is likely to eventually endorse more limited reforms that result in a net tax cut. However, the size of such a cut would be limited by fiscal constraints; centrist Republican lawmakers seem especially likely to balk at large tax cuts that would eventually require deep spending cuts to maintain fiscal sustainability. Dynamic scoring and other budget accounting strategies might provide several hundred billion dollars’ worth of room for a tax cut in 10-year budget projections, but alone would allow for only a very modest cut. Our current expectation is a tax cut of $1.75tn over ten years, taking effect in 2018.

  While Republican leaders have prognosticated that they might take the first vote on tax legislation as soon as May and enact a bill by August, the risk is skewed toward delays, in our view. Enactment of simple tax cuts should not take long—it took the Bush administration until only May to enact the 2001 cuts—but a lengthy debate over complex tax reform that ultimately fails could cause delays. Likewise, an effort to revive health legislation could also push the start of the tax debate to mid-year or later. And, while not directly related, fiscal deadlines such as the April 28 and September 30 expiration of spending authority and the debt limit deadline we expect between August and October are likely to distract from tax legislation.

  A peek at the fiscal impact

  We expect Congress to pass tax legislation sometime between 4Q2017 and 1Q2018. However, the potential fiscal impact is likely to become clear in the next couple of months, for two reasons. First, the White House is expected to submit a budget proposal to Congress in mid-May, and will need to clarify its intentions on the size of a tax cut at that point. Second, in order to pass tax legislation via the “reconciliation” process, Congress must first agree on a budget resolution providing instructions for the tax-writing committees to do so. These instructions must include a specific amount by which revenues should be reduced; once this figure is finalized, which we expect in May or June, a larger tax cut would not be possible without bipartisan support.

  Holding out hope

  While we expect the outlook for fiscal stimulus to become much clearer in the next couple of months, the consensus view is harder to discern. Our basket of high-tax stocks has given up all of its post-election relative gains (see pg. 10). That said, we believe the market consensus view is still for some tax legislation to pass. Prediction markets, for example, suggest around 60-70% odds of individual and corporate tax cuts being enacted this year. And the equity market continues to react negatively to perceived setbacks on tax reform, indicating that hopes of tax reform continue to be at least partly priced in.

  A tax, not a spending story

  Other forms of fiscal stimulus are likely to be fairly minor. The outlook on infrastructure is uncertain, and we expect changes to consist mainly of tax policies aimed at boosting private-sector activity rather than public spending. President Trump has also proposed a $54bn (0.3% of GDP) per year increase in defense spending, but we expect a smaller increase in overall net spending. One potential offset to the stimulus we expect is a reduction in subsidies under the Affordable Care Act (ACA), but our estimates assume no change in subsidies at this point.

  

  The economic upshot

  If fiscal policy plays out as we expect, the boost to growth would be worth around 0.3pp each in 2018 and 2019. The effects will likely be concentrated in 2018 but extend into 2019, as the policy changes will likely take more than one year to be fully reflected in the level of spending and tax receipts. All told, market participants anticipating fiscal stimulus will need to look farther out for the positive impact they expect.

  

  

• Run For Your Life: The American Police State Is Coming To Get You

  Authored by John Whitehead via The Rutherford Institute,

  “We’ve reached the point where state actors can penetrate rectums and vaginas, where judges can order forced catheterizations, and where police and medical personnel can perform scans, enemas and colonoscopies without the suspect’s consent. And these procedures aren’t to nab kingpins or cartels, but people who at worst are hiding an amount of drugs that can fit into a body cavity. In most of these cases, they were suspected only of possession or ingestion. Many of them were innocent… But these tactics aren’t about getting drugs off the street… These tactics are instead about degrading and humiliating a class of people that politicians and law enforcement have deemed the enemy.”—Radley Balko, The Washington Post

  Daily, all across America, individuals who dare to resist—or even question—a police order are being subjected to all sorts of government-sanctioned abuse ranging from forced catheterization, forced blood draws, roadside strip searches and cavity searches, and other foul and debasing acts that degrade their bodily integrity and leave them bloodied and bruised.

  Americans as young as 4 years old are being leg shackled, handcuffed, tasered and held at gun point for not being quiet, not being orderly and just being childlike—i.e., not being compliant enough.

  Government social workers actually subjected a 3-year-old boy to a forced catheterization after he was unable to provide them with a urine sample on demand (the boy still wasn’t potty trained). The boy was held down, screaming in pain, while nurses forcibly inserted a tube into his penis to drain his bladder—all of this done because the boy’s mother’s boyfriend had failed a urine analysis for drugs.

  Americans as old as 95 are being beaten, shot and killed for questioning an order, hesitating in the face of a directive, and mistaking a policeman crashing through their door for a criminal breaking into their home—i.e., not being submissive enough.

  Consider what happened to David Dao, the United Airlines passenger who was accosted by three police, forcibly wrenched from his seat across the armrest, bloodying his face in the process, and dragged down the aisle by the arms merely for refusing to relinquish his paid seat after the airline chose him randomly to be bumped from the flight—after being checked in and allowed to board—so that airline workers could make a connecting flight.

  Those with ADHD, autism, hearing impairments, dementia or some other disability that can hinder communication in the slightest way are in even greater danger of having their actions misconstrued by police. Police shot a 73-year-old-man with dementia seven times after he allegedly failed to respond to orders to stop approaching and remove his hands from his jacket. The man was unarmed and had been holding a crucifix.

  Clearly, it no longer matters where you live.

  Big city or small town: it’s the same scenario being played out over and over again in which government agents, hyped up on their own authority and the power of their uniform, ride roughshod over the citizenry who—in the eyes of the government—are viewed as having no rights.

  Our freedoms—especially the Fourth Amendment—continue to be torn asunder by the prevailing view among government bureaucrats that they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.

  Forced cavity searches, forced colonoscopies, forced blood draws, forced breath-alcohol tests, forced DNA extractions, forced eye scans, forced inclusion in biometric databases—these are just a few ways in which Americans continue to be reminded that we have no control over what happens to our bodies during an encounter with government officials.

  For instance, during a “routine” traffic stop for allegedly “rolling” through a stop sign, Charnesia Corley was thrown to the ground, stripped of her clothes, and forced to spread her legs while Texas police officers subjected her to a roadside cavity probe, all because they claimed to have smelled marijuana in her car.

  Angel Dobbs and her 24-year-old niece, Ashley, were pulled over by a Texas state trooper for allegedly flicking cigarette butts out of the car window. Insisting that he smelled marijuana, the trooper proceeded to interrogate them and search the car. Despite the fact that both women denied smoking or possessing any marijuana, the police officer then called in a female trooper, who carried out a roadside cavity search, sticking her fingers into the older woman’s anus and vagina, then performing the same procedure on the younger woman, wearing the same pair of gloves. No marijuana was found.

  Leila Tarantino was subjected to two roadside strip searches in plain view of passing traffic during a routine traffic stop, while her two children—ages 1 and 4—waited inside her car. During the second strip search, presumably in an effort to ferret out drugs, a female officer “forcibly removed” a tampon from Tarantino. Nothing illegal was found.

  David Eckert was forced to undergo an anal cavity search, three enemas, and a colonoscopy after allegedly failing to yield to a stop sign at a Wal-Mart parking lot. Cops justified the searches on the grounds that they suspected Eckert was carrying drugs because his “posture [was] erect” and “he kept his legs together.” No drugs were found.

  Meanwhile, four Milwaukee police officers were charged with carrying out rectal searches of suspects on the street and in police district stations over the course of several years. One of the officers was accused of conducting searches of men’s anal and scrotal areas, often inserting his fingers into their rectums and leaving some of his victims with bleeding rectums.

  Incidents like these – sanctioned by the courts and conveniently overlooked by the legislatures – teach Americans of every age and skin color the painful lesson that there are no limits to what the government can do in its so-called “pursuit” of law and order.

  If this is a war, then “we the people” are the enemy.

  As Radley Balko notes in The Washington Post, “When you’re at war, it’s important to dehumanize your enemy. And there’s nothing more dehumanizing than forcibly and painfully invading someone’s body — all the better if you can involve the sex organs.”

  The message being beaten, shot, tasered, probed and slammed into our collective consciousness is simply this: it doesn’t matter if you’re in the right, it doesn’t matter if a cop is in the wrong, it doesn’t matter if you’re being treated with less than the respect you deserve or the law demands.

  The only thing that matters to the American police state is that you comply, submit, respect authority and generally obey without question whatever a government official (anyone who wears a government uniform, be it a police officer, social worker, petty bureaucrat or zoning official) tells you to do.

  This is what happens when you allow the government to call the shots: it becomes a bully.

  As history shows, this recipe for disaster works every time: take police officers hyped up on their own authority and the power of the badge, throw in a few court rulings suggesting that security takes precedence over individual rights, set it against a backdrop of endless wars and militarized law enforcement, and then add to the mix a populace distracted by entertainment, out of touch with the workings of their government, and more inclined to let a few sorry souls suffer injustice than to challenge the status quo.

  “It is not only under Nazi rule that police excesses are inimical to freedom,” warned former Supreme Court justice Felix Frankfurter in a 1946 ruling in Davis v. United States: “It is easy to make light of insistence on scrupulous regard for the safeguards of civil liberties when invoked on behalf of the unworthy. It is too easy. History bears testimony that by such disregard are the rights of liberty extinguished, heedlessly at first, then stealthily, and brazenly in the end.”

  In other words, if it could happen in Nazi Germany, it can just as easily happen here.

  It is happening here.

  Unfortunately, we’ve been marching in lockstep with the police state for so long that we’ve forgotten how to march to the tune of our own revolutionary drummer. In fact, we’ve even forgotten the words to the tune.

  We’ve learned the lessons of compliance too well.

  For too long, “we the people” have allowed the government to ride roughshod over the Constitution, equating patriotism with blind obedience to the government’s dictates, no matter how unconstitutional or immoral those actions might be.

  As historian Howard Zinn recognized:

  Our problem is civil obedience. Our problem is the numbers of people all over the world who have obeyed the dictates of the leaders of their government and have gone to war, and millions have been killed because of this obedience… Our problem is that people are obedient all over the world, in the face of poverty and starvation and stupidity, and war and cruelty. Our problem is that people are obedient while the jails are full of petty thieves, and all the while the grand thieves are running the country. That's our problem… people are obedient, all these herdlike people.

  What can you do?

  It’s simple but as I detail in my book Battlefield America: The War on the American People, the consequences may be deadly.

  Stop being so obedient. Stop being so compliant and herdlike. Stop kowtowing to anyone and everyone in uniform. Stop perpetuating the false notion that those who work for the government—the president, Congress, the courts, the military, the police—are in any way superior to the rest of the citizenry. Stop playing politics with your principles. Stop making excuses for the government’s growing list of human rights abuses and crimes. Stop turning a blind eye to the government’s corruption and wrongdoing and theft and murder. Stop tolerating ineptitude and incompetence by government workers. Stop allowing the government to treat you like a second-class citizen. Stop censoring what you say and do for fear that you might be labeled an extremist or worse, unpatriotic. Stop sitting silently on the sidelines while the police state kills, plunders and maims your fellow citizens.

  Stop being a slave.

  As anti-war activist Rosa Luxemburg concluded, “Those who do not move, do not notice their chains.”

  You may not realize it yet, but you are not free.

  If you believe otherwise, it is only because you have made no real attempt to exercise your freedoms.

  Had you attempted to exercise your freedoms before now by questioning a police officer’s authority, challenging an unjust tax or fine, protesting the government’s endless wars, defending your right to privacy against the intrusion of surveillance cameras, or any other effort that challenges the government’s power grabs and the generally lopsided status quo, you would have already learned the hard way that the police state has no appetite for freedom and it does not tolerate resistance.

  This is called authoritarianism, a.k.a. totalitarianism, a.k.a. oppression.

  As Glenn Greenwald notes for the Guardian:

  Oppression is designed to compel obedience and submission to authority. Those who voluntarily put themselves in that state – by believing that their institutions of authority are just and good and should be followed rather than subverted – render oppression redundant, unnecessary. Of course people who think and behave this way encounter no oppression. That's their reward for good, submissive behavior. They are left alone by institutions of power because they comport with the desired behavior of complacency and obedience without further compulsion. But the fact that good, obedient citizens do not themselves perceive oppression does not mean that oppression does not exist.

  Get ready to stand your ground or run for your life, because the American police state is coming to get you.

  

  

• MIT Scientist FURTHER Debunks False Flag: "The Nerve Agent Attack that Did Not Occur"

  By Theodore A. Postol, professor emeritus of science, technology, and national security policy at MIT.  Postol’s main expertise is in ballistic missiles. He has a substantial background in air dispersal, including how toxic plumes move in the air. Postol has taught courses on weapons of mass destruction – including chemical and biological threats – at MIT.  Before joining MIT, Postol worked as an analyst at the Office of Technology Assessment, as a science and policy adviser to the chief of naval operations, and as a researcher at Argonne National Laboratory.  He also helped build a program at Stanford University to train mid-career scientists to study weapons technology in relation to defense and arms control policy. Postol is a highly-decorated scientist, receiving the Leo Szilard Prize from the American Physical Society, the Hilliard Roderick Prize from the American Association for the Advancement of Science, and the Richard L. Garwin Award from the Federation of American Scientists.

  For background on Dr. Postol’s previous essays on this issue, see:

  • Exclusive: Top Missile and Chemical Weapons Expert Debunks Trump’s Claims About Syrian Chemical Weapons

  • Addendum to Dr. Theodore Postol’s Assessment of the White House Report on Syria Chemical Attack

  • Video Evidence of False Claims Made in the White House Intelligence Report of April 11, 2017

   

  THE NERVE AGENT ATTACK THAT DID NOT OCCUR:
  ANALYSIS OF THE TIMES AND LOCATIONS OF CRITICAL EVENTS IN THE ALLEGED NERVE AGENT ATTACK AT 7 AM ON APRIL 4, 2017 IN KHAN SHEIKHOUN, SYRIA

  Introduction

  This analysis contains a detailed description of the times and locations of critical events in the alleged nerve agent attack of April 4, 2017 in Khan Shaykhun, Syria – assuming that the White House Intelligence Report (WHR) issued on April 11, 2017 correctly identified the alleged sarin release site.

  Analysis using weather data from the time of the attack shows that a small hamlet about 300 m to the east southeast of the crater could be the only location affected by the alleged nerve agent release. The hamlet is separated from the alleged release site (a crater) by an open field. The winds at the time of the release would have initially taken the sarin across the open field. Beyond the hamlet there is a substantial amount of open space and the sarin cloud would have had to travel long additional distance for it to have dissipated before reaching any other population center.

  Video taken on April 4 shows that the location where the victims were supposedly being treated from sarin exposure is incompatible with the only open space in the hamlet that could have been used for mass treatment of victims. This indicates that the video scenes where mass casualties (dead and dying) were laid on the ground randomly was not at the hamlet. If the location where the bodies were on the ground was instead a site where the injured and dead were taken for processing, then it is hard to understand why bodies were left randomly strewn on the ground and in mud as shown in the videos.

  The conclusion of this summary of data is obvious – the nerve agent attack described in the WHR did not occur as claimed. There may well have been mass casualties from some kind of poisoning event, but that event was not the one described by the WHR.

  The findings of this analysis can serve two important purposes:

  1. It shows exactly what needs to be determined in an international investigation of this alleged atrocity. In particular, if an international investigation can determine where casualties from the nerve agent attack lived, it will further confirm that the findings reported by the WHR are not compatible with the data it cites as evidence for its conclusions.
  2. It also establishes that the WHR did not utilize simple and widely agreed upon intelligence analysis procedures to determine its conclusions.

  This raises troubling questions about how the US political and military leadership determined that the Syrian government was responsible for the alleged attack. It is particularly of concern that the WHR presented itself as a report with “high confidence” findings and that numerous high-level officials in the US government have confirmed their belief that the report was correct and to a standard of high confidence.

  Methodology Used in This Analysis

  The construction of the time of day at which particular video frames were generated is determined by simply using the planetary geometry of the sun angle during the day on April 4. The illustration below of the sun-angle geometry shows the Day/Night Sun Terminator at the location of Khan Sheikhoun on April 4. The angle of the sun relative to local horizontal is summarized in the table that follows the image of the planetary geometry along with the temperature during the day between 6:30 AM and 6 PM.

  The next set of two side-by-side images shows the shadows at a location where a large number of poison victims are being treated in what appears to be the aftermath of a poisoning event. The shadows indicate that this event occurred at about 7:30 AM. This is consistent with the possibility of a nerve agent attack at 7 AM on the morning of April 4 and it is also consistent with the allegation in the WHR that an attack occurred at 6:55 AM on that day.

  The timing sequence of the attack is important for determining the consistency of the timelines with the allegations of a sarin release at the crater identified in the WHR.

  Assuming there was an enough sarin released from the crater identified by the WHR to cause mass casualties at significant downwind distances, the sarin would have drifted downwind at a speed of 1 to 2 m/s and for several minutes before encountering the only location where mass casualties could have occurred from this particular release. The location where these mass casualties would have had to occur will be identified and described in the next section. If there was a sarin release elsewhere, mass casualties would have not occurred at this location but would have occurred somewhere else in the city.

  Assuming the victims of the attack were exposed to the plume, the symptoms of sarin poisoning would have express themselves almost immediately. As such, the scene at 7:30 AM on April 4 is absolutely consistent with the possibility of a mass poisoning downwind of the sarin-release crater.

  The next figure shows the earliest photograph we have been able to find of an individual standing by the sarin-release crater where the alleged release occurred. The photo was posted on April 4 and the shadow indicates the time of day was around 10:50 AM. Thus the individual was standing by the crater roughly 4 hours after the dispersal event.

  If the dispersal event was from this crater, the area where this unprotected individual is standing would be toxic and this individual would be subjected to the severe and possibly fatal effects of sarin poisoning. As a result, this throws substantial suspicion on the possibility that the crater identified by WHR would be the source of the sarin release.

  At the time of the sarin release, the temperature of the air was about 60°F and the sun was at an angle of only 8° relative to local horizontal. This means that liquid sarin left on the ground from the dispersal event would remain mostly unevaporated. By 11 AM, the temperature of the air had risen to 75° and the angle of the sun relative to horizontal was at 66°. Thus, one would expect that the combination of the rise in air temperature and the sun on the crater would lead to significant evaporation of liquid sarin left behind from the initial dispersal event. The air temperature and sun angle are such that the area around the crater should have been quite dangerous for anybody without protection to operate.

  This is therefore an important indication that the crater was probably not a dispersal site of the sarin.

  The final set of three photographs shows arriving victims seeking treatment at a hospital at some location in Khan Sheikhoun. The arrivals at the hospital are at between 9 and 10:30 AM on the day of the attack. This is perhaps late since victims were seriously exposed by 7:30 AM, but victims could have been trailing in after the initial arrival of severely affected victims. This time is considerably earlier than the time at which WHR alleges that a hospital was attacked while treating victims of the poisoning attack.

  In the next section we discuss the location where mass casualties should have occurred if the sarin release occurred at the location alleged by the WHR.

  

  Khan Shaykhun Sun Angles
  Relative to Local Horizontal on April 4, 2017

  Local Time of Day in Khan ShayKhun on April 4, 2017	Surface Temperature in Degrees Fahrenheit	Sun Angle in Degrees Relative to Local Horizontal
  6:30	58.16	1.20
  7.00	60.24	8.40
  7:30	62.39	15.60
  8.00	64.55	22.80
  8:30	66.68	30.00
  9.00	68.74	37.20
  9:30	70.69	44.40
  10.00	72.51	51.60
  10:30	74.15	58.80
  11.00	75.59	66.00
  11:30	76.81	73.20
  12.00	77.80	80.40
  12:30	78.53	87.60
  13.00	79.01	94.80
  13:30	79.24	102.00
  14.00	79.22	109.20
  14:30	78.96	116.40
  15.00	78.48	123.60
  15:30	77.81	130.80
  16.00	76.99	138.00
  16:30	76.04	145.20
  17.00	75.03	152.40
  17:30	74.01	159.60
  18.00	73.05	166.80

  

  

  Identification of the Location of the Mass Casualties

  The figure on the next page shows the direction of the toxic sarin plume based on the assumption that the alleged release point was the crater identified by WHR. The wind conditions at the time of the release, which would have been at about 7 AM on April 4, would have carried the plume across an empty field to an isolated Hamlet roughly 300 m downwind from the crater.

  Although there were some walls and structures that would have somewhat attenuated and inhibited the movement of the aerosol cloud from the release point, the open field would be an ideal stable wind environment to transmit the remaining sarin cloud with minimal distortion and dispersal. As such, it is plausible that the sarin cloud could with the weather conditions at that time have led to mass casualties at the Hamlet.

  The sarin dosage level that results in 50% of exposed victims dying is known as the LD50. The LD50 for sarin is about 100 mg^lmin/m³.

  The dose quantity mg^lmin/m³ can be understood simply.

  An exposure of about 100 mg^lmin/m³ simply means that a victim is within an environment for one full minute when there is 100 mg/m³ of sarin in the air. If the victim is instead in an environment for 10 minutes where there is a density of sarin of 10 mg/m³, they will also receive a lethal dose of 100 mg^lmin/m³.

  Assuming 5 to 10 liters were aerosolized at the crater as alleged by the WHR, this would have resulted in an average sarin exposure at the Hamlet at 300 m range of about 10 to 20 mg^lmin/m³, assuming wind and temperature conditions that are near ideal for lethal exposures downwind. This estimate assumes that an individual would be outside and exposed to the sarin as the gas cloud passes by.

  

  Since a cloud of sarin would not be uniformly mixed, there will be regions in the cloud that have much higher and lower doses than the average. In addition, as the cloud passes, sarin entering into open windows of aboveground and basement rooms would tend to become trapped inside these rooms creating a significantly longer exposure to the nerve agent, certainly leading to lethal levels if residents did not evacuate the rooms immediately. Also, since the nerve agent cloud would be passing through an area that has buildings, it will tend to flow around, over buildings, and down into open basement windows, resulting in buildups of sarin in some locations and diminished levels of sarin at other locations.

  As such, the Hamlet could well have been within lethal range of the sarin exposure. However, areas further downwind from the Hamlet would be sufficiently far away that the sarin will have dispersed sufficiently that it would not be capable of causing deaths.

  Thus, the Hamlet area 300 m downwind of the crater is the only area where mass casualties could  occur if there had been a sarin release at the crater as alleged by the WHR!

  The selected video frames collected on the next two pages show three important sets of data that indicate the following:

  1. Unprotected civilians with clothing that have logos of the Idlib Health Directorate are tampering with the contents of the crater crater that the WHR alleges was the source of the sarin release. All of the indicators point to a ruptured tube that could have contained no more than 8 to 10 liters of sarin. This is the only container shown in any videos from this scene.
  2. The next collection of video frames shows panoramic views of the target area taken from a drone equipped with a video camera. As can be seen in the video frames, a goat that was allegedly killed from the sarin dispersal is close to downwind of the alleged dispersal site.

  However, the Hamlet that should have experienced major casualties if the alleged dispersal site had been correctly identified is only 300 m down range, and easily reachable by simply walking over to the site.

  Yet none of the video journalists refer in any way to a mass casualty site nearby. They simply focus on a dead goat and present out of context images of a few dead birds. It is remarkable that no video journalists of the many who reported from this crater area referred in any way to the mass casualties that could only have occurred 300 m away if the attack had been executed from this crater.

  3. The last collection of 18 video frames is from the area where mass casualties were piled on the ground haphazardly dead or dying. Among these casualties were infants as well as men and women. This scene clearly could not have been at the location of the Hamlet as one can see that the walls surrounding the area are carved out of rock. Thus, this scene could not possibly have been at the Hamlet.

  These video frames were generated by reviewing hundreds of videos posted on YouTube plus additional videos and video frames found on Twitter.

  Among the hundreds of videos reviewed there seems to be no more than 50 to 60 seconds of actual original scenes like those laid out in the collection of 18 videos below. The vast majority of time in the videos contains the same repeated sequences of the same dead and injured infants and adults that could all be collected into less than a couple of minutes of independent scenes.

  The overwhelming evidence is that these videos repeat nothing more than redundant scenes that suggest one terrible event might have occurred. Almost none of the scenes contain any different information from the others. This raises a serious question about how much real data has been supplied that would indicate an actual significant nerve agent attack.

  What is absolutely clear from the videos is that the location of the sarin dispersal site alleged by WHR and the mass casualty site that would have had to be generated if the sarin dispersal actually occurred, are not in any way related to the scenes of victims shown in the other videos. The conclusion is obvious, the alleged attack described in WHR never occurred.

           

  Final Comments

  This abbreviated summary of the facts has been constructed entirely from basic physics, video evidence, and absolutely solid analytical methods. It demonstrates without doubt that the sarin dispersal site alleged as the source of the April 4, 2017 sarin attack in Khan Sheikhoun was not a nerve agent attack site.

  It also shows beyond a shadow of a doubt that the only mass casualty site that could have resulted from this mass attack is not in any way related to the sites that are shown in video following a poisoning event of some kind at Khan Sheikhoun.

  This means that the allegedly “high confidence” White House intelligence assessment ssued on April 11 that led to the conclusion that the Syrian government was responsible for the attack is not correct. For such a report to be so egregiously in error, it could not possibly have followed the most simple and proven intelligence methodologies to determine the veracity of its findings.

  Since the United States justified attacking a Syrian airfield on April 7, four days before the flawed National Security Council intelligence report was released to the Congress and the public, the conclusion that follows is that the United States took military actions without the intelligence to support its decision.

  Furthermore, it is clear that the WHR was not an intelligence report.

  No competent intelligence professional would have made so many false claims that are totally inconsistent with the evidence. No competent intelligence professional would have accepted the findings in the WHR analysis after reviewing the data presented herein. No competent intelligence professionals would have evaluated the crater that was tampered with in terms described in the WHR.

  Although it is impossible to know from a technical assessment to determine the reasons for such an egregiously amateurish report, it cannot be ruled out that the WHR was fabricated to conceal critical information from the Congress and the public.

  Appendix

  Resource Materials Used To DetermineLocalWeather Conditions andSun Angles
  Needed to Verify the above Analysis

  Khan Shaykhun, Idlib Historical Weather, Syria

  The past date should be after 1st July, 2008 onwards
  Tue 04th Apr, 2017

  Time Weather Temp Feels Like Rain Wind Gust Rain? Cloud Humidity Pressure
  	00:00	03:00	06:00	09:00	12:00	15:00	18:00	21:00
  	10 °c	10 °c	13 °c	21 °c	25 °c	26 °c	23 °c	20 °c
  	10 °c	10 °c	13 °c	21 °c	24 °c	24 °c	24 °c	20 °c
  	0.0 mm        0.0 mm       0.0 mm      0.0 mm       0.0 mm      0.0 mm       0.0 mm      0.0 mm
  	4 mph SSW	3 mph S	2 mph SE	4 mph E	7 mph ENE	10 mph ENE	11 mph ENE	10 mph ENE
  	8 mph	6 mph	4 mph	4 mph	8 mph	12 mph	17 mph	20 mph
  	0%                  0%            0%             0%           0% 7%                  2%            1%             1%           6% 94%                91%          76%            40%         19%					0%            0%             0%
  						20%	25%	21%
  						17%           25%          33%
  	1022 mb	1022 mb	1023 mb	1023 mb	1022 mb	1021 mb	1021 mb	1021 mb

   

  Khan Shaykhun Past weather on 04th April

  2mph = 0.9 m/sec
  3mph = 1.3 m/sec
  4mph = 1.8 m/sec

  3 to 4 Minutes from Crater to Residences

  https://www.timeanddate.com/sun/syria/damascus
  April 2017 — Sun in Damascus

  Month:

  2017 Apr

  Sunrise/Sunset Sunrise                             Sunset

  Length

  Daylength Difference

  Astronomical Twilight Start                          End

  Nautical Twilight Start                  End

  Civil Twilight Start                     End

  Solar Noon Time                              Mil. mi

  1

  6:22 am t (84°)

  6:55 pm t (276°)

  12:32:44

  +2:03

  4:58 am

  8:19 pm

  5:28 am

  7:49 pm

  5:57 am

  7:20 pm

  12:38 pm (61.2°)

  92.896

  2

  6:21 am t (83°)

  6:55 pm t (277°)

  12:34:48

  +2:03

  4:56 am

  8:20 pm

  5:26 am

  7:50 pm

  5:56 am

  7:21 pm

  12:38 pm (61.6°)

  92.922

  3

  6:19 am t (83°)

  6:56 pm t (277°)

  12:36:51

  +2:03

  4:55 am

  8:21 pm

  5:25 am

  7:51 pm

  5:54 am

  7:21 pm

  12:37 pm (61.9°)

  92.948

  4

  6:18 am t (83°)

  6:57 pm t (278°)

  12:38:54

  +2:03

  4:53 am

  8:22 pm

  5:23 am

  7:52 pm

  5:53 am

  7:22 pm

  12:37 pm (62.3°)

  92.974

  5

  6:17 am t (82°)

  6:58 pm t (278°)

  12:40:58

  +2:03

  4:52 am

  8:23 pm

  5:22 am

  7:53 pm

  5:52 am

  7:23 pm

  12:37 pm (62.7°)

  93.000

  6

  6:15 am t (82°)

  6:58 pm t (279°)

  12:43:00

  +2:02

  4:50 am

  8:24 pm

  5:21 am

  7:53 pm

  5:50 am

  7:24 pm

  12:37 pm (63.1°)

  93.026

  7

  6:14 am t (81°)

  6:59 pm t (279°)

  12:45:02

  +2:02

  4:49 am

  8:25 pm

  5:19 am

  7:54 pm

  5:49 am

  7:24 pm

  12:36 pm (63.5°)

  93.052

  8

  6:13 am t (81°)

  7:00 pm t (279°)

  12:47:04

  +2:01

  4:47 am

  8:26 pm

  5:18 am

  7:55 pm

  5:48 am

  7:25 pm

  12:36 pm (63.8°)

  93.079

  9

  6:12 am t (80°)

  7:01 pm t (280°)

  12:49:05

  +2:01

  4:46 am

  8:27 pm

  5:16 am

  7:56 pm

  5:46 am

  7:26 pm

  12:36 pm (64.2°)

  93.105

  10

  6:10 am t (80°)

  7:01 pm t (280°)

  12:51:07

  +2:01

  4:44 am

  8:28 pm

  5:15 am

  7:57 pm

  5:45 am

  7:27 pm

  12:36 pm (64.6°)

  93.131

  11

  6:09 am t (79°)

  7:02 pm t (281°)

  12:53:07

  +2:00

  4:43 am

  8:29 pm

  5:14 am

  7:58 pm

  5:44 am

  7:28 pm

  12:35 pm (64.9°)

  93.158

  12

  6:08 am t (79°)

  7:03 pm t (281°)

  12:55:07

  +2:00

  4:41 am

  8:29 pm

  5:12 am

  7:58 pm

  5:42 am

  7:28 pm

  12:35 pm (65.3°)

  93.184

  13

  6:06 am t (79°)

  7:04 pm t (282°)

  12:57:07

  +1:59

  4:40 am

  8:30 pm

  5:11 am

  7:59 pm

  5:41 am

  7:29 pm

  12:35 pm (65.7°)

  93.210

  14

  6:05 am t (78°)

  7:04 pm t (282°)

  12:59:06

  +1:59

  4:38 am

  8:31 pm

  5:10 am

  8:00 pm

  5:40 am

  7:30 pm

  12:34 pm (66.0°)

  93.237

  15

  6:04 am t (78°)

  7:05 pm t (283°)

  13:01:05

  +1:58

  4:37 am

  8:32 pm

  5:08 am

  8:01 pm

  5:38 am

  7:31 pm

  12:34 pm (66.4°)

  93.263

  16

  6:03 am t (77°)

  7:06 pm t (283°)

  13:03:03

  +1:58

  4:35 am

  8:33 pm

  5:07 am

  8:02 pm

  5:37 am

  7:31 pm

  12:34 pm (66.7°)

  93.290

  17

  6:02 am t (77°)

  7:07 pm t (283°)

  13:05:01

  +1:57

  4:34 am

  8:34 pm

  5:05 am

  8:03 pm

  5:36 am

  7:32 pm

  12:34 pm (67.1°)

  93.316

  18

  6:00 am t (76°)

  7:07 pm t (284°)

  13:06:58

  +1:56

  4:33 am

  8:35 pm

  5:04 am

  8:04 pm

  5:35 am

  7:33 pm

  12:34 pm (67.4°)

  93.343

  19

  5:59 am t (76°)

  7:08 pm t (284°)

  13:08:54

  +1:56

  4:31 am

  8:36 pm

  5:03 am

  8:05 pm

  5:33 am

  7:34 pm

  12:33 pm (67.8°)

  93.369

  20

  5:58 am t (76°)

  7:09 pm t (285°)

  13:10:50

  +1:55

  4:30 am

  8:37 pm

  5:01 am

  8:05 pm

  5:32 am

  7:35 pm

  12:33 pm (68.1°)

  93.395

  21

  5:57 am t (75°)

  7:10 pm t (285°)

  13:12:44

  +1:54

  4:28 am

  8:38 pm

  5:00 am

  8:06 pm

  5:31 am

  7:36 pm

  12:33 pm (68.5°)

  93.421

  22

  5:56 am t (75°)

  7:10 pm t (286°)

  13:14:39

  +1:54

  4:27 am

  8:39 pm

  4:59 am

  8:07 pm

  5:30 am

  7:36 pm

  12:33 pm (68.8°)

  93.447

  23

  5:55 am t (74°)

  7:11 pm t (286°)

  13:16:32

  +1:53

  4:25 am

  8:41 pm

  4:58 am

  8:08 pm

  5:29 am

  7:37 pm

  12:33 pm (69.1°)

  93.472

  24

  5:53 am t (74°)

  7:12 pm t (286°)

  13:18:25

  +1:52

  4:24 am

  8:42 pm

  4:56 am

  8:09 pm

  5:27 am

  7:38 pm

  12:32 pm (69.5°)

  93.498

  25

  5:52 am t (74°)

  7:13 pm t (287°)

  13:20:17

  +1:52

  4:23 am

  8:43 pm

  4:55 am

  8:10 pm

  5:26 am

  7:39 pm

  12:32 pm (69.8°)

  93.523

  26

  5:51 am t (73°)

  7:13 pm t (287°)

  13:22:08

  +1:51

  4:21 am

  8:44 pm

  4:54 am

  8:11 pm

  5:25 am

  7:40 pm

  12:32 pm (70.1°)

  93.547

  27

  5:50 am t (73°)

  7:14 pm t (287°)

  13:23:58

  +1:50

  4:20 am

  8:45 pm

  4:53 am

  8:12 pm

  5:24 am

  7:40 pm

  12:32 pm (70.4°)

  93.572

  28

  5:49 am t (72°)

  7:15 pm t (288°)

  13:25:48

  +1:49

  4:19 am

  8:46 pm

  4:51 am

  8:13 pm

  5:23 am

  7:41 pm

  12:32 pm (70.8°)

  93.596

  29

  5:48 am t (72°)

  7:16 pm t (288°)

  13:27:36

  +1:48

  4:17 am

  8:47 pm

  4:50 am

  8:14 pm

  5:22 am

  7:42 pm

  12:32 pm (71.1°)

  93.619

  30

  5:47 am t (72°)

  7:16 pm t (289°)

  13:29:23

  +1:47

  4:16 am

  8:48 pm

  4:49 am

  8:15 pm

  5:21 am

  7:43 pm

  12:31 pm (71.4°)

  93.643

  * All times are local time for Damascus. Time is adjusted for DST when applicable. Dates are based on the Gregorian calendar. Today is highlighted.

  Time Determined by Planetary Analysis

  Sunrise ~ 6:25 AM

  Sunset ~ 6:56 PM

  Postscript: Here is the .pdf version, with the best layout:

  The Nerve Agent Attack that Did Not Occur__Analysis of the Alleged Nerve Agent Attack at 7 AM on April 4_2017 in Khan Sheikhoun_Syrian_(April18,2017)_Optimized_

  In a cover letter to his report, Dr. Postol also sent us the following Summary of Findings:

  This analysis contains a detailed description of the times and locations of critical events in the alleged nerve agent attack of April 4, 2017 in Khan Shaykhun, Syria – assuming that the White House Intelligence Report (WHR) issued on April 11, 2017 correctly identified the alleged sarin release site.

   

  Analysis using weather data from the time of the attack shows that a small hamlet about 300 m to the east southeast of the crater could be the only location affected by the alleged nerve agent release.  Video data of suffocating and dead victims lying on the ground shows a different location from the predicted sarin dispersal site if it had been correctly identified by the White House.

   

  The conclusion is that the nerve agent attack described in the White House Intelligence Report did not occur as claimed. 

   

  There may well have been mass casualties from some kind of poisoning event, but that event was not the one described by the WHR.

   

  The findings of this expanded analysis can serve two important purposes:

  1. It shows exactly what needs to be determined in an international investigation of this alleged atrocity.

  In particular, if an international investigation can determine where casualties from the nerve agent attack lived, it will confirm that the findings reported by the White House Report are incompatible with its own cited data.

  2. It also establishes that the White House Report did not utilize simple and widely agreed upon intelligence analysis procedures to determine its conclusions.

   

  This raises troubling questions about how the US political and military leadership determined that the Syrian government was responsible for the alleged attack.  It is particularly of concern that the White House Report presented itself as a report with “high confidence” findings and that numerous high-level officials in the US government have confirmed their belief that the report was correct and executed to a standard of high confidence.

  

• Tucker Carlson Takes on Mark Cuban Over H1B Visa Laws

  The minimum wage for H1B visa recipients is $60,000, unchanged from 1989. Let me emphasize that for you. Our government is permitting companies to bring in foreign skilled labor at 1989 wages, completely undercutting the American workforce and driving down wages.

  Today President Trump signed an executive order to reform the program.

  “Right now, H-1B visas are awarded in a totally random lottery — and that’s wrong,” said Trump.

  Annually, there is a quota of 85,000 new visas, with 20,000 reserved for master’s degree holders. To give you an idea how voracious an appetite American tech firms have for foreign labor, this was the fifth year in a row the cap had been met within 5 days.

  The order was seen as a ceremonial media event, having little to no bearing on actual law. In order to effect real change, congress will need to change the law.

  Tucker Carlson took on Mark Cuban to discuss the law — who is supportive of the H1b visas because MUH American exceptionalism and MUH capitalism. While against ‘hoarding’ visas, Cuban is supportive of the program because it allows American companies to hire skilled labor.

  Tucker retorted, ‘that’s the talking point, and it makes sense […], but the reality, as you know, is 80% of foreigners admitted under H1b make less than the median income in which the work.  In other words, they’re being brought over, not because of their skills, but because they save labor costs. That’s a subversion of the idea.’

  Cuban’s reply was to blame the visa hoarders on causing the problem, saying ‘that’s wrong, that’s not at the core of the H1b visa.’

  Then Cuban twisted himself into a pretzel, saying ‘But when it comes to competing for the best talent around the world, I’m a big believer in American exceptionalism. I believe we can compete. When we can’t get the job, we get smarter. Work harder, get smarter, you’ll get it the next time around. I think that’s good for everybody.’

  WTF? What sort of bullshit was Mark chewing on before spewing out this nonsense? But what about the wage gap, Mark?

  Tucker weighed in, ‘except in a lot of those cases, we don’t get smarter, we get unemployed.’ Tucker went on to explain that over 40% of college graduates describe themselves as underemployed. He added, ‘so we have a massive labor pool that’s educated in our system (Cuban nodding), and yet they’re being turned away in favor of people who are being educated abroad. That does not help America in any way.’

  (awkward silence, death blow delivered)

  The government has an obligation to protect American jobs. By plainly stating that the religion of capitalism can do no wrong and that ‘market forces’ will lead the path towards utopia is rhetoric. By creating loopholes that lower wages, literally taking away jobs from skilled American labor, is the very definition of abdication of duty, in some cases treasonous.

  The biggest H1B visa sponsors are:

  Infosys
  Cap Gemini
  Tata Consulting
  IBM
  Wipro
  Accenture
  Tech Mahindra
  Deloitte
  Cognizant
  Microsoft
  HCL America
  Google
  Ernst and Young
  UST Global
  Larsen and Toubro
  Amazon

  It’s worth noting, many of those companies are consultants, who then used the skilled labor to work on projects on behalf of their fortune 500 clients. In others words, they’re merely gatekeepers, obfuscating the true nature of how pervasive this program is in the American workforce.

  Content originally published at iBankCoin.com

  

• They Have No Proof: MIT Professor Explains Why The Assad Gas Attack Was A Sham

  Authored by Daniel Lang via SHTFplan.com,

  The mainstream narrative surrounding the sarin gas attack in Syria simply doesn’t add up. Even if you assume that Assad is nothing but a vile monster who would have no problem with gassing his own people, the attack still doesn’t make sense. That’s because even monsters have a sense of self-preservation.

  Just days before the attack, Secretary of State Rex Tillerson announced a reversal of a longstanding policy in Washington. He said that the US was no longer absolutely determined to oust Assad. America’s six year war against his regime was basically over. So why would Assad reignite a conflict with the world’s preeminent superpower with a chemical weapons attack? A conflict that I might add, would greatly reduce the chances of him remaining in power?

  Assad is by no means a good guy. He’s not even an okay guy. He is definitely a despot who relies on violence to suppress the population. But he’s never shown any signs of being suicidal. Six years of fighting to maintain his rule proves that. What’s much more likely is that Assad is being set up.

  Don’t believe our government’s claims about satellite photography catching Assad’s aircraft dropping the sarin. In fact, the little evidence that has been provided falls on its face once you take a closer look. That’s the determination of Theodore Postol, a physicist and professor at MIT, who reviewed documents released by the White House regarding the gas attack.

  Postol said: “I have reviewed the [White House’s] document carefully, and I believe it can be shown, without doubt, that the document does not provide any evidence whatsoever that the US government has concrete knowledge that the government of Syria was the source of the chemical attack in Khan Sheikhoun, Syria at roughly 6am to 7am on 4 April, 2017.

   

  “In fact, a main piece of evidence that is cited in the document point to an attack that was executed by individuals on the ground, not from an aircraft, on the morning of 4 April.

  That evidence is a photograph of the shell that delivered the sarin gas, which according Postol, shows signs of having explosives set on top of it before being detonated on the ground.

  

  That sounds a lot more like the work of the rebels, not the Syrian government.

  “The explosive acted on the pipe as a blunt crushing mallet,” Postol said. “It drove the pipe into the ground while at the same time creating the crater.

   

  “Since the pipe was filled with sarin, which is an incompressible fluid, as the pipe was flattened, the sarin acted on the walls and ends of the pipe causing a crack along the length of the pipe and also the failure of the cap on the back end.”

  Keep in mind that Postol is an expert in this field. He’s been advising our government on weapon technologies since the Gulf War. He’s not some armchair scientist. More importantly, after working with our government for so many years, he’s all too familiar with how unreliable intelligence reports from the White House can be.

  “All of these highly amateurish mistakes indicate that this White House report, like the earlier Obama White House Report [from Ghouta in 2013], was not properly vetted by the intelligence community as claimed.

   

  “I have worked with the intelligence community in the past, and I have grave concerns about the politicisation of intelligence that seems to be occurring with more frequency in recent times – but I know that the intelligence community has highly capable analysts in it.

   

  “And if those analysts were properly consulted about the claims in the White House document they would have not approved the document going forward.”

  Once again, our country has made an attack against a sovereign nation without any justification.

  

  As Liberty Blitzkrieg's Mike Krieger so eloquently concludes:

  Pretty much every official statement emanating from the U.S. government these days is a deception, fabrication, or outright lie. I understand that this is a hard thing for a U.S. citizen to admit, but as James Baldwin so accurately stated: “Not everything that is faced can be changed, but nothing can be changed until it is faced.”

  So let’s go ahead and face the facts. Governments lie. Governments have always lied. Extremely corrupt, imperial governments overseeing societies in deep economic and cultural decline lie even more. This isn’t conspiracy theory, it’s what obviously happens when you combine tremendous power with human nature.

   

  …

   

  The U.S. government is completely rogue and determined to drive the U.S. into an unwinable war based on false pretenses, which doesn’t serve the national interest. These lunatics must be stopped.

  

  

• Harvard 'Shock' Study: Each $1 Minimum Wage Hike Causes 4-10% Increase In Restaurant Failures

  A ‘shocking’ discovery was made when a pair of researchers at Harvard Business School decided to analyze the impact of higher minimum wages in San Francisco on restaurant failures…hint:  they went up. 

  Entitled “Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit“, this latest study on the devastating consequences of minimum wage was conducted by Dara Lee Luca and Michael Luca and concluded that each $1 increase in the minimum wage results in a roughly 4-10% increase in the likelihood of a restaurant going out of business. 

  In this paper, we investigate the impact of the minimum wage on restaurant closures using data from the San Francisco Bay Area. We find suggestive evidence that an increase in the minimum wage leads to an overall increase in the rate of exit.

   

  This paper presents several new findings. First, we provide suggestive evidence that higher minimum wage increases overall exit rates among restaurants, where a $1 increase in the minimum wage leads to approximately a 4 to 10 percent increase in the likelihood of exit, although statistical significance falls with the inclusion of time-varying county-level characteristics and city-specific time trends. This is qualitatively consistent but smaller than what Aaronson et al. (forthcoming) find; they show that a 10 percent raise in the minimum wage increases firm exit by approximately 24 percent from a base of 5.7 percent. Differences in sample and specifications may account for the differences between our study and theirs.

  

   

  Moreover, as we’ve pointed out the past, it’s the low-income workers, the ones that minimum wage hikes are intended to help, that end up getting hurt the most when misinformed liberal politicians decide to meddle in labor markets.  But, as this new HBS study points out, low-income workers don’t just lose their jobs when minimum wages are hiked…they also lose access to cheap casual dining options as lower-rated, cheaper restaurants are much more likely to fail when their costs are artificially raised.

  Next, we examine heterogeneous impacts of the minimum wage on restaurant exit by restaurant quality. The textbook competitive labor market model assumes identical workers and firms who therefore are equally likely to share in the minimum-wage generated employment and profit losses. However, models that depart from the standard competitive model to allow for heterogeneous workers and firms suggest that a minimum wage increase would cause the lowest productivity firms to exit the market (Albrecht & Axell, 1984; Eckstein & Wolpin, 1990; Flinn, 2006). We show that there is, in fact, considerable and predictable heterogeneity in the effects of the minimum wage, and that the impact on exit is concentrated among lower quality restaurants, which are already closer to the margin of exit. This suggests that the ability of firms to adjust to minimum wage changes could differ depending on firm quality. Finally, we provide evidence that higher minimum wages deter entry, and hastens the time to exit among poorly rated restaurants.

  

   

  And while we enjoy the affirmation of a conclusion that we’ve presented multiple times from such a reputable organization as Harvard, one which pretty much anyone could deduce with the application of just a moderate amount of common sense, for some reason the following scene from “Good Will Hunting’ comes to mind.

  “You dropped $150,000 on a fucking education you could’ve got for a $1.50 of late charges at the public library.”

   

  The full study can be read here:

  

  

• Japan's 10Y Yield Drops Below Zero Again: All Eyes On The BOJ

  With every other asset class roundtripping the November election outcome, it was only a matter of time before Japan’s 10Y JGB – which on February 2 briefly peaked above the BOJ’s “yield curve controlling” 0.10% yield ceiling, rising as high as 0.15% to the shock of a market ready to declare that Japan had finally lost control of its bond market – retraced the entire “reflationary” move from 0.0% to 0.1%. And, sure enough, following today’s violent deflationary capitulation moments ago Japan’s JGB 0.1% of 2027 once again dipped back under 0%, sliding as low as -0.003% on Wednesday morning in Japan.

  

  What happens next?

  According to traders, focus will turn to whether the BOJ, in pursuing “yield curve control”, will reduce the amount of JGBs it monetizes.  “Amid favorable environment for bonds, focus is on BOJ as whether there will be a reduction in purchase amounts will test the bank’s tolerance for 10-year yield falling into negative,” Katsutoshi Inadome, senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, wrote in note according to Bloomberg.

  As a reminder, in the BOJ’s latest “rinban” or open market operation, it bought around 280bn yen of 1-to-3, 350bn yen of 3-to-5 and 450bn yen of 5- to-10-year maturities at previous operation. And material declines from these amounts may lead result in the market roiling again, on fears the BOJ is being forced into an involuntary taper by external deflationary forces.

  Meanwhile, the USDJPY continues to track treasury yields tick for tick, and as Yujiro Goto, senior FX strategist at Nomura in London said, the “dollar/yen remains top-heavy with yields falling and weak U.S. economic data. It’s hard to take risk aggressively ahead of the French election, keeping it in 108-109 range.”

  Which means that while continued declines in Japanese yields are virtually assured all else equal, it will be up to the BOJ to telegraph to the market just how low it will let the 10Y drop. Should Kuroda unveil another “taper”, the result may be the uncoordinated move in global bond markets, leading to a negative feedback loop of JGB selling and TSY bond buying, which incidentally is the worst case scenario for global central bankers whose primary intention over the past year has been to achieve as much rate coordination as possible.

  

  

• Busting The "Free College" Myth

  Authored by Jonathan Newman via The Mises Institute,

  A new program just passed by New York’s state government promises “free tuition” for middle-class students to attend a public college or university in the state. While there are similar programs elsewhere in the US, this is the first to include four-year schools.

  All of the headlines include some variation of the term free college, which makes this a great opportunity to discuss what actually happens when a government provides something for “free.” Let us consider this program from three different perspectives.

  From the student’s perspective, this is another scholarship program. Indeed, it is called the “Excelsior Scholarship,” and students may apply for it to cover any tuition not already covered by other forms of financial aid. It does not cover other fees, room and board, or books, so any headline advertising “free college” is misleading. One estimate based on the cost of attending a State University of New York campus says that the new program would pay about $26,000, leaving $60,000 for the students and their families to pay.

  Nevertheless, before any further increases in non-tuition prices, this may encourage more students to apply and attend. SUNY has seen enrollment increases every year at least since 2002, which is the earliest data at data.ny.gov. The question, however, is whether using government policy to funnel even more students into four years of public education is a good idea. Nationwide, enrollment has recently dropped, but this has mainly been in for-profit and community colleges. Public schools have seen steady increases in enrollment, tuition, and borrowing.

  From the university’s perspective, the Excelsior program is a large third-party payer. In a 2016 NBER paper, Grey Gordon and Aaron Hedlund found strong evidence for the Bennett hypothesis: increases in financial aid lead to increases in college tuitions. The authors’ quantitative model showed that increases in financial aid accounted for 102% of the 106% total increase in tuition.

  

  In 1987, then Secretary of Education William Bennett made this prophetic observation: “increases in financial aid in recent years have enabled colleges and universities blithely to raise their tuitions, confident that Federal loan subsidies would help cushion the increase.”

  This became known as the Bennett hypothesis. Considering the rise in tuition since then, even relative to CPI, he may have been onto something (data from CollegeBoard.org and BLS.gov).

  From the taxpayer’s perspective, this is what Bastiat called “legal plunder.” Governments have nothing they did not first extract from their citizens. Bastiat argued against any law that “performs, for the profit of one citizen, and, to the injury of others.”

  The Excelsior Scholarship funds were not donated voluntarily by generous alumni or an organization whose members value higher education. The funds were taken from hard-working New Yorkers. Families had to forgo more or better education. Businesses had to employ fewer people. Grocery store carts had to be less full at the checkout. Tourists stayed for the weekend instead of a week, or chose not to travel to New York at all.

  Is it worth it? In one sense, we can’t know. It’s impossible (and therefore arrogant) to say that one person is better off with some amount of money compared to another person. Also, government programs are not subject to any sort of profit and loss test. Even when a program is a clear failure, more funds and resources are usually allocated to it.

  In another sense, we can say absolutely that New Yorkers will be worse off. The way we know that resources are used in the best possible way is that an individual has to voluntarily dedicate those resources to his or her most important goals. When funds are taken from individuals and used in a way those individuals would not have used them, then we can say for sure that those people are worse off. There are only two possibilities for the goal that is pursued with the stolen funds: (1) it is less important to the taxed individuals than what they would have done with the money, or (2) it is something the taxed individuals would not want at all.

  Said another way, if and to the extent that New Yorkers wanted to help students by paying for their tuition, they would have done so on their own.

   

  

  

• Bernie: "'I'm With Her' Slogan Is So Phony!…I'm Not Saying That"

  In a new book about the failed Clinton campaign entitled “Shattered: Inside Hillary Clinton’s Doomed Campaign,” Amie Parnes and Jonathan Allen reveal a story that confirms what most of us already knew about that whole Bernie endorsement of Hillary, namely that it was a complete and utter farce. 

  As the story goes, members of the Clinton campaign reached out to Sanders aides in late September 2016 to share a script of an ad they wanted the Vermont senator to record on Hillary’s behalf.  Unfortunately, Bernie wasn’t feeling Hillary’s “I’m With Her” slogan and refused to recite it for the ad, saying:

  “It’s so phony!” Sanders said. “I don’t want to say that.”

  

   

  As The Hill notes, The Clinton campaign eventually decided not to use the ad on television, after learning that voters found it completely obvious that Bernie didn’t actually support Hillary’s nomination.

  “People felt that it was him delivering his message, not Hillary’s,” said one Clinton aide familiar with focus group responses.

   

  “People didn’t feel that it was an authentic pitch for her and what she wanted to do. It even had some backlash in folks saying that he’s not really supporting her.”

  Perhaps being sabotaged by his own party so that Hillary could claim her birthright left a mark after all.

  

  

Digest powered by RSS Digest

• Asia's Richest Man Is "Aggressively Adding Direct Exposure To Gold"

  Authored by Mac Slavo via SHTFplan.com,

  The world is awash in crisis with wars looming, economies crashing and revolutions brewing. Doomsday bunkers sales are soaring and individuals from coast to coast are getting ready for whatever tomorrow may bring. Moreover, even governments like China and Russia are preparing, having gone so far as to create their own exchange mechanism to trade directly with gold in the event of a global currency crisis or financial meltdown.

  But it’s not just governments who have taken notice of the problems facing the globe. According to Gold Mining Chairman Amir Adnani and Sprott U.S. Holdings CEO Rick Rule, some of the biggest billionaire investors on the planet are actively seeking out precious metals like gold as wealth protection insurance amid the uncertainty of the current geo-political climate.

  In a recent interview with SGT Report, Adnani explains that several super wealthy individuals with whom he works very closely, including mainland China’s biggest billionaire investor and the richest man in all of Asia Li Ka-shing, have a renewed and urgent interest in diversifying their assets into both, gold mining firms and the physical asset itself:

  This individual’s net worth is about $35 billion… For the first time in a number of years of working with his team when it comes to investments in commodities that they believe were important to the strategic growth of China… for the first time they are looking for gold related investments.

   

  The comment from the person heading this initiative for Li Ka-shing is very interesting… His right had man said to me ‘He’s not just looking for investing in gold mines… he literally wants to find more ways to take physical gold back to Hong Kong and have that exposure.’

   

  This is the largest individual investor in mainland China and I tell you over the last few years of having worked with him on the energy side, this is the first time I have seen him so aggressively looking for gold related opportunities.

  In the full interview, insiders Amir Adnani and Rick Rule share their experiences working with others large investors, current strategies and expectations of what’s to come:

  
  (Watch at Youtube)

  The reason for why these high net worth individuals are rapidly moving into gold related assets, notes Adnani, is that they are not necessarily all that concerned with the current price and how high it may go in the future, but rather, because precious metals are backed with thousands of years of evidence that they are the asset of last resort during crisis:

  That’s one… the second one… we’re very fortunate at Gold Mining… one of the board members of our company who has been a founder of the company since day one is a Brazilian billionaire by the name of Mario Garnero…

   

  When I look at the level of interest that his organization has in terms of wanting that direct exposure to gold… I talked to them about why they are looking at this…

   

  They’re focused on one factor that we seldom think about… We’re so fixated on price of gold… what they’re focused on… what the super wealthy are focused on… what the billionaires are focused on… is the fact that gold plays that hedge in your portfolio… that’s it’s the insurance in the portfolio…

   

  It may not necessarily be as critical to think whether it’s $1200 an ounce or $1300… we fixate so much on the price… and we forget that irrespective of what it’s trading at on any given day it’s meant to be an insurance policy… it’s meant to be protection of wealth and preservation of wealth…

   

  It’s a great reminder when you look at the first trading day after Brexit… I remember looking at my own portoflio.. and looking at the market… and everything is red… the Dow is down over 500 points… the only thing up are gold stocks…

  But while insurance and wealth preservation are the key motivating factor for the super wealthy, another billionaire, Sprott U.S. Holdings CEO Rick Rule, says that even a tiny boost in investor demand could drive prices to new highs from here as investors stampede into hard asset stocks and physical holdings as the current bull market gains steam:

  Let me give you a startling statistic that tells you what an awakening might do… physical precious metals, certificated precious metals, and precious metals equities occupy about one-third of one percent of the savings and investment assets of the United States.

   

  The corresponding number at the top of the last bull market.. real bull market in 1981… was 8%…

   

  One third of 1% now… 8% at the top.

   

  I’m not suggesting to you that gold and precious metals related investments will ever get back to 8% but I would suggest to you that they will, in this bull market, approach the three decade median, which was 1.5%.

   

  If that occurred, you would see a more than four-fold increase in demand for precious metals and precious metals related equities… I think that could be reasonably dramatic.

   

  I am not one of these doom and gloom guys who says that gold is going win the war against the U.S. dollar.

   

  But if gold lost the war a little less badly… in other words, if gold and gold equities market shares got up to 1.5% of the investment savings matrix of the United States, that would represent a four-fold increase in demand.

  The world is primed for a serious, potentially devastating collapse of life as we know it. That may come with war, economic collapse, or both simultaneously. What we know from history is that those who prepared ahead of time and understood the ramifications of such events were positioned to not only survive, but thrive.

  The high net worth individuals who are moving into gold related assets see the writing on the wall, and they are positioning themselves now to ensure their wealth will be preserved.

  We strongly encourage you to do the same.

   

  

  

• Gold-Silver Divergence, Report 17 April, 2017

  This was a holiday-shorted week, due to Good Friday, and we are posting this Monday evening due to today being a holiday in much of the world.

  Gold and silver went up the dollar went down, +$33 and +$0.53 -64mg gold and -.05g silver. The prices of the metals in dollar terms are readily available, and the price of the dollar in terms of honest money can be easily calculated. The point of this Report is to look into the market to understand the fundamentals of supply and demand. This can’t necessarily tell you what the price will do tomorrow. However, it tells you where the price should be, if physical metal were to clear based on supply and demand.

  Of course, two factors make this very interesting. One is that the speculators use leverage, and they can move the price around. At least for a while. The other is that the fundamentals change. There is no guarantee that the prices of the metals will reach the fundamental price of a given day. Think of the fundamentals as gravity, not the strongest force in the system but inexorable, tugging every day.

  This week, the fundamentals of both metals moved, though not together. We will take a look at that below, but first, the price and ratio charts.

  The Prices of Gold and Silver
  

  Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It didn’t move much this week.

  The Ratio of the Gold Price to the Silver Price
  

  For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

  Here is the gold graph.

  The Gold Basis and Cobasis and the Dollar Price
  

  The scarcity (i.e. the cobasis, the red line) is in a gentle rising trend for about six months. This week, the cobasis was down slightly. Not a surprise given the (relatively) big price move of +$33. Nor does it appear to break the trend.

  Our calculated fundamental price of gold is at $1,301, just above the market price.

  Now let’s look at silver.

  The Silver Basis and Cobasis and the Dollar Price
  

  In silver, it’s much harder to say that there is an uptrend in the cobasis. Our indicator of scarcity is at the same level it was in October. Back then, the price of silver was $17.60 and on Thursday it was just about 90 cents higher.

  The fundamental price back then was just under $15. Now it’s just under $16.50. This happens to be down about 40 cents this week.

  With the fundamental of gold rising, and that of silver falling, it’s not surprising that the fundamental gold-silver ratio is up to a bit over 79.

  © 2017 Monetary Metals

  

• What's Your Plan B?

  Authored by Charles Hugh-Smith via OfTwoMinds blog,

  Although Plan B includes a wide spectrum of options, these three basic categories define three different purposes for having an alternative residence lined up.

  We all have a Plan A–continue living just like we’re living now.

  Some of us have a Plan B in case Plan A doesn’t work out, and the reasons for a Plan B break out into three general categories:

  1. Preppers who foresee the potential for a breakdown in Plan A due to a systemic “perfect storm” of events that could overwhelm the status quo’s ability to supply healthcare, food and transportation fuels for the nation’s heavily urbanized populace.

   

  2. People who understand their employment is precarious and contingent, and they might have to move to another locale if they lose their job and can’t find another equivalent one quickly.

   

  3. Those who tire of the stresses of maintaining Plan A and who long for a less stressful, less complex, cheaper and more fulfilling way of living.

  The Fragility and Vulnerability of Highly Optimized Supply Chains

  Many people are unaware of the fragility of the supply chains that truck in food, fuel and all the other commodities of industrialized comfort to cities. As a general rule, there are only a few days of food and fuel in a typical city, and any disruption quickly empties existing stocks. (Those interested in learning more might start with the book When Trucks Stop Running: Energy and the Future of Transportation.)

  Most residents may not realize that the government’s emergency services are actually quite limited, and that a relatively small number of casualties/injured people (for example, a few thousand) in an urban area would overwhelm services designed to handle a relative handful of the millions of residents.

  Authorities can call up the National Guard to maintain order, but the government isn’t set up to provide food and fuel to millions of people stranded by a natural disaster or a "Black Swan" (unexpected disruption).

  To reduce costs, supply chains and other essential systems have been stripped of redundancies–any break in the optimized flow has the potential to cripple the entire system. Since these highly optimized systems work so well most of the time, we don’t really understand the vulnerabilities that lurk just below the surface of "just in time" deliveries and other efficiencies.

  This inherent fragility has long fueled interest in rural "bug-out" retreats, a topic I recently addressed in Having A 'Retreat' Property Comes With Real Challenges.

  Where Do We Go When the Economy Falters?

  For the past eight years, US politicians and Federal Reserve authorities have attempted to repeal the classic business cycle of growth, stagnation, recession and renewed growth. It may appear they’ve succeeded, but the era’s slow growth has been sustained by unprecedented expansions of debt in the government, corporate and private sectors.

  This extraordinary expansion of debt has been enabled by a decline in interest rates. Most observers with a sense of history view these extremes of debt expansion and near-zero interest rates as unsustainable and destabilizing:

  

  (Source)

  In other words, extending the expansion cycle by extreme policy measures cannot actually repeal the business cycle; rather, these policy extremes increase the likelihood that the eventual recession will be deeper and/or longer than it would have been absent the policy extremes.

  Thus we can anticipate a recession of some sort, in which mal-investments and unpayable debts are liquidated and written off, and credit expansion (and the consumption that depends on it) slows or even reverses, as it did in the 2008-09 recession.

  Employers must lay off employees when sales and profits fall, and as incomes fall, sales fall further, creating a feedback loop of mutually reinforcing declines in household income and spending.

  When the music finally stops, many laid-off employees won’t be able to find a chair (i.e. another job). Without a job, most people can’t afford to remain in high-cost urban centers for long.

  When the 2000 recession gutted employment in the San Francisco Bay Area, 100,000 people moved away.

  Recent immigrants to wealthy metro areas have the option of returning home to the village or town they’d left to seek work in the city. Many immigrants from south of the border have invested their earnings in building new homes in their villages of origin. When the economy north of the Rio Grande falters, they can return to the home they built when their incomes were high.

  In China, many of the urban workers laid off in slow periods return to their villages, where there is a source of food (farms) and a roof over their head (the family home).

  Today’s "rootless Cosmopolitans" (urban dwelling Americans) typically lack a village they can return to in hard times. So a common Plan B is to seek an equivalent low-cost place to retreat to in recessions.

  Where Do We Go When We Burn Out?

  There’s a simple phrase that embodies the exhaustion and dissatisfaction we experience when we feel like we’re on a treadmill going nowhere that’s speeding up: Burn-out.

  As Historian Fernand Braudel (and others) observed, cities have always had a higher cost of living than the countryside—and offered higher pay scales. Cities aggregate capital, talent and power, and while this dynamism serves to raise many out of poverty, it can also exacerbate wealth and income inequality.

  The globalization of labor and capital combined with the aforementioned policy extremes has deepened the divide between "haves" and "have-nots" in many urban regions. Those who bought their homes in desirable metro areas for $150,000 are much wealthier now that these modest homes fetch $750,000 or more. Young people with conventional jobs will never be able to afford these home prices, and so the time-honored source of middle-class security–home ownership– is out of reach.

  Many of those who dove in and bought a home are stretching to pay crushing mortgages, soaring taxes and higher costs for healthcare and childcare. They are burning out, and their Plan B is a permanent move to a less burdensome and more fulfilling life elsewhere.

  Three Different Purposes, Three Different Durations of Residence

  Although Plan B includes a wide spectrum of options, these three basic categories define three different purposes for having an alternative residence lined up, and these purposes define three different durations of Plan B occupancy.

  While the serious prepper with a "bug-out" Plan B might be planning for the long haul, others will view their "bug-out" Plan B preparations as a temporary arrangement–a place to go in the event of a natural disaster such as an earthquake or hurricane, or localized social unrest.

  Such a temporary home-away-from-home could be as simple as an RV parked in the parents' driveway, a spare room in a relative’s house or more elaborately, a storage shed turned into a "tiny house."

  Those planning for the eventuality of a much lower income due to recession will have a much different Plan B, as they need dirt-cheap housing for an extended occupancy that might last from a few months to as long as a few years.

  The recession Plan B must include planning for childcare/schooling, healthcare, employment/earning a living—all the day-to-day components of Plan A.

  The recession Plan B also has to account for the possibility that the return to the Plan A lifestyle will no longer be an option due to health issues, the decline of the sector of employment, or permanent declines in household income.

  The burn-out Plan B is intended to be permanent. Plan A is being replaced by a Plan B that must provide the essentials of home, work and community–what I call fully functional residence.

  

  

• After 'Modest' 250% S&P Returns, Corporate Pension Funding Levels Roughly Same As 2008

  We spend a lot of time writing about public pensions because the aggregate underfunding levels, $3 – $5 trillion on the low end, are simply staggering and at some point they will be realized for the ponzi schemes that they are and the systemic risk they represent to the global financial system.  Until then we’ll just keep shouting into the abyss.

  And while we don’t spend as much time on corporate pensions, for some companies their underfunded defined benefit obligations will almost certainly result in their demise at some point in the future.  As a recent study from Pensions & Investments points out, the top 100 corporate pensions were underfunded by over $250 billion at the end of 2016.  Moreover, despite a 250% S&P rally from the 2009 lows, corporate pensions have only managed to improve their funded status from 79.1% in 2008 to 84.5% today. 

  The aggregate funding deficit for P&I’s universe rose to $258 billion as of Dec. 31, up 5.3% from a deficit of $245 billion the previous year.

   

  The average funding ratio of the 100 largest U.S. corporate defined benefit plans continued to slide in 2016, dropping to 84.5% from 85.1% at the end of 2015 and 85.7% at the end of 2014, Pensions & Investments’ annual analysis of corporate SEC filings shows.

   

  “The big story on DB plan funding is how little it’s recovered from the big downturn in the recession,” said Alan Glickstein, Dallas-based senior retirement consultant at Willis Towers Watson PLC.

   

  The average funding ratio for P&I’s universe was 108.6% at the end of 2007, which plunged to 79.1% at the end of 2008 at the peak of the financial crisis.

  Meanwhile, the bottom 10 corporate pension funds alone, as ranked by funded percentage, were underfunded by nearly $70 billion. 

  

   

  And while a $250 billion funding shortfall is significant, at least investors can take some solace in the fact that corporate pensions, unlike their public counterparts, are using somewhat reasonable discount rates to calculate the present value of their future funding obligations.  According to P&I, the average corporate pension used a discount rate of 4.39% in 2016…

  The average discount rate used to calculate plan liabilities began to decline in 2008, dropping to 4.05% in 2012 from 6.45% in 2008. The average discount rate used by the plans in P&I’s universe was 4.39% in both 2015 and 2016.

  …compared to 7.5% for several public pensions like CalPERS in California.

  But, it’s no big deal…if public pensions lower their discount rates to force them inline with private corporate assumptions it would only increase net underfundings by $3.5 trillion…no biggie….taxpayers can definitely absorb that.

  

  

  

• Taxation Is Theft

  It’s a double-whammy for the U.S. taxpayer. Bloomberg notes that not only are many Americans writing yet another check to Uncle Sam this tax season, they’re also paying more to have someone handle their returns. The Labor Department’s consumer-price index for tax return preparation rose 2.4 percent, the third-biggest monthly gain ever, to a record in March.

  Such trends show why firms like Intuit Inc., the maker of TurboTax, and H&R Block Inc., have spent millions of dollars lobbying Congress to limit efforts to simplify the tax-filing process.

  

  But it gets worse, as Andrew Napolitano writes via The Mises Institute; with a tax code that exceeds 72,000 pages in length and consumes more than six billion person hours per year to determine taxpayers’ taxable income, with an IRS that has become a feared law unto itself, and with a government that continues to extract more wealth from every taxpaying American every year, is it any wonder that April 15th is a day of dread in America?

  Social Security taxes and income taxes have dogged us all since their institution during the last century, and few politicians have been willing to address these ploys for what they are: theft.

  During the 2012 election, then-Texas Gov. Rick Perry caused a firestorm among big-government types during the Republican presidential primaries last year when he called Social Security a Ponzi scheme. He was right. It’s been a scam from its inception, and it’s still a scam today.

  When Social Security was established in 1935, it was intended to provide minimal financial assistance to those too old to work. It was also intended to cause voters to become dependent on Franklin Delano Roosevelt’s Democrats. FDR copied the idea from a system established in Italy by Mussolini. The plan was to have certain workers and their employers make small contributions to a fund that would be held in trust for the workers by the government. At the time, the average life expectancy of Americans was 61 years of age, but Social Security didn’t kick in until age 65. Thus, the system was geared to take money from the average American worker that he would never see returned.

  Over time, life expectancy grew and surpassed 65, the so-called trust fund was raided and spent, and the system was paying out more money than it was taking in – just like a Ponzi scheme. FDR called Social Security an insurance policy. In reality, it has become forced savings. However, the custodian of the funds – Congress – has stolen the savings and spent it. And the value of the savings has been diminished by inflation.

  Today, the best one can hope to receive from Social Security is dollars with the buying power of 75 cents for every dollar contributed. That makes Social Security worse than a Ponzi scheme. You can get out of a Ponzi investment. You can’t get out of Social Security. Who would stay with a bank that returned only 75 percent of one’s savings?

  The Constitution doesn’t permit the feds to steal your money. But steal, the feds do.

  Also in 2012, during a Republican presidential debate, a young man asked the moderator to pose the following question to the candidates: “If I earn a dollar, how much of it am I entitled to keep?” The question was passed to one of the candidates, who punted, and then the moderator changed the topic. Only Congressman Ron Paul gave a serious post-debate answer to the young man’s question: “All of it.”

  Every official foundational government document – from the Declaration of Independence to the U.S. Constitution to the oaths that everyone who works for the government takes – indicates that the government exists to work for us. The Declaration even proclaims that the government receives all of its powers from the consent of the governed. If you believe all this, as I do, then just as we don’t have the power to take our neighbor’s property and distribute it against his will, we lack the ability to give that power to the government. Stated differently, just as you lack the moral and legal ability to take my property, you cannot authorize the government to do so.

  Here’s an example you’ve heard before. You’re sitting at home at night, and there’s a knock at the door. You open the door, and a guy with a gun pointed at you says: “Give me your money. I want to give it away to the less fortunate.” You think he’s dangerous and crazy, so you call the police. Then you find out he is the police, there to collect your taxes.

  The framers of the Constitution understood this. For 150 years, the federal government was run by user fees and sales of government land and assessments to the states for services rendered. It rejected the Hamiltonian view that the feds could take whatever they wanted, and it followed the Jeffersonian first principle that the only moral commercial exchanges are those that are fully voluntary.

  This worked well until the progressives took over the government in the first decade of the 20th century. They persuaded enough Americans to cause their state legislatures to ratify the Sixteenth Amendment, which was designed to tax the rich and redistribute wealth. They promised the American public that the income tax would never exceed 3 percent of income and would only apply to the top 3 percent of earners. How wrong – or deceptive – they were.

  Yet, the imposition of a federal income tax is more than just taking from those who work and earn and giving to those who don’t. And it is more than just a spigot to fill the federal trough. At its base, it is a terrifying presumption. It presumes that we don’t really own our property. It accepts the Marxist notion that the state owns all the property and the state permits us to keep and use whatever it needs us to have so we won’t riot in the streets. And then it steals and uses whatever it can politically get away with. Do you believe this?

  There are only three ways to acquire wealth in a free society. The inheritance model occurs when someone gives you wealth. The economic model occurs when you trade a skill, a talent, an asset, knowledge, sweat, energy or creativity to a willing buyer. And the mafia model occurs when a guy with a gun says: “Give me your money or else.”

  Which model does the government use? Why do we put up with this?

  

  

• Russia Warns U.S. Not To Act Unilaterally Against North Korea

  In response to the US vice president, Russia’s foreign minister Sergey Lavrov said that Mike Pence’s statement on the US running out of “strategic patience”
  towards Pyongyang does not contribute to resolving the crisis. The top Russian diplomat also voiced hope there will be no repeat of the US strike on Syria in North Korea.

  On Monday, speaking from the DMZ, Mike Pence said the world has witnessed the “strength and resolve of Trump in actions taken in Syria and Afghanistan,” and threatened North Korea “not to test” this resolve or “or the strength of the armed forces of the United States.”

  Lavrov responded by saying “I hope that there won’t be any unilateral actions like we recently saw in Syria and that the US will follow the policies Trump repeatedly declared during his election campaign.” He also warned the US not to take any military actions, stressing that the “risky nuclear and missile endeavors of Pyongyang” violating UNSC resolutions could not be used as an excuse for violating international law and the UN Charter “in the same fashion” as in Syria.

  The period of US policy before the current escalation could be hardly described as an “era of strategic patience,” Lavrov added.

  “I cannot call the Obama administration’s period an ‘era of strategic patience,’ as the US has been quite harshly limiting North Korea’s capabilities to develop economy sectors related to nuclear or energy areas,” Lavrov said, referring to past US initiatives, many of them backed by the UN Security Council.

  Also addressing the matter, Kremlin spokesman Dmitry Peskov said that harsh statements do not contribute to peace and stability in the region, while commenting on South Korean President Hwang Kyo-ahn’s promise to “implement intensive punitive measures” on Pyongyang in case of any “provocations.”

  “Our position is well known and consistent. We call on all sides to avoid any actions which might be perceived as a provocation. And we stand for the continuation of coordinated international efforts in existing formats to resolve the North Korean problem,” Peskov said.

  Meanwhile tensions on the Korean Peninsula remain high: after Pyongyang conducted a missile test amid joint US-South Korea drills in March, and with at least one and as many as 3 US aircraft carrier groups headed toward the Peninsula, today North Korea’s UN ambassador said the US has “created a dangerous situation in which the thermonuclear war may break out at any moment on the peninsula and pose a serious threat to the world’s peace and security, to say nothing of those of northeast Asia.” Separately, North Korea told the BBC that the country would be “conducting more missile tests on a weekly, monthly and yearly basis,” in effect assuring a provocation.

  Judging by the market’s response on Monday, a global thermonuclear war would be just the catalyst to pust the S&P back over its all time high of 2,400.

  

  

• Some Americans May Get Stranded On The 'Mexican Side' Of Trump's 'Beautiful' Border Wall

  While happy campaign rhetoric made it sound like building a 2,000 foot wall along the U.S. southern border would be a walk in the park, in reality, much like repealing and replacing Obamacare and/or passing meaningful tax reform, various regulatory and other hurdles could tie up the project for years.

  One such issue that threatens the viability of Trump’s ‘beautiful’ border wall stems from the fact that most of the southern border of Texas is owned by private individuals which means the U.S. government will have to take 100s landowners to court to exert its power of eminent domain.  Moreover, as NBC points out, some folks live so close to the Rio Grand River that they may end up on the ‘Mexican side’ of the wall.  Of course, these landowner fights could provide all the leverage needed for liberal lawyers to hold up the border wall construction forever, or at least until Trump gets voted out of office.

  When the U.S. government built the fence, it had to take hundreds of landowners to court to use its power of eminent domain. That’s because unlike in other southern border states, most Texas border land is privately owned, and tough terrain and water use agreements with Mexico meant some fence was built a mile or more north of the river.

   

  With court fights also expected over Trump’s wall, the Texas Civil Rights Project has begun signing up landowners and identifying people who might be affected.

   

  Under the U.S. Constitution, the government must prove it wants to seize land for public use and must offer a landowner “just compensation.” While challenging the wall’s “public use” would be difficult, those who believe they’re not getting the full value of their land could take the case to court, setting up trials that could take years.

   

  Even if they don’t win, lawyers hope to tie up the wall in court long enough that politics could effectively stop it, either in Congress or after another election.

  “That’s a fight that we’ve been ready to fight,” said Efren Olivares, a lawyer with the Texas Civil Rights Project.

  

   

  Of course, when it comes to conservatives in Texas, almost nothing draws more ire from voters than the idea of stripping them of their private property rights through the assertion of eminent domain.  Moreover, in this specific instance, those voters will find unlikely support from any number of liberal organizations who will be all too willing to fund their legal costs to fight Trump and his wall.

  In San Benito, Eloisa Tamez spent seven years trying to stop the government from running the fence through her property, which had been in her family since the 1700s. The government eventually won, but only after agreeing to pay about $56,000, many times what it initially offered. She uses a gate to access the part of her property that’s on the other side of the fence.

   

  Now, she’s preparing for the possibility of another court battle.

   

  “I probably have one more decade to live, and I had one decade of torture,” said Tamez, 82. “I think if they start that business again, I don’t know how much fight I’ll have left in me, but I’m going to fight it until the end.”

  Something tells us that yet another Trump initiative just got demoted from a ‘near certainty’ to a ‘maybe’…right along with healthcare and tax reform.

  

  

• US Restaurant Industry Suffers Worst Collapse Since 2009

  What tentative hope had emerged for a rebound for the U.S. restaurant industry at the start of the year, was doused last month when in its February Restaurant Industry Snapshot, TDn2K found that “Restaurant Sales and Traffic Tumble in February” and reported that same-store sales fell -3.7% in February, with traffic declining -5.0% . It did however leave a possibility that things may turn around as a result of the prompt disbursement of withheld tax refunds in the month, which it suggested may have adversely affected sales and traffic.

  Alas, that did not happen, and restaurant struggles continued in March as sales and traffic again declined year-over-year: same-store sales were down 1.1% while traffic dropped 3.4%. March results were disappointing for an industry desperately trying to reverse performance trends; with sales now negative in 11 out of the last 12 months, the longest stretch since the financial crisis. There was a modest improvement sequentially, however, and while still negative, sales improved by 2.5% points compared to February as traffic rose marginally by 1.6%.

  

  Source: TDn2K

  Explaining the sequential “improvement”, Victor Fernandez, executive director of insights and knowledge for TDn2K, said “March sales were expected to be somewhat better than February due in part to the catch-up of tax refunds that were initially delayed in February. In addition, the industry likely benefited from the shift in the Easter holiday, which fell in March in 2016. For the largest segments (quick service and casual dining), this holiday represents a potential loss of sales.”

  However, it was not enough: “The fact that sales were still negative in March given these tailwinds highlights the challenge chains have faced since the recession. Factors like restaurant oversupply and additional competition for dining occasions continue to take their toll on chain traffic.”

  As TDn2K further adds, with a same-store sales decline of 1.6%, the first quarter of 2017 was the fifth consecutive quarter of negative results. The last time the industry experienced a similar period was in 2009 and the first half of 2010, as the economy began recovery following the recession. Only this time the move is in the opposite direction. 

  Furthermore, the first quarter of 2017 followed a very disappointing 2.4 percent sales drop in the fourth quarter of 2016, highlighting the difficult operating environment currently facing many operators.

  Worse, same-store traffic dropped even more, or -3.6% in Q1, consistent with the average -3.4% quarterly declines experienced since the beginning of 2016.

  The growth rate in check average continues to trend down slowly. For the first quarter of 2017, the average check was up 1.9%, somewhat lower than the average 2.3%growth reported for 2016. This is likely the result of brands relying more on promotions and conservative menu price increases in response to continual declines in traffic. It confirms that restaurants don’t have even the most modest pricing power to offset volume declines.

  On the other side of the spectrum, as has been the case in recent quarters, segments with the highest and lowest average check experienced better results. The strongest performance in the first quarter came from upscale casual, followed by fine dining and quick service. It is important to mention that fine dining and upscale casual are among the segments most negatively impacted by the shift in Easter.

  Meanwhile, the worst segments in the first quarter were family dining and fast casual. Family dining concepts were also among the most negatively affected by the Easter shift.

  A separate report from the National Restaurant Association found that its proprietary Current Situation Index, which measures current trends in four industry indicators (same-store sales, traffic, labor and capital expenditures), stood at 98.8 in February – up 0.2 percent from a level of 98.6 in January, however this was the fifth consecutive month in which the Current Situation Index contracted (below 100), as  operators continued to report dampened same-store sales and customer traffic levels.

  

  Furthermore, the NRA found that restaurant operators overall continued to report soft same-store sales in February, with results that were similar to January’s levels. 33% of restaurant operators reported a same-store sales increase between February 2016 and February 2017, while 51% reported a sales decline, a deterioration from January. Restaurant operators also reported dampened customer traffic levels in February.

  

  Only 27% of restaurant operators reported an increase in customer traffic between February 2016 and February 2017, while 57% reported a decline in customer traffic. In January, 26  percent of operators reported higher customer traffic levels, while 54% said their traffic declined.

  One notable finding in the TDn2k report was that despite waiters and bartenders being the fastest growing job category under the Obama “recovery”, restaurant operators list finding enough qualified employees to keep restaurants fully staffed as a primary concern. This is mainly due to skyrocketing restaurant churn rates as current restaurant workers believe they can find better options elsewhere, only to return disappointed. Turnover for restaurant hourly employees as well as managers increased again during February according to TDn2K’s People Report. These rates are currently higher than they have been in over ten years and rising.

  Making matters worse for restaurants, some are finding that only by  offering higher compensation can they retain workers. So even if wages have been increasing slowly in recent years, this is expected to change soon as the labor market continues to tighten. In fact, according to a recent survey by People Report, about 80% of restaurant companies reported having to offer additional financial incentives to attract candidates in tough recruiting markets. In most almost all cases, those incentives take the form of higher base pay. Who would have though that there is a shortage of line cooks and waiters in the US.

  While many continue to seek answers in the pernicious tailspin in the US restaurant industry within the supply side – pricing, competition, layout – the reality is that the key variable may remain with demand.  As some have speculated, it could simply be the reluctance or inability to eat out when money is being inflated elsewhere, to cover higher cost-of-living increases in other areas, such as rent or healthcare, even as wages for large parts of the population remain frozen.
  

  To be sure, restaurant spending is a thermometer for discretionary spending, which varies with how well consumers are doing, and it’s the first to react as Wolf Richter correctly points out. When consumers hit their limits, the first things they cut are discretionary items, such as eating out.

  As such, the worst tailspin in the US restaurant industry since 2009 remains the biggest flashing red alert suggesting that when it comes to that invincible dynamo behind the US economy, the American consumer, things have not been this bad in a long time.

  

  

• U.S. Propaganda Is Embarrassingly Bad (And Why It Matters)

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  

  When you want to see what U.S. deep state propagandists are up to, all you have to do is take a glance at what meme corporate media happens to be pushing any given week. It’s been almost a decade since I started observing and analyzing the corporate press on a daily basis, and I can now say unequivocally that the quality of American imperial propaganda has gone completely down the crapper.

  The believability of some of the stuff being pushed these days defies all logic and is easily dispelled with an ounce of critical thought, yet there it is, in our face on a daily basis almost taunting the intelligence of the U.S. population. Indeed, it appears the current strategy is no more sophisticated that proclaiming any and all dissent as being the result of “Russia operations.” This is done to prevent any actual debate on subjects of grave national importance since the U.S. government knows its claims don’t hold up to any real scrutiny. Why look into the veracity of a deep state claim when we can just dismiss alternative viewpoints as “Russian operations.”

  To see what I mean, take a look at some excerpts from a recent article published by ABC News, Behind #SyriaHoax and the Russian Propaganda Onslaught:

  As Syrian president Bashar al-Assad called videos of last week’s chemical attack a “fabrication,” a piece of propaganda promoted by a Russian cyber operation and bearing the hashtag #SyriaHoax has gained traction in the United States, analysts tell ABC News.

   

  Following the chemical weapons attack that killed dozens of civilians on Tuesday, Al-Masdar News, a pro-Assad website based in Beirut, published claims that “something is not adding up in [the] Idlib chemical weapons attack.” Its author cited “holes” in the accounts provided by the “Al-Qaeda affiliated” White Helmets leading to the conclusion that “this is another false chemical attack allegation made against the government.”

   

  That hoax story was promoted by a network of Russian social media accounts and ultimately picked up by popular alt-right personalities in the United States, including Mike Cernovich, one of the leading voices in the debunked ‘Pizzagate’ conspiracy theory. Cernovich popularized its new hashtag — #SyriaHoax — and sent it soaring through cyberspace. According to Trends24, within hours of the retaliatory missile strike President Donald Trump launched on Thursday night, #SyriaHoax was the No. 1 trending Twitter topic in the United States.

  There are a few things I want to highlight when it comes to these first three paragraphs. First, anyone paying the slightest amount of attention to what’s happening in the world would have immediately and independently questioned why Assad would launch a chemical attack guaranteed to lead to widespread international condemnation at the very moment he was most secure in his own position. No “Russian operation” needed to recognize Assad’s total lack of motive. Indeed, two of America’s more respectable former Congressmen, Ron Paul and Dennis Kucinich both questioned the ridiculous deep state Syria narrative.

  Moreover, the reason corporate media needs to call #SyriaHoax a Russian operation is because it became the No. 1 trending topic in America. The public can’t be allowed to think this train of thought represents actual grassroots thinking (which it does), because that would imply that trust in the status quo is evaporating rapidly and uncontrollably (it is).

  Now here’s the very next paragraph of the article.

  J.M. Berger of The International Centre for Counter-Terrorism at The Hague, who studies propaganda and social media analytical techniques, said #SyriaHoax is “a clear example of a Russian influence campaign” designed to undermine the credibility of the U.S. government.

  This is pure comedy. As if the U.S. government needs Russia to “undermine its credibility.” It does a perfectly good job of doing that all on its own. Was Russia responsible for bailing out Wall Street and funneling trillions to financial criminals, thus propelling the nation into a new Gilded Age where a handful of oligarchs steal everything with impunity while the rest of the country drowns? Didn’t think so.

  It’s all very reminiscent to how the pathetic Democratic establishment responded to Hillary Clinton’s loss. Rather than admitting she was a horrible candidate who ran a delusional campaign, theyers merely deflected criticism to Russia, James Comey, Bernie Bros, etc. It’s been a very embarrassing public strategy, and the deep state is now resorting to the exact same strategy through its corporate media parrots. All dissent is a Russian operation. Anything bad that happens to America has nothing to do with our corrupt, clownish leadership, but is Putin’s fault. This is where all of this is going, and it’s further evidence that the American empire has entered a much more pronounced and dangerous period of decline.

  From a personal perspective, I know for a fact that the corporate media has a very specific narrative to falsely categorize anyone who questions the status quo as a Russian operative, because it happened to me via The Washington Post. As I noted in the piece, Liberty Blitzkrieg Included on Washington Post Highlighted Hit List of “Russian Propaganda” Websites:

  Let’s take Liberty Blitzkrieg for example. Despite the fact that my site is mentioned on “the list,” nobody from PropOrNot bothered to contact me while doing their “research.” They could’ve asked very simple questions about how the site is run, who owns it, and who makes decisions about editorial content. Furthermore, I doubt they did any such research with regard to any of the mentioned sites before slandering them.

   

  Since they failed to do any real work, let me answer several of these questions. I, Michael Krieger, am the 100% owner of Liberty Blitzkrieg. I am the only person who makes decisions on what to publish and when. I have absolutely no connections, financial or otherwise, to the Russian government, Russian interests, or the interests of any other government or government related group. Moreover, there is simply nobody on planet earth who has any influence on what I write or what I publish. I left a very successful and financially lucrative job to do what I do now because my passions and ethical grounding pushed me in this direction. If I was interested in making enormous sums of money, I could’ve easily stayed on Wall Street.

   

  Moreover, I rarely write about Russia, with the exception of trying to prevent insane neocons and neoliberals in our government from actively seeking a military confrontation, because I — like most normal human beings — would prefer not to contribute to the manifestation of World War 3. Likewise, I try to prevent war breaking out in all circumstances where I think it can and should be avoided. I intentionally almost never use RT as a source, and I’ve never quoted anything from Sputnik. Unlike The Washington Post, I try to be extremely diligent about not publishing fake news, but I am a very strong critic of U.S. government policy, because much of U.S. government policy is certifiably insane and unethical. You can disagree with my opinion on that all you’d like, but I challenge anyone to find anything that could reasonably be considered pro-Russia propaganda on my website. If Liberty Blitzkrieg really is a Russian propaganda site, this should be easy to do since I’ve published thousands of articles over the years.

  I have yet to receive an apology from The Washington Post for the lies it shamelessly promoted, but I digress.

  Perhaps most importantly, the U.S. deep state is increasingly losing the very people it depends on to sustain even the slightest degree of public credibility. I’m one example. Born in the belly of the financial beast of New York City, I was raised privileged, went to the right schools, graduated from a top university and launched my Wall Street career at the age of 22. Ten years later, I was earning a stupid amount of money for adding absolutely nothing to society, but the response from the powers that be to the financial crisis was so grotesque and unethical I could no longer in good faith continue my career. This isn’t the sort of thing that’s supposed to happen. People like me are supposed to stay loyal to the system for life due to the rewards the system bestows upon us. The fact that someone like me became opposed to a system that was so personally lucrative should be seen as a red flag for those in power. If it happened to me, it’s happened to countless others.

  Due to my upbringing and career on Wall Street, many of my close friends are from a socioeconomic class that should be deeply loyal to the power structure. The big secret is that they aren’t. Sure, many of them are forced to work in jobs and industries they despise due to familiar obligations and responsibilities, but don’t mistake this for faith or trust in the status quo. The vast majority of people I know fully understand that the U.S. system is a corrupt cesspool of shifty operators and rent-seeking scamsters. While they may need to play the game to survive and protect their families, they have no loyalty to or trust in the current paradigm and that will ultimately be very important. Multiple people told me that The Washington Post’s slandering of my website was a huge wakeup call for them, which highlighted just how dishonest the corporate press has become.

  My theory is that the U.S. has entered a more dangerous period of late-stage imperial collapse. Donald Trump was elected by many to reverse this course, but with his recent pivot away from domestic concerns to focus on war, he’ll likely preside over a dramatic and chaotic period of decline. When this happens, all sorts of people will come out of the woodwork, and you’ll see very quickly how little support the deep state actually has amongst the populace. This period will be frightening to witness, but it’s also a necessary evil.

  We must harness the opportunity and replace the corrupt, warmongering, Wall Street controlled dead-end culture and economy with a new paradigm after the old one crashes and burns, which it undoubtably will.

  

  

Digest powered by RSS Digest