Today’s News 28th March 2017

  • The Countries Where "Made In America" Really Matters

    With President Trump’s America First agenda, we thought it would be useful to understand which other nations value America highly.

    As Statista’s Martin Armstrong details, the Made-In-Country-Index (MICI) 2017 has shed light on the reputation of products produced in 49 countries (plus the EU) worldwide. In the overall ranking, the U.S. placed in a ‘could do better’ joint 8th with France and Japan.

    The infographic below takes a look at the countries in which ‘Made in USA’ is determined to have the best reputation of all of the surveyed labels.

    Infographic: Where 'Made in USA' Has the Best Reputation | Statista

    You will find more statistics at Statista

    In total there are eight countries full of respect for U.S. made goods, including Brazil, Argentina, India, and of course the United States itself. For perspective, the top rated label is ‘Made in Germany’ which finds itself the most popular in thirteen countries.

  • Russia Conspiracy Theorists May Want To Take A Look At John Podesta

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

     

    Dot connectors, Twitter diagram creators and newly minted Russia-conspiracy sleuths from sea to shining sea take note.

    Since anything connected to Russia is now considered treasonous, I’ve got a great story for you to sniff out.

    It relates to John Podesta, but somehow I doubt you’ll be interested in this one…

    The Daily Caller reports:

    John Podesta, former Secretary of State Hillary Clinton’s 2016 national campaign chairman, may have violated federal law by failing to disclose the receipt of 75,000 shares of stock from a Kremlin-financed company when he joined the Obama White House in 2014, according to the Daily Caller News Foundation’s Investigative Group.

     

    Joule Unlimited Technologies — financed in part by a Russian firm —  originally awarded Podesta 100,000 shares of stock options when in 2010 he joined that board along with its Dutch-based entities: Joule Global Holdings, BV and the Stichting Joule Global Foundation.

     

    When Podesta announced his departure from the Joule board in January 2014 to become President Obama’s special counsellor, the company officially issued him 75,000 common shares of stock.

     

    The Schedule B section of the federal government’s form 278 which — requires financial disclosures for government officials — required Podesta to “report any purchase, sale or exchange by you, your spouse, or dependent children…of any property, stocks, bonds, commodity futures and other securities when the amount of the transaction exceeded $1,000.”

     

    The same year Podesta joined Joule, the company agreed to accept 1-Billion-Rubles — or $35 million — from Rusnano, a state-run and financed Russian company with close ties to President Vladimir Putin.

     

    Anatoly Chubais, the company CEO and two other top Russian banking executives worked together with Podesta on the Joule boards. The board met six times a year.

     

    Ron Hosko, a former FBI assistant director said because of the Kremlin backing, it was essential Podesta disclose the financial benefits he received from the company.

     

    “I think in this case where you’re talking about foreign interests and foreign involvement, the collateral interest with these disclosure forms is put in the forefront of full disclosure of any foreign interest that you may have,” he told TheDCNF in an interview.

     

    The existence of the 75,000 shares of Joule stock was first revealed by the Government Accountability Institute report issued last year.

     

    But Podesta didn’t pocket all the shares. Correspondence from Podesta to Joule instructed the firm to transfer only 33,693 shares to Leonidio Holdings, a brand-new entity he incorporated only on December 20, 2013, about ten days before he entered the White House.

     

    Leonidio is registered in Delaware as a limited liability corporation. Podesta listed the address of his daughter, Megan Rouse, in the incorporation papers. His mother and father also appear to be co-owners of Leonidio.

     

    TheDCNF made multiple inquiries to OGE and received no reply. TheDCNF inquiries to Mr. Podesta were not returned.

    Personally, I doubt any of the above is a huge deal, and I certainly don’t think Podesta is working for Vladimir Putin under the table. However, just imagine the hysteria if the above narrative could’ve been connected to anyone in Trump’s orbit. It would’ve been plastered on the front page of The Washington Post and The New York Times with headlines like, “More Financial Ties Emerge Between Those in Trump’s Orbit and Putin.”

    Naturally, you won’t see this story hyped because it doesn’t fit the corporate media narrative, and the narrative is all they care about.

  • Dick Cheney Says Russian Meddling in American Election Could Be Considered 'An Act of War'

    Congratulations democrats! This is the moment in your life when you come to realize you’ve become one and the same as everything you’ve always hated about humanity. You and Dick Cheney, professional neocon war monger, are in agreement that Russia waged war against America this past election, by way of hacking into John Podesta’s email box and then providing that information to Wikileaks to publish and help humiliate an already beleaguered democratic party.

    Bear in mind, the black hats in the CIA have yet to actually prove to the American people an actual connection between Wikileaks and the Russian government. The only evidence they’ve publicly provided us with is laughable circumstantial evidence — backed up and supported by a sundry of unnamed sources deep from within our intelligence apparatus. But we should strongly consider going to war with a super nuclear power — because strategically — that’s the best way to end this charade of humanity once and for all.

    But here’s Dick Cheney, the man who started it all — war in the middle east — which has cost the lives of at least 1.3 million people (some estimate the total deathtoll could be as high as 4 million since the wars began after 9/11). Total treasury expenditure from the American pleb is in excess of $5 trillion — but it’s probably more. Some might say Dick Cheney is the single worst human to walk the face of the earth since Pol Pot.

    Nevertheless, he’s in agreement that Russian’s actions against our ‘democratic process’, one that was overtly rigged against Bernie Sanders, proven in the Wikileaks, was ian act of war. Fall in line little ducks, poor fat little ducks, and sign up your kids to fight in the coming Moscow offensive —  to defend the honor of John “Pizza map” Podesta.

    Content originally generated at iBankCoin.com

  • Insider Reveals How DARPA Will Control Our Minds: "If Even 20% Of This Is True…"

    Things are so far gone, that we have no idea, warns SHTFplan.com's Mac Slavo, people have virtually no sense of how deeply we are being steered off the path.

    Our very opinions, the information we receive, and the way in which our brains determine the strength of our opinions is all being skewed by algorithms, and by deliberate manipulations.

     

    Science fiction is behind the curve of what they are actually attempting right now. A few more years of censorship and editing of content through social media, and a few more years of total integration with technology, and humanity may no longer be recognizable.

     

    It certainly won’t be free unless some very raw facts are quickly faced and dealt with.

    DARPA Insider Reveals the Coming Hive Mind Control Grid: “If Even 20% Of What This Guy Says Is True…”

    Via The Daily Sheeple

    The video below features a keynote by Dr. Robert Duncan regarding what can only be described as our coming hive mind control grid. He isn’t just talking about advances in transhumanism, the singularity, or artificial intelligence. He’s talking about how to control the minds of everyone on the planet and evolving humanity in a technological sense… whether they like it or not.

    Duncan professes with shame that he worked on “Voice of God” weapons for the US Department of Defense, weapons which can make people think they are hearing voices in their heads in an attempt to control them. He says such weapons were tested back during Desert Storm and were quite effective at getting Iraqi soldiers to lay down arms without a shot fired.

    And that’s just what they had 20+ years ago. Can you imagine what they’re working on today?

    Duncan also touches on Project Blue Beam, remote neural monitoring, smart dust, and electronic telepathy technology which uses extremely low frequency waves.

    Despite attempting multiple times to put a “positive spin” on this information as he nervously delivers it, what this man is saying really can’t be spun in a positive way, not with these kinds of technology in the hands of the military-industrial complex President Eisenhower once gravely warned us about. Duncan notes scientists “are brainwashed into believing that everything we are doing is of benefit to mankind, but look who pays our bills? The military. It’s all for war, it’s all for control, for government control…”

    If even 20% of what this guy has to say is true…

    Just… you’ve got to see this for yourself.

  • Chinese Elites Scramble To Apply For US 'Golden Ticket' Visa

    As members of Congress in Washington debate raising the minimum required to obtain a U.S. immigrant investor visa from $500,000 to $1.35 million, Bloomberg reports concern about the hike has set off a scramble among wealthy would-be participants in China.

    China’s wealthy, using not-always-legal means to skirt capital controls to get their money out and at the same time gain residency in the U.S., are continuing to dwarf all others as the largest participants in the EB-5 program, despite heightened measures by the Chinese government.

    Chinese investors, several thousand a year, have made up as much as 85 percent of the annual EB-5 investor total, according to U.S. data provided by Rosen Consulting and the Asia Society. In 2015, China overtook Canada as the biggest foreign buyer of U.S. homes.

    Because Chinese individuals are limited to exchanging $50,000 worth of yuan a year, a 10th of what the EB-5 program requires, Bloomberg reports that some agents are advising clients who don’t already have assets offshore to use a means nicknamed "smurfing" to move their money.

    "Our suggestion to the client is to open three to four personal accounts in the U.S. or line up three to four friends’ accounts, so they can split the money and wire it to different personal accounts without being put on a blacklist by the Chinese authorities," said a Shanghai-based real estate agent who gave the surname Dong.

     

    "It may require a trip to the States to do so to facilitate the process."

    While the government in Beijing spent much of 2016 working to stop its citizens sending money abroad in order to stabilize its declining currency and foreign reserves, Chinese investors’ use of EB-5 continued anyway, totaling $3.8 billion in the fiscal year that ended Sept. 30, according to data from the U.S. State Department.

    EB-5 started decades ago as a way to create jobs in needy U.S. neighborhoods by attracting foreign investment. But it has run into political opposition amid charges the program is benefiting billionaire developers and being dominated by wealthy Chinese.

    "EB-5 has been a key program for capital flight that has been abused by Americans and Chinese people seeking to game the system," said Andrew Collier, an independent analyst in Hong Kong and former president of Bank of China International USA.

    While there’s no suggestion of wrongdoing by developers that receive funding from EB-5 (including the family of Jared Kushner, President Donald Trump’s son-in-law and senior adviser, who is seeking $850 million in EB-5 fundingrefinance and reconstruct its New York office building at 666 Fifth Avenue), a series of Securities and Exchange Commission cases against EB-5-linked immigrant investor centers led the U.S. Citizenship and Immigration Services to announce last week that they would audit the centers amid concern about fraud.

    Changes to the EB-5 minimum would affect property developers who rely on the program as a funding channel, said Michael Shaoul, chief executive officer at Marketfield Asset Management in New York.

    "Any interruption of the program or reduction in Chinese participation would have a meaningful effect on a development cycle that is already showing signs of strain in certain key U.S. cities," he said by email.

  • Foundation – Fall Of The American Galactic Empire

    Authored by Jim Quinn via The Burning Platform blog,

    “The fall of Empire, gentlemen, is a massive thing, however, and not easily fought. It is dictated by a rising bureaucracy, a receding initiative, a freezing of caste, a damming of curiosity—a hundred other factors. It has been going on, as I have said, for centuries, and it is too majestic and massive a movement to stop.”Isaac Asimov, Foundation

    “Any fool can tell a crisis when it arrives. The real service to the state is to detect it in embryo.”Isaac Asimov, Foundation

    I read Isaac Asimov’s renowned award winning science fiction trilogy four decades ago as a teenager. I read them because I liked science fiction novels, not because I was trying to understand the correlation to the fall of the Roman Empire. The books that came to be called the Foundation Trilogy (Foundation, Foundation and Empire, and Second Foundation) were not written as novels; they’re the collected Foundation stories Asimov wrote between 1941 and 1950. He wrote these stories during the final stages of our last Fourth Turning Crisis and the beginning stages of the next High. This was the same time frame in which Tolkien wrote the Lord of the Rings Trilogy and Orwell wrote 1984. This was not a coincidence.

    The tone of foreboding, danger, dread, and impending doom, along with unending warfare, propels all of these novels because they were all written during the bloodiest and most perilous portion of the last Fourth Turning. As the linear thinking establishment continues to be blindsided by the continued deterioration of the economic, political, social, and cultural conditions in the world, we have entered the most treacherous phase of our present Fourth Turning.

    That ominous mood engulfing the world is not a new dynamic, but a cyclical event arriving every 80 or so years. Eight decades ago the world was on the verge of a world war which would kill 65 million people. Eight decades prior to 1937 the country was on the verge of a Civil War which would kill almost 5% of the male population. Eight decades prior to 1857 the American Revolution had just begun and would last six more bloody years. None of this is a coincidence. The generational configuration repeats itself every eighty years, driving the mood change which leads to revolutionary change and the destruction of the existing social order.

    Isaac Asimov certainly didn’t foresee his Foundation stories representing the decline of an American Empire that didn’t yet exist. The work that inspired Asimov was Edward Gibbon’s multi-volume series, The Decline and Fall of the Roman Empire, published between 1776 and 1789. Gibbon saw Rome’s fall not as a consequence of specific, dramatic events, but as the result of the gradual decline of civic virtue, monetary debasement and rise of Christianity, which made the Romans less vested in worldly affairs.

    Gibbon’s tome reflects the same generational theory espoused by Strauss and Howe in The Fourth Turning. Gibbon’s conclusion was human nature never changes, and mankind’s penchant for division, amplified by environmental and cultural differences, is what governs the cyclical nature of history. Gibbon constructs a narrative spanning centuries as events unfold and emperors’ successes and failures occur within the context of a relentless decline of empire. The specific events and behaviors of individual emperors were inconsequential within the larger framework and pattern of historical decline. History plods relentlessly onward, driven by the law of large numbers.

    Asimov described his inspiration for the novels:

    “I wanted to consider essentially the science of psychohistory, something I made up myself. It was, in a sense, the struggle between free will and determinism. On the other hand, I wanted to do a story on the analogy of The Decline and Fall of the Roman Empire, but on the much larger scale of the galaxy. To do that, I took over the aura of the Roman Empire and wrote it very large. The social system, then, is very much like the Roman imperial system, but that was just my skeleton.

    It seemed to me that if we did have a galactic empire, there would be so many human beings—quintillions of them—that perhaps you might be able to predict very accurately how societies would behave, even though you couldn’t predict how individuals composing those societies would behave. So, against the background of the Roman Empire written large, I invented the science of psychohistory. Throughout the entire trilogy, then, there are the opposing forces of individual desire and that dead hand of social inevitability.”

    Is History Pre-Determined?

    “Don’t you see? It’s Galaxy-wide. It’s a worship of the past. It’s a deterioration – a stagnation!”Isaac Asimov, Foundation

    “It has been my philosophy of life that difficulties vanish when faced boldly.”Isaac Asimov, Foundation

    The Foundation trilogy opens on Trantor, the capital of the 12,000-year-old Galactic Empire. Though the empire appears stable and powerful, it is slowly decaying in ways that parallel the decline of the Western Roman Empire. Hari Seldon, a mathematician and psychologist, has developed psychohistory, a new field of science that equates all possibilities in large societies to mathematics, allowing for the prediction of future events.

    Psychohistory is a blend of crowd psychology and high-level math. An able psychohistorian can predict the long-term aggregate behavior of billions of people many years in the future. However, it only works with large groups. Psychohistory is almost useless for predicting the behavior of an individual. Also, it’s no good if the group being analyzed is aware it’s being analyzed — because if it’s aware, the group changes its behavior.

    Using psychohistory, Seldon has discovered the declining nature of the Empire, angering the aristocratic rulers of the Empire. The rulers consider Seldon’s views and statements treasonous, and he is arrested. Seldon is tried by the state and defends his beliefs, explaining his theory the Empire will collapse in 300 years and enter a 30,000-year dark age.

    He informs the rulers an alternative to this future is attainable, and explains to them generating an anthology of all human knowledge, the Encyclopedia Galactica, would not avert the inevitable fall of the Empire but would reduce the Dark Age to “only” 1,000 years.

    The fearful state apparatchiks offer him exile to a remote world, Terminus, with other academic intellectuals who could help him create the Encyclopedia. He accepts their offer, and sets in motion his plan to set up two Foundations, one at either end of the galaxy, to preserve the accumulated knowledge of humanity and thereby shorten the Dark Age, once the Empire collapses. Seldon created the Foundation, knowing it would eventually be seen as a threat to rulers of the Empire, provoking an eventual attack. That is why he created a Second Foundation, unknown to the ruling class.

    Asimov’s psychohistory concept, based on the predictability of human actions in large numbers, has similarities to Strauss & Howe’s generational theory. His theory didn’t pretend to predict the actions of individuals, but formulated definite laws developed by mathematical analysis to predict the mass action of human groups. His novel explores the centuries old debate of whether human history proceeds in a predictable fashion, with individuals incapable of changing its course, or whether individuals can alter its progression.

    The cyclical nature of history, driven by generational cohorts numbering tens of millions, has been documented over centuries by Strauss & Howe in their 1997 opus The Fourth Turning. Human beings in large numbers react in a herd-like predictable manner. I know that is disappointing to all the linear thinking individualists who erroneously believe one person can change the world and course of history.

    The cyclical crisis’s that occur every eighty years matches up with how every Foundation story centers on what is called a Seldon crisis, the conjunction of seemingly insoluble external and internal difficulties. The crises were all predicted by Seldon, who appears near the end of each story as a hologram to confirm the Foundation has traversed the latest one correctly.

    The “Seldon Crises” take on two forms. Either events unfold in such a way there is only one clear path to take, or the forces of history conspire to determine the outcome. But, the common feature is free will doesn’t matter. The heroes and adversaries believe their choices will make a difference when, in fact, the future is already written. This is a controversial viewpoint which angers many people because they feel it robs them of their individuality.

    Most people don’t want to be lumped together in an amalgamation of other humans because they believe admitting so would strip them of their sense of free will. Their delicate sensibilities are bruised by the unequivocal fact their individual actions are virtually meaningless to the direction of history. But, the madness of crowds can dramatically impact antiquity.

    “In reading The History of Nations, we find that, like individuals, they have their whims and their peculiarities, their seasons of excitement and recklessness, when they care not what they do. We find that whole communities suddenly fix their minds upon one object and go mad in its pursuit; that millions of people become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first.”Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

    Many people argue the dynamic advancements in technology and science have changed the world in such a way to alter human nature in a positive way, thereby resulting in humans acting in a more rational manner. This alteration would result in a level of human progress not experienced previously. The falsity of this technological theory is borne out by the continuation of war, government corruption, greed, belief in economic fallacies, civic decay, cultural degradation, and global disorder sweeping across the world. Humanity is incapable of change. The same weaknesses and self- destructive traits which have plagued them throughout history are as prevalent today as they ever were.

    Asimov’s solution to the failure of humanity to change was to create an academic oriented benevolent ruling class who could save the human race from destroying itself. He seems to have been well before his time with regards to creating Shadow Governments and Deep State functionaries. It appears he agreed with his contemporary Edward Bernays. The masses could not be trusted to make good decisions, so they needed more intellectually advanced men to guide their actions.

    “The conscious and intelligent manipulation of the organized habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are molded, our tastes formed, our ideas suggested, largely by men we have never heard of. This is a logical result of the way in which our democratic society is organized.

    Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. …In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons…who understand the mental processes and social patterns of the masses. It is they who pull the wires which control the public mind.”Edward Bernays – Propaganda   

    In Part Two of this article I will compare and contrast Donald Trump’s rise to power to the rise of The Mule in Asimov’s masterpiece. Unusually gifted individuals come along once in a lifetime to disrupt the plans of the existing social order.

  • Trump Asks Why Intelligence Committee Isn't Probing The Clintons

    Following a day of drama involving the Chair of the House Intelligence Committee, Devin Nunes, who has been under constant onslaught by Democrats ever since his disclosure last week that Trump had indeed been the object of surveillance, and whose Democrat peer at the Intel panel, Adam Schiff, on Monday night called for Nunes to recuse himself, moments ago Trump waded into the news cycle when he asked on Twitter why the House Intelligence Committee is not investigating the Clintons for various ties of their own to Russia. He then slammed the ongoing anti-Russian witch hunt, saying “the Russia story is a hoax.”

    “Why isn’t the House Intelligence Committee looking into the Bill & Hillary deal that allowed big Uranium to go to Russia, Russian speech, money to Bill, the Hillary Russian ‘reset,’ praise of Russia by Hillary, or Podesta Russian Company. Trump Russia story is a hoax. #MAGA!” Trump wrote in two tweets Monday night.

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    Trump’s rhetorical questions come amid a news cycle which as discussed on various occasions today has focused on the Republican chair of the Intel Committee, Nunes, who is under fire for briefing Trump about classified material he reviewed last week without sharing the information with committee Democrats. On Monday it was revealed that Nunes had secretly visited the White House grounds one day before announcing incidental surveillance of President Trump’s transition team. His visit raised questions about whether the White House could have been was the source of the intelligence Nunes reviewed.

    Democratic lawmakers have now called on Nunes to recuse himself from the committee’s probe into Russia’s interference in the United States presidential election. Nunes on Monday evening said the chairman would not step aside from the investigation.

    The republican lawmaker has claimed that his findings had no relevance to the Russia probe, even as the committee examines the unmasking and leaking of surveillance information as part of that investigation.

    * * *

    In a follow up tweet, Trump took another stab at the House Freedom Caucus, who he said snatched “defeat from the jaws of victory” – following Friday’s failure to repeal and replace plan for ObamaCare.  That followed a Sunday tweet in which he said the conservative House Freedom Caucus, along with the Club for Growth and Heritage Action for America, had “saved” Planned Parenthood and ObamaCare.

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    Finally, Trump brought it full circle, touching on Friday’s failure to repeal Obamacare, saying “the Democrats will make a deal with me on healthcare as soon as ObamaCare folds – not long. Do not worry, we are in very  good shape!

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  • The Next Clash Emerges: Trump-Ryan Deeply Divided Over Tax 'Cuts'

    After failing to achieve Republican agreement over healthcare reform, The Washington Post reports that while President Trump and House Speaker Paul D. Ryan both want to rewrite the tax code, they are deeply divided over how much tax relief to give the middle class.

    As WaPo details, Trump proposed a plan that would have reduced taxes drastically, especially for the wealthy but also for the poor and working class. Meanwhile, Ryan and his colleagues put together a plan that was equally generous to the rich but that would give poor and middle-class taxpayers less of a break. The speaker's plan would even have increased taxes on some in the upper middle class. The richest 0.1 percent of households would receive similar benefits from both politicians: an average of $1.4 million per household a year under Ryan's plan and $1.5 million annually under Trump's plan.

    After a decade, 99.6 percent of the tax relief Ryan proposed would have accrued to the wealthiest 1 percent of the country. In Trump's plan, 50.8 percent of the relief would have gone to that group, according to analyses by the nonpartisan Tax Policy Center. Most notably given the divisions within the Republican Party (i.e. fiscal conservatives rejection of the healthcare reform bill), Trump's plan would be extremely costly for the government, reflecting his conservative populist comments in the past that suggest he would be willing to put the federal government deeper into debt to fund breaks for the middle class.

    Ryan's plan would instead simplify and streamline the tax code in accordance with conservative orthodoxy, eliminating the goodies for households with modest incomes that Trump would preserve or expand.

    It's not all bad though as the two tax plans have important features in common, as WaPo's Max Ehrenfreund reports,

    In terms of taxes on the rich, both plans would reduce the marginal rate paid by the wealthiest taxpayers on individual income from 39.6 percent to 33 percent.

     

    The two plans would repeal some of the taxes that Obamacare imposed on the rich, and both plans also repeal the estate tax, which rich families pay when one of their members dies. Repealing the tax would return $300 billion or so to those families over a decade, according to the center, depending on the details of the plan.

     

    Meanwhile, both plans would increase the amount that many families can earn without paying taxes.

    The biggest reason for the discrepancy in the effects of the plans on the middle class is how Ryan's proposal would affect imports and exports.

    The plan includes a complex and controversial provision known as a "border adjustment", which some economists think would increase prices for goods and services imported from overseas.

     

    Eric Toder, an economist at the Tax Policy Center, said the group's initial analysis of this aspect of the plan treated it as a kind of tax on households' purchases, but many experts believe that Ryan's proposal would not have that effect over the long term.

     

    Ryan's plan would be better for the middle class on that more optimistic assumption. “When we do it that way, there actually is a bit of a cut for the middle class,” Toder said.

    So get ready America, it will be hard for Trump to temper his on-again, off-again support for Speaker Ryan if this division grows – and ironically, Trump may find more support from the other side of the aisle for his 'middle-class tax cuts' as the GOP splinters further.

  • Thousands Of Americans Are Fleeing The Big Cities

    Authored by Michael Snyder via The Economic Collapse blog,

    Why are so many people suddenly moving away from major U.S. cities?  Recently, I wrote about the mass exodus that is happening out of the state of California, but the truth is that what is happening there is just part of a national phenomenon.  The populations of some of our largest cities are steadily shrinking, and many experts are completely mystified by the seismic demographic shifts that we are now witnessing.  Of course there are a whole host of reasons why people would want to move away from huge cities such as Chicago, Detroit, Baltimore and Cleveland.  For some families, it simply comes down to wanting a better life for their children.  But as you will see below, there are others that believe that things in this country are about to take an apocalyptic turn, and the big cities will not be a place that you want to be when economic collapse, rioting, looting, civil unrest and crime are all spiraling out of control.

    According to data just released by the U.S. Census Bureau, Chicago took the prize for the biggest population loss from 2015 to 2016, and it was followed by Detroit and Baltimore

    The counties containing Chicago, Detroit and the independent city of Baltimore were the biggest population losers in the United States from 2015 to 2016, according to data released today by the Census Bureau.

     

    Cook County, Ill., where Chicago is the county seat, had the largest population loss of any county in the country from 2015 and 2016.

    Cook County alone had a “domestic migration” loss of more than 66,000 people.  That is a staggering number of people to lose in a single year.

    Cleveland and Milwaukee were also very high on the list, and some are pointing out that all of these cities are in relatively colder climates and are all struggling economically.

    So you certainly can’t blame people living in these cities for wanting to find somewhere warmer and more economically prosperous to live.

    But others that are moving away from large cities are deeply concerned about where things are ultimately headed in this country.  It doesn’t take a genius to see that anger, frustration and hatred are rising all around us, and many believe that conditions are ripe for civil unrest and civil conflict.  In fact, best-selling author Doug Casey believes that we could soon see a “civil war” that is set off by a “financial collapse”…

    Best-selling author Doug Casey wrote “Crisis Investing” at the time when the U.S. political landscape was transitioning from the Carter Administration to the Reagan Administration. Now, Casey sees a coming crisis that is equal or worse than the Civil War.  Casey explains, “In the U.S. right now, there seems to be so much antagonism it’s almost like pre-Civil War.  There is actually hatred in the U.S. at this point.  It used to be the Republicans and Democrats could disagree, but they could have a civil conversation about a difference of opinion.  Now, it’s active hatred between these two groups.  This is not going to end well.”

     

    Casey thinks the coming financial collapse will be the trigger. Casey says, “It’s going to come down eventually.  I am worried about that, but we are in a situation where the country seem like it is just before a civil war.  It will be more serious than just a financial collapse, and it is likely to be set off by a financial collapse.”

    Without a doubt, our financial system is certainly primed for a financial collapse, and when things get really, really bad in this country how will people respond?

    Many have decided that they want to get away from the major population centers before we find out the answer to that question.

    For example, not too long ago the Chicago Tribune ran a story about why so many preppers are moving to the Great Northwest.  One of the individuals profiled was an ex-resident of California named Trevor Treller who moved up to north Idaho prior to the recent election…

    Trevor Treller, 44, who carries a small Smith & Wesson pistol on his hip, moved to north Idaho last year from Long Beach, California, and recently paid a little less than $400,000 for a defensible three-bedroom house on five wooded acres.

     

    Treller, a sommelier at a local resort, said Obama was a key factor in his decision. He said the president has inflamed racial tensions in America, presided over a dangerous expansion of the national debt, been “hostile” to Second Amendment rights and failed to curtail the nuclear ambitions of North Korea and Iran.

     

    Treller said any one of those factors could lead to crippling chaos, so he and his wife have laid in food, weapons and ammunition and are installing an iron gate across their long gravel driveway.Of course it isn’t just ordinary Americans such as Treller that are deeply concerned about what is coming.

    Less than a week ago, CNN ran an article entitled “Billionaire bunkers: How the 1% are preparing for the apocalypse“…

    Many of the world’s elite, including hedge fund managers, sports stars and tech executives (Bill Gates is rumored to have bunkers at all his properties) have chosen to design their own secret shelters to house their families and staff.

     

    Gary Lynch, general manager of Texas-based Rising S Company, says 2016 sales for their custom high-end underground bunkers grew 700% compared to 2015, while overall sales have grown 300% since the November US presidential election alone.

    So why are Bill Gates and his billionaire friends so interested in buying luxury survival bunkers if everything is going to be just fine?

    Can someone explain that one to me?

    Everywhere you look, retail stores are closing and economic warning signs are flashing red, but those that sell survival bunkers to the elite are making tremendous amounts of money.

    And I certainly wish that I could afford one of these survival bunkers, because they sound quite appealing

    One of those shelters, Vivos xPoint, is near the Black Hills of South Dakota, and consists of 575 military bunkers that served as an Army Munitions Depot until 1967.

     

    Presently being converted into a facility that will accommodate about 5,000 people, the interiors of each bunker are outfitted by the owners at a cost of between $25,000 to $200,000 each. The price depends on whether they want a minimalist space or a home with high-end finishes.

     

    The compound itself will be equipped with all the comforts of a small town, including a community theater, classrooms, hydroponic gardens, a medical clinic, a spa and a gym.

    These elitists plan to ride out the coming American apocalypse in style while the world above them is literally going insane.

    Meanwhile, most of the general population continues to be completely oblivious to what is about to happen to them, and so the events that are coming will close upon them suddenly like a trap and there will be no escape.

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Today’s News 27th March 2017

  • Trump Handed Merkel $375 Billion Invoice For NATO Defenses During Recent Visit

    A couple of weeks ago we wrote several notes about German Chancellor Angela Merkel’s painfully awkward visit to the White House.  After meeting in private, the pair sat down in the oval office for a brief press conference where you could cut the tension with a knife.  At one point someone from the media asked for a handshake but the request was promptly ignored.

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    Now, a couple of weeks later, we learn what may have prompted some of the tension in the room between Merkel and Trump that day.  According to a new report from The Times of London today, Trump apparently took advantage of Merkel’s visit to Washington D.C. to pass her a $375 billion invoice for ‘overdue’ NATO defense expenses.  Per The Hill, Merkel largely ignored the invoice though it certainly seems to have accomplished it’s goal of ruffling some feathers.

    “The concept behind putting out such demands is to intimidate the other side, but the chancellor took it calmly and will not respond to such provocations,” a German minister told the newspaper.

     

    Trump during his presidential campaign railed against the NATO alliance and has called for member countries to increase defense spending to support the organization.

     

    Merkel “ignored the provocation,” the Times said.

    As reported, the invoice was based on a 2014 pledge from NATO countries to spend 2% of their GDP on national defense.  As such, Trump allegedly instructed aides to calculate how much German spending fell below that 2% target for the past 12 years, added interest and created an invoice which he hand delivered.

    Meanwhile, with the benefit of this new information, Trump’s tweets from March 18th, after his meetings with Merkel, take on all new meaning.

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    And while Merkel has largely ignored the invoice, other German ministers have decided upon more aggressive responses.  Per the Independent:

    In response to the claims, German defence minister Ursula Von der Leyen rejected the notion the European nation owed the US or Nato.

     

    She issued a statement saying: “There is no debt account at Nato

     

    “Defence spending also goes into UN peacekeeping missions, into our European missions and into our contribution to the fight against [Isis] terrorism.”

     

    Her comments were backed by Ivo Daalder, permanent representative to Nato from 2009 to 2013 under the Obama administration, who queried the President’s understanding of the organisation.

     

    He tweeted: “Sorry Mr President, that’s not how Nato works. The US decides for itself how much it contributes to defending Nato.

     

    “This is not a financial transaction, where Nato countries pay the US to defend them. It is part of our treaty commitment.”

    Never a dull moment in the Trump White House.

  • Are America And China Destined For War?

    Authored by Harry Kazianis via The Stratgeic Culture Foundation,

    In his recent book The Improbable War, professor Christopher Coker explains that it is “of vital importance that the possibility of a conflict between China and the United States continues to be discussed.” Coker’s rationale for this is simple: “If the United States and China continue to convince themselves that war is too ‘improbable’ to take seriously, it is not they but the rest of the world that may ultimately pay the price.”

    It would seem the good professor’s wish is about to be granted. We are about to be treated to what surely will be a media blitz over what can only be described as the most comprehensive book to ever tackle the question of not only whether a US-China war is possible, but what steps Washington and Beijing can take to avoid such a calamity.

    Written by one of the world’s most prominent political scientists and strategic thinkers of the day, director of Harvard University’s Belfer Center, Graham Allison, anyone who has been following China in recent years likely guessed such an effort was in the works. The book is hooked on Allison’s popular “Thucydides Trap” concept. The trap, as Allison described in a prominent piece for the Atlantic in 2015, is “the attendant dangers when a rising power rivals a ruling power — as Athens challenged Sparta in ancient Greece, or as Germany did Britain a century ago.” Allison goes on to warn that in 12 of 16 cases he has studied throughout history, when such a situation takes place, war has been the result.

    US and China: A relationship in dangerous flux

    So what happens in case study number 17? Knowing the odds history has given us, is war between China and America unstoppable?

    To answer such questions, we first need to understand the complexity that is the US-China relationship. In fact, there are two US-China relationships.

    The first, is the economic relationship. At least until the election of Donald Trump, many scholars and Asia hands would argue that both sides prospered from their deep economic ties. US-China bilateral trade in goods and services has skyrocketed since the two nation’s opened their doors to each other in 1971 and is now more than US$600 billion per year. Trade between both Washington and Beijing has made both countries wealthier with millions of jobs created on both sides of the Pacific.

     

    The second part is the strategic relationship — something that was bound to become strained after the collapse of the Soviet Union, the real threat that brought America and China together. Without a common foe, tensions on both sides have begun to grow. Washington and Beijing now face off in various parts of the Asia-Pacific with no letup in sight.

    Such an odd, dual-sided relationship, filled with equal promise and peril, made sense for decades. When times got tough — look no further than the 1995-1996 Taiwan Crisis, the 1999 Chinese Embassy bombing, the 2001 EP-3 Crisis and many other smaller incidents — the dangers of severing the economic relationship always seemed to smooth out any talk of a rupture. But with Trump and advisers such as Death by China author Peter Navarro calling into question the economic benefits of trade with Beijing, the one thing that always seemed to anchor relations in times of trouble seems to be at an end.

    Why Destined for War is a must read:

    To be fair, there are many great articles, long-form pieces and books that detail the dangers of a US-China military clash and how to avoid it. So why read this one?

    I offer three reasons: Comprehensiveness, readability and telling hard truths most Asia experts here in Washington won’t want to hear.

    In the interests of full disclosure, I have published Allison’s works on many occasions as Executive Editor of the National Interest, but Allison’s efforts in Destined for War will surely be praised, and for good reasons.

    Any Asia hand will quickly be floored by the level of detail and research the manuscript includes. With a grounding in history, Allison takes his readers on a journey through many similar cases in the past where a rising nation challenged a status-quo power, detailing where things went wrong, and, in some instances, how war was avoided. This is all done in a style that makes the book a real page turner, written in a prose that is easy to understand, never getting bogged down in often pointless jargon, tables, graphs or pie-charts. Allison’s ideas flow easily, no matter how frightening they are.

    But some will likely have a problem with some of what the work offers. For example, he compares Xi Jinping and Donald Trump as two men who have similar goals: to make their nations great again. At the same time, Allison boldly, and quite correctly, couches China’s quest for primacy in Asia as something like what the United States did when it rose to power almost a century ago. While clearly stating that China has not acted as aggressively as America did in the past, especially back around the turn of century during the time of President Theodore Roosevelt, Allison skillfully hints at what could occur if China were to take such a step — and embark on a real path to war.

    Reasons for hope:

    While I don’t want to offer any spoilers, Allison offers four key ways to mitigate the possibility of conflict. One of my favorites, clarifying vital interests, is worth spoiling. What are America’s vital interests in the Asia-Pacific region? What are we willing to fight for? What are we willing to die for? And, perhaps, most importantly, what are we not willing to fight for? To this day, I would challenge any past Obama administration official to be able to explain that with clarity — they likely can’t, beyond mentioning the word pivot or rebalance — terms that are rightly relegated to the past. The Trump administration will need to take up this challenge fast, considering Xi and Obama have a big summit set for early next month.

    While many will sing the praises of Allison’s work, there is a much simpler reason why the good professor’s effort should be commended: it stands to reason a flood of op-eds, blogs, editorials and podcasts will flood the media as this books nears its release. We are finally about to have a real public debate about the very distinct possibility of a war between the US and China — and that itself might be the real accomplishment.

  • Putting Pennies in the Fusebox, Report 26 Mar, 2017

    Back in the old days, homes had fuse boxes. Today, of course, any new house is built with a circuit breaker panel and many older homes have been upgraded at one time or another. However, the fuse is a much more interesting analogy for the monetary system.

    When a fuse burned out, it was protecting you from the risk of a house fire. Each circuit is designed for only so much current. The problem is that higher current causes more heat, and it can start a fire. So they put fuses in, which burn out before the wire gets hot enough to be dangerous.

    The problem is that it’s annoying when a fuse burns out, especially when it’s the last one and the hardware store is far away and/or closed for the weekend. So people all too often put a penny in the place of the fuse. And then, human nature being what it is, they left it there long-term. As an aside, pennies in those days were solid copper, not the copper plated zinc they use today because it’s cheaper.

    We would guess that a disproportionate number of house fires were started because an overloaded circuit became overheated, and the protective fuse was replaced with a penny that would keep the juice flowing no matter what.

    So, what has that got to do with gold and silver? A penny in the fuse box is a perfect analogy for what President Roosevelt did in 1933. Many believe when he confiscated gold, it was to grab the loot. While we have no doubt that he and his cronies lusted for the gold of the people, he had a more serious purpose.

    Until 1933, gold was the core monetary asset in the banking system. When people withdrew their gold coin—redeeming their gold, not buying gold—that forced the bank to sell a bond to raise the gold to redeem depositors. If a bank could not raise enough gold, perhaps because bond prices were going down, then the bank was bankrupt. Another problem is that falling bond prices mean rising interest rates.

    Roosevelt was trying to stop the run on the banks, and trying to push interest rates down.

    He did stop the run, and interest continued to fall through the end of World War II. However, his act was the monetary equivalent of the penny in the fuse box. In making it illegal to own gold, he made the dollar irredeemable for Americans. Gold is the only financial asset that is not someone else’s liability. Deprived of this outlet, people were forced to be a creditor. The only choice was to lend to the Federal Reserve, the US Treasury, a commercial bank, a corporation, etc.

    When people are running to the bank to withdraw their gold coin, it’s like a fuse burning out. You really should find out the root cause when a fuse keeps burning out, and not just jam a solid copper conductor into the circuit. You really should find out why people keep pulling money (i.e. gold) out of the banks, and not just outlaw it.

    The reasons were simple. The rate of interest was below the marginal time preference of the savers. This is, of course, the purpose for which any central bank is established: to enable the government and its cronies to borrow more cheaply. And the banks had become unsound (due in no small part to the actions of the Fed taken prior to 1933).

    By corralling everyone in the banking system, FDR put a penny in the monetary fusebox. In 1971, President Nixon realized there was one last fuse that could still burn out and thereby signal that all was not well. Americans could not withdraw gold, but foreign governments could. And, led by France, they were doing. So Nixon “closed the gold window”, thereby inserting a second penny.

    Now the system was perfect—perfectly irredeemable. Money is credit and credit is money and there is no longer a way for the market to express concerns about either interest rates or soundness. An individual can escape being a creditor if he buys gold (legalized in 1975, after gold was entirely demonetized), but his dollars simply trade hands. The seller of the gold gets the credit-dollars, and the buyer gives them up for the gold. There is zero effect on the banking system (other than causing the price of the dollar to go down).

    Unlike the simple and elegant mechanism of the bank run in the gold standard, buying gold is awkward, clunky, and risky for the participants. With dollar-credit no longer being tied to gold, there is a price risk. And of course, price is the motivator for many participants.

    Two people, call them Joe and Mary, could both be right that the dollar-credit system is headed towards a crisis. Joe bought at $1,060 in the last week of 2015. Unfortunately, Mary bought at $1,375 in July of 2016. Both bought because of the same reason. But Joe has a big fat gain of $183 and Mary has a loss of $132. This volatility makes people alternatively greedy and fearful, which is not really providing a good signal that the monetary system has problems urgently in need of addressing.

    And so the system goes, careening around, from crisis to crisis and nothing gets fixed and there is no signal that is clear to everyone the way a run on the banks is clear.

    With this backdrop, we note that the price of gold is on the rise again. Since its low around $1,120 late last year, it has been rising to its current price about $120 above that. What’s more, the fundamentals have been getting stronger at the same time. What could be causing this, and now?

    Rising interest rates (which we believe is just a correction in the long falling rates trend) are putting more and more stress on banks and corporations alike. If you have borrowed short to lend long (as all banks do nowadays, this is called “maturity transformation”) then rising rates cause immediate pain. Your cost of funding goes up instantly. However, the interest you earn on long-term bonds does not go up. Instead, the market price of those bonds drops. Equity is disappearing from your balance sheet.

    Now consider major corporations, who too often borrowed in the short term bond markets. Their cost of funding is rising. Nearly every carmaker now offers 0% financing to qualified buyers. Their cost to offer this is now obviously much higher than it was a year or two ago. And that does not even count if they had used short-term borrowing to finance those loans, in which case their existing book is bleeding cash too.

    This same pressure is occurring anywhere a vendor is financing its customers. The vendor can always try to pass through the increased cost. However, if buying volume was anemic previously with lower interest cost, it will only get worse when this cost goes up.

    In the housing market, most people are monthly payment buyers. A higher interest rate means a lower price to get the same payment.

    And what happens to lower credit corporations who issue junk bonds? Like most corporations they have to roll over their bonds when mature. So far, rising rates has passed over this market and junk bonds have held up. However, should this tide turn, many of these companies will be forced to default under a deluge of rising interest expense, if not softer demand for their products. They are junk credits for a reason, and higher rates can be the final straw.

    Or let’s look at the pension funds. They are already badly underfunded. That is, they are already destined to arrive at terra firma. Many have bought equities and real estate in an attempt to juice up their returns. What happens if the prices of those assets comes down significantly?

    Finally, let’s look at municipalities. They derive revenue from home building and turnover of not only homes but home furnishings, remodeling, etc. If these markets slow down significantly, their ability to service their debts is going to be taxed to the limits and beyond.

    No wonder people are buying gold. Fundamental demand, as opposed to speculative, is when people buy gold coins and bars, presumably not to bring back to the market soon.

    Below, we will show the only true picture of the gold and silver supply and demand. But first, the price and ratio charts.

    The Prices of Gold and Silver
    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 moved down this week.

    The Ratio of the Gold Price to the Silver Price
    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 Gold Basis and Cobasis and the Dollar Price

    The price of the dollar fell another 0.3 milligrams gold (this is the inverse of the rising price of gold, measured in dollars, +$14). However, this week, the cobasis (our measure of scarcity) decreased a bit. Gold buying this week was biased towards speculation. Last week, we said fundamental buying was a trend but it’s “sputtering”. This is an example.

    Our calculated fundamental price of gold is up $3, or still about $160 over the market price.

    Now let’s look at silver.

    The Silver Basis and Cobasis and the Dollar Price
    The Silver Basis and Cobasis and the Dollar Price

    The story is the same in silver. The price rose, a bit more than the price of gold did. With the rising price, we see decreasing scarcity this week.

    Our calculated silver fundamental price rose 4 cents, now about $0.85 over the market price.

    We leave on a question today. When interest returns to gold and silver, which metal will have the higher rate? We plan to publish something about this soon.

    © 2017 Monetary Metals

  • RBC Emergency Market Update: "Big Trouble For Consensus Trades"

    Markets may not be turmoiling yet, but as per this “emergency” Sunday night “hot take” from RBC’s cross-asset head Charlie McElligott notes, things are certainly starting to break.

    SPECIAL EDITION RBC Big Picture: BIG TROUBLE FOR CONSENSUS ‘REFLATION’ TRADES AS ‘FISCAL POLICY’ FEARS CONFIRMED
     
    #HOTTAKE: ‘Risk-off’ in a sloppy Asian opening to start the week (ES1 -18 handles, $/Y -100pips to 110.34, UST 10Y ylds at 2.36), as markets digest the scope and viability of the US ‘fiscal policy’ narrative going-forward off the tremors of Friday’s failed healthcare repeal vote. 

    Reflation” themes were already staggering in recent weeks off-the-back of the recent the crude oil sell-off (and the implications for weakened ‘inflation expectations’)—but to now see the longer-term ‘US fiscal policy upside kicker’ looking especially threatened, it is likely that the ‘big three’ trade expressions (longs in US Dollar US Banks and shorts in US Rates) are looking very exposed for an acceleration of recent drawdowns (in conjunction with longs in HY, ‘cyclicals / defensives’ L/S pairs, equities ‘value’ factor, equities high beta, US equities small cap).

    Long Dollar’ trades are currently seen unwinding ‘real-time’ as ‘the world’s most crowded trade’ and ‘reflation’ proxy earlier this evening broke the convergence of both its 200dma and the 76.4% Fibo Retracement of the entire Dollar move since the US election—exposing significant downside.  Legacy shorts held against the US Dollar in Euro (making 2017 highs vs USD), Yen (making 2017 highs vs USD), Pound and Canadian Dollar are being painfully squeezed as traders are liquidating after ‘processing’ the implications of the Trump Administration’s failed ACA repeal Friday, with many ‘late-comers’ to these trades significantly ‘under water’ already and looking to ‘tap out’ on losers.  Tactical funds and discretionary macro were already pivoting ‘short USD’ last week on the new “policy CONVERGENCE” dynamic, and now with momentum having clearly pivoted in the other direction, one would expect systematic / trend / CTA to be heavily-involved now as well on the short-side of USD trades.

    The story that we were getting Friday from some buyside traders and sellside strategists (by-and-large) was that a “no” vote was almost irrelevant to risk-assets, as market participants want the US Administration to ‘move on’ and ‘focus its efforts’ on tax policy anyhow (versus being mired in further debate with the ‘repeal and replace’ of the ACA).  What many were missing here though (and noted by Mark Orsley Friday afternoon) is that the sequencing of ‘healthcare’ and ‘budget’ before ‘taxes’ was intentional and critical, as spending cuts from a repeal of the ACA were effectively a ‘requirement’ against the pending new administration’s tax-plan which will only further increase the deficit.  This is obviously an impediment then to efforts to keep any new tax plan ‘deficit neutral,’ so essentially, the GOP is starting in a bigger hole, some say to the tune of $1T dollars….and this of course is not including the extremely controversial BAT component, which too has lost much momentum over the past two months, despite projections that it could provide upwards of $1T of revenues over a 10 year period in order to fund the individual and corporate tax cut proposals (ironically, the same ‘Freedom Caucus’ of GOP’ers which symbolically defeated the ‘new’ healthcare plan on Friday are also against the BAT…yikes).

    What does it all mean?  Some of the talk emanating from DC policy-circles is now of the view that this now means an almost certainty of a ‘watered down’ tax plan, which instead of deep ‘headline’ cuts planned will now feature much more modest cuts (corporates as priority over individuals) and focus on “streamlining” tax code / loopholes.  This is not the ‘joy’ that many of those 2500 S&P targets ‘signed-up’ for.

    What is at risk?  I noted many of the ‘consensual longs’ which have already showed significant signs of being de-grossed in recent weeks.  But as we now see a high likelihood of the potential for a rates reversal to accelerate and long duration’ rallies in the face of the ‘rates short’ crowd, there will be major implications within equities too, as ‘low vol’ defensives (REITS / Utes / Staples / Telcos) and ‘anti-beta’ market neutral strategies are certain to see further escalation of their recent strength.  The good news for equities-longs  is that ‘secular growers’ like tech, consumer discretionary and biotech is too likely to benefit from money rotating out of ‘deep cyclicals’and ‘value.’  

    Stay tuned…
     
     

  • Trump "Endorses" Jeanine Pirro's Call For Paul Ryan To Step Down

    Fox News host Judge Jeanine Pirro, whose show President Trump urged his followers on Twitter to watch earlier in the day, opened her program at 9pm on Saturday by calling for Speaker Paul Ryan’s resignation.

    “Ryan needs to step down as Speaker of the House. The reason, he failed to deliver the votes on his healthcare bill, the one trumpeted to repeal and replace ObamaCare, the one that he had 7 years to work on; the one he hid under lock and key in the basement of Congress; the one that had to be pulled to prevent the embarrassment of not having enough votes to pass.” Pirro said in her opening statement.

    “Speaker Ryan, you come in with all your swagger and experience and sell them a bill of goods which ends up a complete and total failure and you allow our president, in his first 100 days, to come out of the box like that, based on what?” Pirro said.

    What made Pirro’s fiery comments about Ryan especially notable is that they came hours after Trump tweeted to encourage his followers to watch “Justice with Judge Jeanine.”

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    While Trump has urged people to watch TV shows in the past, typically it was when the president himself was appearing on them. However in a twist, Pirro suggested that she had not coordinated her statement with Trump in advance.

    “I have not spoken with the president about any of this,” Pirro said of her call for Ryan to step down on her show, where president’s counter-terrorism adviser Sebastian Gorka also appeared on Saturday evening.

    On Friday Trump told Ryan to pull the Republican healthcare bill, upon learning there were not enough votes in support among House Republicans. The move marked Trump’s first legislative defeat as president and followed seven years of rhetoric from Republicans who campaigned on a pledge to repeal and replace former President Barack Obama’s signature healthcare law.

    In the initial round of fingerpointing, Trump blamed Democrats for not backing the GOP healthcare bill, warning that Obamacare would “explode” on its own, and signaled that he would move on to other priorities such as tax reform. On Saturday, the NYT reported that the blame among Trump’s closest circles had fallen on Reince Priebus and Health and Human Services Secretary Tom Price, while Ryan was spared Trump’s anger. Trump and White House press secretary Sean Spicer also indicated that they appreciated Ryan’s effort to get the bill passed, amid criticism from some Trump allies over the failed effort.

    Following the Pirro statement, the blame now appears to have shifted back to Ryan, as Bloomberg originally reported on Friday.

    Pirro insisted in her first segment that the failure was on Ryan and not on Trump. “Folks, I want to be clear. This is not on President Trump,” she said. “No one expected a businessman to completely understand the nuances, the complicated ins and outs of Washington and its legislative process. How would he know on what individuals he could rely?”

    “Ryan has hurt you going forward, and he’s got to go,” Pirro said.

  • Michael Hudson: Trump Is Obama's Legacy – Is This The End Of The Democratic Party?

    Authored by Michael Hudson via NakedCapitalism.com,

    Nobody yet can tell whether Donald Trump is an agent of change with a specific policy in mind, or merely a catalyst heralding an as yet undetermined turning point. His first month in the White House saw him melting into the Republican mélange of corporate lobbyists. Having promised to create jobs, his “America First” policy looks more like “Wall Street First.” His cabinet of billionaires promoting corporate tax cuts, deregulation and dismantling Dodd-Frank bank reform repeats the Junk Economics promise that giving more tax breaks to the richest One Percent may lead them to use their windfall to invest in creating more jobs. What they usually do, of course, is simply buy more property and assets already in place.

    One of the first reactions to Trump’s election victory was for stocks of the most crooked financial institutions to soar, hoping for a deregulatory scythe taken to the public sector. Navient, the Department of Education’s knee-breaker on student loan collections accused by the Consumer Financial Protection Bureau (CFPB) of massive fraud and overcharging, rose from $13 to $18 now that it seemed likely that the incoming Republicans would disable the CFPB and shine a green light for financial fraud.

    Foreclosure king Stephen Mnuchin of IndyMac/OneWest (and formerly of Goldman Sachs for 17 years; later a George Soros partner) is now Treasury Secretary – and Trump is pledged to abolish the CFPB, on the specious logic that letting fraudsters manage pension savings and other investments will give consumers and savers “broader choice,” e.g., for the financial equivalent of junk food. Secretary of Education Betsy DeVos hopes to privatize public education into for-profit (and de-unionized) charter schools, breaking the teachers’ unions. This may position Trump to become the Transformational President that neoliberals have been waiting for.

    But not the neocons. His election rhetoric promised to reverse traditional U.S. interventionist policy abroad. Making an anti-war left run around the Democrats, he promised to stop backing ISIS/Al Nusra (President Obama’s “moderate” terrorists supplied with the arms and money that Hillary looted from Libya), and to reverse the Obama-Clinton administration’s New Cold War with Russia. But the neocon coterie at the CIA and State Department are undercutting his proposed rapprochement with Russia by forcing out General Flynn for starters. It seems doubtful that Trump will clean them out.

    Trump has called NATO obsolete, but insists that its members up their spending to the stipulated 2% of GDP — producing a windfall worth tens of billions of dollars for U.S. arms exporters. That is to be the price Europe must pay if it wants to endorse Germany’s and the Baltics’ confrontation with Russia.

    Trump is sufficiently intuitive to proclaim the euro a disaster, and he recommends that Greece leave it. He supports the rising nationalist parties in Britain, France, Italy, Greece and the Netherlands, all of which urge withdrawal from the eurozone – and reconciliation with Russia instead of sanctions. In place of the ill-fated TPP and TTIP, Trump advocates country-by-country trade deals favoring the United States. Toward this end, his designated ambassador to the European Union, Ted Malloch, urges the EU’s breakup. The EU is refusing to accept him as ambassador.

    Will Trump’s Victory Break Up the Democratic Party?

    At the time this volume is going to press, there is no way of knowing how successful these international reversals will be. What is more clear is what Trump’s political impact will have at home. His victory – or more accurately, Hillary’s resounding loss and the way she lost – has encouraged enormous pressure for a realignment of both parties. Regardless of what President Trump may achieve vis-à-vis Europe, his actions as celebrity chaos agent may break up U.S. politics across the political spectrum.

    The Democratic Party has lost its ability to pose as the party of labor and the middle class. Firmly controlled by Wall Street and California billionaires, the Democratic National Committee (DNC) strategy of identity politics encourages any identity except that of wage earners. The candidates backed by the Donor Class have been Blue Dogs pledged to promote Wall Street and neocons urging a New Cold War with Russia.

    They preferred to lose with Hillary than to win behind Bernie Sanders. So Trump’s electoral victory is their legacy as well as Obama’s. Instead of Trump’s victory dispelling that strategy, the Democrats are doubling down. It is as if identity politics is all they have.

    Trying to ride on Barack Obama’s coattails didn’t work. Promising “hope and change,” he won by posing as a transformational president, leading the Democrats to control of the White House, Senate and Congress in 2008. Swept into office by a national reaction against the George Bush’s Oil War in Iraq and the junk-mortgage crisis that left the economy debt-ridden, they had free rein to pass whatever new laws they chose – even a Public Option in health care if they had wanted, or make Wall Street banks absorb the losses from their bad and often fraudulent loans.

    But it turned out that Obama’s role was to prevent the changes that voters hoped to see, and indeed that the economy needed to recover: financial reform, debt writedowns to bring junk mortgages in line with fair market prices, and throwing crooked bankers in jail. Obama rescued the banks, not the economy, and turned over the Justice Department and regulatory agencies to his Wall Street campaign contributors. He did not even pull back from war in the Near East, but extended it to Libya and Syria, blundering into the Ukrainian coup as well.

    Having dashed the hopes of his followers, Obama then praised his chosen successor Hillary Clinton as his “Third Term.” Enjoying this kiss of death, Hillary promised to keep up Obama’s policies.

    The straw that pushed voters over the edge was when she asked voters, “Aren’t you better off today than you were eight years ago?” Who were they going to believe: their eyes, or Hillary? National income statistics showed that only the top 5 percent of the population were better off. All the growth in Gross Domestic Product (GDP) during Obama’s tenure went to them – the Donor Class that had gained control of the Democratic Party leadership. Real incomes have fallen for the remaining 95 percent, whose household budgets have been further eroded by soaring charges for health insurance. (The Democratic leadership in Congress fought tooth and nail to block Dennis Kucinich from introducing his Single Payer proposal.)

    No wonder most of the geographic United States voted for change – except for where the top 5 percent, is concentrated: in New York (Wall Street) and California (Silicon Valley and the military-industrial complex). Making fun of the Obama Administration’s slogan of “hope and change,” Trump characterized Hillary’s policy of continuing the economy’s shrinkage for the 95% as “no hope and no change.”

    Identity Politics as Anti-Labor Politics

    A new term was introduced to the English language: Identity Politics. Its aim is for voters to think of themselves as separatist minorities – women, LGBTQ, Blacks and Hispanics. The Democrats thought they could beat Trump by organizing Women for Wall Street (and a New Cold War), LGBTQ for Wall Street (and a New Cold War), and Blacks and Hispanics for Wall Street (and a New Cold War). Each identity cohort was headed by a billionaire or hedge fund donor.

    The identity that is conspicuously excluded is the working class. Identity politics strips away thinking of one’s interest in terms of having to work for a living. It excludes voter protests against having their monthly paycheck stripped to pay more for health insurance, housing and mortgage charges or education, or better working conditions or consumer protection – not to speak of protecting debtors.

    Identity politics used to be about three major categories: workers and unionization, anti-war protests and civil rights marches against racist Jim Crow laws. These were the three objectives of the many nationwide demonstrations. That ended when these movements got co-opted into the Democratic Party. Their reappearance in Bernie Sanders’ campaign in fact threatens to tear the Democratic coalition apart. As soon as the primaries were over (duly stacked against Sanders), his followers were made to feel unwelcome. Hillary sought Republican support by denouncing Sanders as being as radical as Putin’s Republican leadership.

    In contrast to Sanders’ attempt to convince diverse groups that they had a common denominator in needing jobs with decent pay – and, to achieve that, in opposing Wall Street’s replacing the government as central planner – the Democrats depict every identity constituency as being victimized by every other, setting themselves at each other’s heels. Clinton strategist John Podesta, for instance, encouraged Blacks to accuse Sanders supporters of distracting attention from racism. Pushing a common economic interest between whites, Blacks, Hispanics and LGBTQ always has been the neoliberals’ nightmare. No wonder they tried so hard to stop Bernie Sanders, and are maneuvering to keep his supporters from gaining influence in their party.

    When Trump was inaugurated on Friday, January 20, there was no pro-jobs or anti-war demonstration. That presumably would have attracted pro-Trump supporters in an ecumenical show of force. Instead, the Women’s March on Saturday led even the pro-Democrat New York Times to write a front-page article reporting that white women were complaining that they did not feel welcome in the demonstration. The message to anti-war advocates, students and Bernie supporters was that their economic cause was a distraction.

    The march was typically Democratic in that its ideology did not threaten the Donor Class. As Yves Smith wrote on Naked Capitalism: “the track record of non-issue-oriented marches, no matter how large scale, is poor, and the status of this march as officially sanctioned (blanket media coverage when other marches of hundreds of thousands of people have been minimized, police not tricked out in their usual riot gear) also indicates that the officialdom does not see it as a threat to the status quo.”

    Hillary’s loss was not blamed on her neoliberal support for TPP or her pro-war neocon stance, but on the revelations of the e-mails by her operative Podesta discussing his dirty tricks against Bernie Sanders (claimed to be given to Wikileaks by Russian hackers, not a domestic DNC leaker as Wikileaks claimed) and the FBI investigation of her e-mail abuses at the State Department. Backing her supporters’ attempt to brazen it out, the Democratic Party has doubled down on its identity politics, despite the fact that an estimated 52 percent of white women voted for Trump. After all, women do work for wages. And that also is what Blacks and Hispanics want – in addition to banking that serves their needs, not those of Wall Street, and health care that serves their needs, not those of the health-insurance and pharmaceuticals monopolies.

    Bernie did not choose to run on a third-party ticket. Evidently he feared being accused of throwing the election to Trump. The question is now whether he can remake the Democratic Party as a democratic socialist party, or create a new party if the Donor Class retains its neoliberal control. It seems that he will not make a break until he concludes that a Socialist Party can leave the Democrats as far back in the dust as the Republicans left the Whigs after 1854. He may have underestimated his chance in 2016.

    Trump’s Effect on U.S. Political Party Realignment

    During Trump’s rise to the 2016 Republican nomination it seemed that he was more likely to break up the Republican Party. Its leading candidates and gurus warned that his populist victory in the primaries would tear the party apart. The polls in May and June showed him defeating Hillary Clinton easily (but losing to Bernie Sanders). But Republican leaders worried that he would not support what they believed in: namely, whatever corporate lobbyists put in their hands to enact and privatize.

    The May/June polls showed Trump and Clinton were the country’s two most unpopular presidential candidates. But whereas the Democrats maneuvered Bernie out of the way, the Republican Clown Car was unable to do the same to Trump. In the end they chose to win behind him, expecting to control him. As for the DNC, its Wall Street donors preferred to lose with Hillary than to win with Bernie. They wanted to keep control of their party and continue the bargain they had made with the Republicans: The latter would move further and further to the right, leaving room for Democratic neoliberals and neocons to follow them closely, yet still pose as the “lesser evil.” That “centrism” is the essence of the Clintons’ “triangulation” strategy. It actually has been going on for a half-century. “As Tanzanian President Julius Nyerere quipped in the 1960s, when he was accused by the US of running a one-party state, ‘The United States is also a one-party state but, with typical American extravagance, they have two of them’.”

    By 2017, voters had caught on to this two-step game. But Hillary’s team paid pollsters over $1 billion to tell her (“Mirror, mirror on the wall …”) that she was the most popular of all. It was hubris to imagine that she could convince the 95 Percent of the people who were worse off under Obama to love her as much as her East-West Coast donors did. It was politically unrealistic – and a reflection of her cynicism – to imagine that raising enough money to buy television ads would convince working-class Republicans to vote for her, succumbing to a Stockholm Syndrome by thinking of themselves as part of the 5 Percent who had benefited from Obama’s pro-Wall Street policies.

    Hillary’s election strategy was to make a right-wing run around Trump. While characterizing the working class as white racist “deplorables,” allegedly intolerant of LBGTQ or assertive women, she resurrected the ghost of Joe McCarthy and accused Trump of being “Putin’s poodle” for proposing peace with Russia. Among the most liberal Democrats, Paul Krugman still leads a biweekly charge at The New York Times that President Trump is following Moscow’s orders. Saturday Night Live, Bill Maher and MSNBC produce weekly skits that Trump and General Flynn are Russian puppets. A large proportion of Democrats have bought into the fairy tale that Trump didn’t really win the election, but that Russian hackers manipulated the voting machines. No wonder George Orwell’s 1984 soared to the top of America’s best-seller lists in February 2017 as Donald Trump was taking his oath of office.

    This propaganda paid off on February 13, when neocon public relations succeeded in forcing the resignation of General Flynn, whom Trump had appointed to clean out the neocons at the NSA and CIA. His foreign policy initiative based on rapprochement with Russia and hopes to create a common front against ISIS/Al Nusra seemed to be collapsing.

    Tabula Rasa Celebrity Politics

    U.S. presidential elections no longer are much about policy. Like Obama before him, Trump campaigned as a rasa tabla, a vehicle for everyone to project their hopes and fancies. What has all but disappeared is the past century’s idea of politics as a struggle between labor and capital, democracy vs. oligarchy.

    Who would have expected even half a century ago that American politics would become so post-modern that the idea of class conflict has all but disappeared. Classical economic discourse has been drowned out by their junk economics.

    There is a covert economic program, to be sure, and it is bipartisan. It is to make elections about just which celebrities will introduce neoliberal economic policies with the most convincing patter talk. That is the essence of rasa tabla politics.

    Can the Democrats Lose Again in 2020?

    Trump’s November victory showed that voters found him to be the Lesser Evil, but all that voters really could express was “throw out the bums” and get a new set of lobbyists for the FIRE sector and corporate monopolists. Both candidates represented Goldman Sachs and Wall Street. No wonder voter turnout has continued to plunge.

    Although the Democrats’ Lesser Evil argument lost to the Republicans in 2016, the neoliberals in control of the DNC found the absence of a progressive economic program to less threatening to their interests than the critique of Wall Street and neocon interventionism coming from the Sanders camp. So the Democrat will continue to pose as the Lesser Evil party not really in terms of policy, but simply ad hominum. They will merely repeat Hillary’s campaign stance: They are not Trump. Their parades and street demonstrations since his inauguration have not come out for any economic policy.

    On Friday, February 10, the party’s Democratic Policy group held a retreat for its members in Baltimore. Third Way “centrists” (Republicans running as Democrats) dominated, with Hillary operatives in charge. The conclusion was that no party policy was needed at all. “President Trump is a better recruitment tool for us than a central campaign issue,’ said Washington Rep. Denny Heck, who is leading recruitment for the Democratic Congressional Campaign Committee (DCCC).”

    But what does their party leadership have to offer women, Blacks and Hispanics in the way of employment, more affordable health care, housing or education and better pay? Where are the New Deal pro-labor, pro-regulatory roots of bygone days? The party leadership is unwilling to admit that Trump’s message about protecting jobs and opposing the TPP played a role in his election. Hillary was suspected of supporting it as “the gold standard” of trade deals, and Obama had made the Trans-Pacific Partnership the centerpiece of his presidency – the free-trade TPP and TTIP that would have taken economic regulatory policy out of the hands of government and given it to corporations.

    Instead of accepting even Sanders’ centrist-left stance, the Democrats’ strategy was to tar Trump as pro-Russian, insist that his aides had committed impeachable offenses, and mount one parade after another. “Rep. Marcia Fudge of Ohio told reporters she was wary of focusing solely on an “economic message” aimed at voters whom Trump won over in 2016, because, in her view, Trump did not win on an economic message. “What Donald Trump did was address them at a very different level — an emotional level, a racial level, a fear level,” she said. “If all we talk about is the economic message, we’re not going to win.” This stance led Sanders supporters to walk out of a meeting organized by the “centrist” Third Way think tank on Wednesday, February 8.

    By now this is an old story. Fifty years ago, socialists such as Michael Harrington asked why union members and progressives still imagined that they had to work through the Democratic Party. It has taken the rest of the country half a century to see that Democrats are not the party of the working class, unions, middle class, farmers or debtors. They are the party of Wall Street privatizers, bank deregulators, neocons and the military-industrial complex. Obama showed his hand – and that of his party – in his passionate attempt to ram through the corporatist TPP treaty that would have enabled corporations to sue governments for any costs imposed by public consumer protection, environmental protection or other protection of the population against financialized corporate monopolies.

    Against this backdrop, Trump’s promises and indeed his worldview seem quixotic. The picture of America’s future he has painted seems unattainable within the foreseeable future. It is too late to bring manufacturing back to the United States, because corporations already have shifted their supply nodes abroad, and too much U.S. infrastructure has been dismantled.

    There can’t be a high-speed railroad, because it would take more than four years to get the right-of-way and create a route without crossing gates or sharp curves. In any case, the role of railroads and other transportation has been to increase real estate prices along the routes. But in this case, real estate would be torn down – and having a high-speed rail does not increase land values.

    The stock market has soared to new heights, anticipating lower taxes on corporate profits and a deregulation of consumer, labor and environmental protection. Trump may end up as America’s Boris Yeltsin, protecting U.S. oligarchs (not that Hillary would have been different, merely cloaked in a more colorful identity rainbow). The U.S. economy is in for Shock Therapy. Voters should look to Greece to get a taste of the future in this scenario.

    Without a coherent response to neoliberalism, Trump’s billionaire cabinet may do to the United States what neoliberals in the Clinton administration did to Russia after 1991: tear out all the checks and balances, and turn public wealth over to insiders and oligarchs. So Trump’s his best chance to be transformative is simply to be America’s Yeltsin for his party’s oligarchic backers, putting the class war back in business.

    What a Truly Transformative President Would Do/Would Have Done

    No administration can create a sound U.S. recovery without dealing with the problem that caused the 2008 crisis in the first place: over-indebtedness. The only one way to restore growth, raise living standards and make the economy competitive again is a debt writedown. But that is not yet on the political horizon. Obama’s doublecross of his voters in 2009 prevented the needed policy from occurring. Having missed this chance in the last financial crisis, a progressive policy must await yet another crisis. But so far, no political party is preparing a program to juxtapose to Republican-Democratic austerity and scale-back of Social Security, Medicare and social spending programs in general.

    Also no longer on the horizon is a more progressive income tax, or a public option for health care – or for banking, or consumer protection against financial fraud, or for a $15-an-hour minimum wage, or for a revived protection of labor’s right to unionize, or environmental regulations.

    It seems that only a new party can achieve these aims. At the time these essays are going to press, Sanders has committed himself to working within the Democratic Party. But that stance is based on his assumption that somehow he can recruit enough activists to take over the party from Its Donor Class.

    I suspect he will fail. In any case, it is easier to begin afresh than to try to re-design a party (or any institution) dominated by resistance to change, and whose idea of economic growth is a pastiche of tax cuts and deregulation. Both U.S. parties are committed to this neoliberal program – and seek to blame foreign enemies for the fact that its effect is to continue squeezing living standards and bloating the financial sector.

    If this slow but inexorable crash does lead to a political crisis, it looks like the Republicans may succeed in convening a new Constitutional Convention (many states already have approved this) to lock the United States into a corporatist neoliberal world. Its slogan will be that of Margaret Thatcher: TINA – There Is No Alternative.

    And who is to disagree? As Trotsky said, fascism is the result of the failure of the left to provide an alternative.

  • Your Pension Will Be At The Center Of America's Next Financial Crisis

    Authored by Jeff Reeves via The Hill

    I’m not a fan of the “greed is good” mentality of Wall Street investment firms. But the next financial crisis that rocks America won’t be driven by bankers behaving badly. It will in fact be driven by pension funds that cannot pay out what they promised to retirees. According to one pension advocacy organization, nearly 1 million working and retired Americans are covered by pension plans at the risk of collapse.

    The looming pension crisis is not limited by geography or economic focus. These including former public employees, such as members of South Carolina’s government pension plan, which covers roughly 550,000 people — one out of nine state residents — and is a staggering $24.1 billion in the red. These include former blue collar workers such as roughly 100,000 coal miners who face serious cuts in pension payments and health coverage thanks to a nearly $6 billion shortfall in the plan for the United Mine Workers of America. And when the bill comes due, we will all be in very big trouble.

    It’s bad enough to consider the philosophical fallout here, with reneging on the promise of a pension and thus causing even more distrust of bankers and retirement planners. But I’m speaking about a cold, numbers-based perspective that causes a drag on many parts of the American economy. Consider the following.

    Pensioners have no flexibility

    According to a Bureau of Labor Statistics report from 2015, the average household income of someone older than age 75 is $34,097 and their average expenses exceed that slightly, at $34,382. It is not an exaggeration, then, to say that even a modest reduction in retirement income makes the typical budget of a 75-year-old unsustainable — even when the average budget is far from luxurious at current levels. This inflexibility is a hard financial reality of someone who is no longer able to work and is reliant on means other than labor to make ends meet.

    Social Security is in a tight spot

    So who will step up to support these former pensioners? Perhaps the government, via Social Security, except that program itself is in crisis and will see its trust fund go to zero just 17 years from now, in 2034, based on the current structure of the program. If millions of pensions go bust and retirees have no other savings to fall back on, it will be nigh impossible to cut benefits or reduce the drag on this program. But won’t a pension collapse mean we desperately need Social Security, even in an imperfect form, well beyond 2034?

    Pensions

     

    The guaranty is no solution

    There is an organization, the Pension Benefit Guaranty Corporation (PBGC), which is meant to insure pensions against failure. However, it was created in 1974 as part of a host of financial reforms and is far from a perfect solution, primarily because it is funded by premiums from defined-benefit plan sponsors and assets seized from former plan sponsors that have entered bankruptcy.

    What happens when a handful of troubled pension funds turns into dozens or hundreds? Remember, the PBGC guarantees a certain amount that is decidedly lower than your full pension — as members of the Road Carriers 707 pension fund learned when the group “protected” their pensions by helping to pay benefits, which had been reduced from $1,313 per month to $570. That’s better than zero, but hardly encouraging.

    This is not about helping Baby Boomers fund an annual cruise to the Caribbean. Older, low-income pensioners are not saving their money. Instead, they’re spending it on necessities such as food, housing, healthcare and transportation. That means every penny you reduce from their budget means a penny in spending that is removed from the U.S. economy.

    Anyone who has taken Econ 101 knows about the “multiplier effect” where $1 in extra spending can produce a much larger amount of economic activity as that dollar circulates around businesses, consumers and banks … or in this case, how $1 less in spending causes a an equally powerful cascade of negative consequences.

    By helping ward against a pension crisis, America will be protecting its economy for everyone — plain and simple. But that requires some tough decisions on all sides. For instance, the U.S. Treasury denied a cut to New York Teamsters’ pension plan that was proposed last year. But now the fund is on the brink of collapse, and its recipients are facing benefits that are in some cases one-third what they were 15 years ago.

    Like Social Security, current workers can’t contribute enough to offset the big obligations owed to retirees. And as with the flagship entitlement program, it’s up to regulators and legislators to step in — even when it may not be easy — in order to keep the system from collapsing. Let’s hope they make both pension reform and Social Security reform a priority in the near future.

  • On The Edge Of An "Uncontrollable Liquidity Event": The Definitive Guide To China's Financial System

    While most traders over the past month have been obsessing over developments in Washington, the real action – most of it under the radar – has played out in China, where as discussed over the past few weeks, domestic liquidity has tightened notably, culminating with an unexpected bailout by the PBOC of various smaller banks who defaulted on their interbank loans as interest rates, particularly on Certificates of Deposit (CD) – which have become a preferred funding conduit for many Chinese banks – but not only, spiked. Ironically, these mini PBOC bailouts took place only after the PBOC itself decided to tighten conditions sufficiently to choke off much of the shadow debt funding China’s traditional banks.

    As a result, the interbank CD rate rallied strongly, leaving a narrower or negative spread for some smaller banks, whose legacy carry trades (see below for details) suddenly became unprofitable. Also, as reported last Tuesday, several small banks failed to meet overnight repo obligations. This liquidity tightness has been mainly due to escalating financial deleveraging, as the PBOC has lifted market rates and rolled out stricter macroprudential policy rules.

    But all those events in isolation seem as merely noise against what otherwise appears to be a relatively benign, even boring, backdrop: after all, neither China’s stock, nor bond markets, has seen even remote volatility in recent months, and certainly nothing compared to what was experienced one year ago, when the Chinese turmoil nearly led to a bear market across developed markets. Then again, maybe the markets are simply once again behind the curve due to all the inherent complexity of China’s unprecedented, financialized and extremely complex pre-Minsky moment ponzi scheme.

    Last last week, Deutsche Bank analysts led by Hans Fan released what is the definitive research report summarizing all the latest troubling trends facing China, which judging by capital markets, nobody is paying any attention to. They should, because as Deutsche Bank puts it, if taken too far, they threaten an “uncontrollable liquidity event“, i.e., the financial cataclysm that Kyle Bass and other perma-china-bears have been waiting for.

    And, as usual, it all started with rising interest rates, which in turn is leading to increasing funding pressure, which if left unchecked, could lead to dire consequences for China’s underfunded banking system.

    Here is a fantastic explanation of everything that has happened in China in recent weeks, and more importantly, what may happen next, courtesy of Deutsche Bank. We urge readers to familiarize themselves with the content as we will refer back to this article in future posts.

    * * *

    Only in early stage of financial deleveraging

    China’s monetary policy has been shifting gradually towards a tightening stance since 2H16. Targeting the liabilities side of the banking sector, the PBOC hiked rates of monetary tools, such as MLF, SLF and OMO (Figure 1), and withdrew liquidity on a net basis after the Chinese New Year (Figure 2). At the same time, it targeted the asset side of the banking sector when it rolled out stricter MPA rules by including off-BS WMP credit in broader credit assessment and imposing stricter-than-expected penalties on banks that fail to comply.

    As a result, the key indicators in the money market, including repo and CD rates, all suggest stretched domestic liquidity. For example, the 7-day repo rate, which is the most representative liquidity indicator, has exceeded the interest rate corridor ceiling of 3.45% several times this year (Figure 3). Moreover, the interbank CD rate spiked to 4.6% on 20 Mar 2017, up c.180bps from last year’s low (Figure 4).

    We summarize in the below diagram recent financial deleveraging efforts by regulators.

     

    Why push forward financial deleveraging?

    We believe the PBOC aims mainly to contain the fast-growing leverage in China’s financial sector. In our view, the country’s financial leverage basically relates to speculators borrowing excessive wholesale funding to grow assets and chase yield, rather than relying on vanilla deposits. To measure this, we believe one of the good indicators of financial leverage is the credit-to-deposit ratio, calculated as total banking credit as a percentage of total deposits. The higher the ratio, the more fragile the financial sector, and the more likely the banking system will run into difficulties to finance unexpected funding requirements. Traditionally the loan-to-deposit ratio was widely used to measure system liquidity risk, but has become increasingly irrelevant in China, as banks are growing their bond investments and shadow banking books to extend credit.

    As shown in Figure 6, the credit-to-deposit ratio in China’s banking system has risen sharply by 27ppts since 2011 to reach 116% as of February 2017. We see the rising credit-to-deposit ratio basically is a function of increasing reliance on wholesale funding to support strong credit growth. As of end 2016, borrowing from banks and NBFIs accounted for 17% of total liabilities, against 8% 10 years ago (Figure 7).

    Which banks are more leveraged? Joint-stock banks and city/rural banks

    As we have long argued, the risks are not evenly distributed in China’s banking system; there are notable differences in the balance sheet structures of different types of banks. As shown in Figure 8, medium-sized banks, which mainly include joint-stock banks, recorded the highest credit-to-deposit ratios and hence are most reliant on wholesale funding. At the same time, small banks, which mainly include city/rural commercial banks, also delivered notable increases in credit-to-deposit ratios, despite a lower absolute level. The credit-to-deposit ratio for small banks has increased by 30ppts since 2010, vs. 14ppts for the big-four banks in the same period.

    On the liabilities side, medium-sized and small banks mainly rely on wholesale funding, i.e. borrowing from banks and NBFIs. As of 1H16, wholesale funding made up 31% and 23% for medium-sized and small banks, respectively, against only 13% for big-four banks, as shown in Figure 9.

    A closer look into interbank CDs – funding pressure ahead

    Wholesale funding for smaller banks has been obtained mainly by issuing CDs in the interbank market. Interbank CDs have supported 20% of smaller banks’ assets expansion over the past 12 months. Since the introduction of interbank CDs in 2014, CD issuance recorded strong growth and the balance jumped 89% yoy to Rmb7.3tr in Feb 2017 (Figure 10), or 3.4% of total banking liabilities.

    Joint-stock and city/rural banks account for 99% of issuance (Figure 12). In the coming months these banks have ambitious CD pipelines. More than 400 banks announced plans to issue CDs worth Rmb14.6tr in 2017. This represents 60% yoy growth from the issuance plan in 2016. Investor-wise, WMPs, various asset management plans and commercial banks themselves are the major buyers, which combined make up 79% of the total balance (Figure 13).

    However, we view banks that are more reliant on CDs as more vulnerable to rising rates and tighter regulations.

    Reflecting tighter liquidity, the interbank CD rate has rallied strongly, with the 6-month CD pricing at 4.6% on average. Some CDs issued by smaller rural commercial banks have been priced close to 5% recently. This would have pushed up the funding cost and notably for smaller banks. If banks invest in low-risk assets such as mortgages, discounted bills and treasury bonds, this would lead to a negative spread. Alternatively, banks can lengthen asset duration, increase the risk appetite, add leverage or slow down asset growth. Among these alternatives, we believe a slowdown in asset growth is the most likely.

    Caixin previously reported CDs are likely to be reclassified as interbank liabilities, capped at 33% of total liabilities. This potential regulation could add funding pressure for banks with a heavy reliance on interbank liabilities. With Rmb4tr interbank CDs to mature during Mar- Jun 2017 (Figure 16) and interbank liabilities exposure approaching the limit (Figure 17), joint-stock and city/rural banks are subject to notable funding pressure.

    We show the listed banks’ issuances in the chart below. INDB, SPDB and PAB are among the most exposed to interbank CDs.

    * * *

    What are the implications?

    Are we close to a “tipping point”?

    For now, probably not, especially in a year of leadership transition. In our view, the risk of an uncontrollable liquidity event is low, as the PBOC will do whatever it takes to inject liquidity if needed. In the domestic liquidity market, the PBOC exerts strong influence in both the volume and pricing of liquidity. With 90%+ of financial institutions directly or indirectly controlled by the government, PBOC will likely continue to give liquidity support. In 2H15, the central bank established an interest rate corridor to contain interbank rates within a narrow range and pledged to inject unlimited liquidity to support banks with funding needs.

    However, continuing liquidity injections do not come without a cost. A bigger asset bubble, persistent capital outflow pressure and a lower yield curve over the longer term are side effects that China will have to bear. At the same time, the execution risk of PBOC itself is rising.

    Implications on system credit growth

    We expect system credit growth to moderate from 16.4% yoy in 2016 (16.1% in Feb’17) to approximately 14-15% yoy in 2017 (Figure 23). As a result, the credit impulse is likely to trend lower from the current high level (Figure 24). The slower credit growth is mainly attributable to several factors: 1) a tighter liquidity stance to push up the funding cost of smaller banks and to force them to slow down asset growth; 2) further curbs on shadow banking; 3) a higher  bond yield to defer bond issuance; and 4) slower mortgage loan growth.

     

    Appendix A – Liquidity flows in China’s interbank market

    New deposits supported 55% of asset growth in China’s banking system in 2016. The remaining 45% of new assets were mainly funded by borrowing from PBOC (19%) and borrowing from each other (19%, including bond issuance). While borrowing from NBFIs remained flat for the entire system, it was the main funding source for medium-sized and small banks. We summarize the liquidity flows in China’s interbank market in Appendix A.

    Liquidity injection from PBOC. Over the past 12 months, to offset the liquidity drain from falling FX reserves, the PBOC has injected a huge amount of liquidity worth Rmb5.8tr into the banking system, which is equivalent to 400bps of RRR cuts (Figure 29). Of this injection, 30% and 24% have been made to support joint-stock banks and policy banks, respectively (Figure 30). For details, please see our report, PBOC liquidity facilities: Doing whatever it takes, 23 January 2017.

    Borrowing from interbank market. Policy banks and big-four banks are net interbank lenders, while joint-stock and city/rural commercial banks are net borrowers. Joint-stock and city/rural banks not only borrow from policy/big banks, but also from each other. This could potentially lead to stronger contagion effects if some of them run into liquidity stress.

    Lending/borrowing between banks and NBFIs. There has been a sharp rise in net claims to NBFIs from banks (Figure 33). We believe this is due to rising shadow banking transactions and also arbitrage activities with funds self-circulating within the financial sector. Clearly as shown in Figure 34, small banks are key lenders to NBFIs

    Appendix B – What is driving the financial leverage?

    From the accounting perspective, we believe the rising credit-to-deposit ratio is mainly due to bank credit circulating back into the banking system as non-deposit liabilities. In normal cases, when a bank makes a $100 corporate loan or purchases a $100 corporate bond, the bank books the credit to a corporate on the asset side while it also books a deposit on the liability side. We show a normal case in Figure 35. However, if a bank’s money circulates back into the banking system, just like in the two cases we illustrate in the diagram below, the $100 deposit is removed but interbank borrowing or borrowing from NBFIs would increase by $100. While there are likely to be many variants of bank credit circulation, we elaborate on two cases in detail.

    Case #1: Bank credit circling via NBFIs

    It is well known that NBFIs have been serving as SPVs to channel shadow banking credit from banks to corporates in past years. What is  insufficiently addressed though is that NBFIs also have been acting as channels for bank credit circling. Let us show a simple example below:

    • First, Bank A invests in an asset management plan packaged by an NBFI. This is booked as a receivable investment on Bank A’s balance sheet.
    • Second, the NBFI invests further in a CD issued by Bank B. Bank B books the CD under interbank borrowing. The money circulates back into the banking system and no deposit is generated.
    • In some cases, if the yield of the CD does not cover the cost of issuing the asset management plan, the NBFI will leverage up in the bond market by pledging the CD through repo transactions. The leverage could be built up by two transactions: 1) entrusted bond investment (“Daichi” in Chinese); or 2) entrusted investment (“Weiwai” in Chinese), which we discuss in detail in our 2017 outlook report.
    • In this case we use the investment in a bank’s CD as an example. In reality it applies to investment in interbank CDs, interbank negotiated deposits and financial bonds issued by banks, which are all circulating money back into the banking system.

    The bank credit circling through NBFIs is growing rapidly. This is evidenced by strong growth in banks’ receivable investments, which reached Rmb21tr as of end-2016 to account for 10% of commercial banking assets, as shown in Figure 36. This represents 80% CAGR in balance since 2013. The majority of these investments was made by medium-sized and small banks. Note that not all receivable investments are credit circling, but we believe it should make up a notable portion. We summarize the structure of banks’ receivable investments in Figure 38.

    The NBFI here could be any trust company, broker, fund subsidiary or insurance company. We believe brokers and fund subsidiaries should be the key players, as their bond trading leverage in the interbank bond market is much higher than other participants (Figure 37).

     

    Case #2: Bank credit circling via corporates

    Corporate loans may circle back into the banking system as well. This is because many corporates use borrowed but idle cash to buy bank WMPs. Below is a simple example:

    • Firstly, Bank A makes a loan to a corporate.
    • Secondly, the corporate uses the loan proceeds to buy a wealth management product issued by Bank A.
    • Thirdly, Bank A invests the WMP fund in a financial bond issued by Bank B. This corporate deposit would circle back to the banking system as a non-core liability.
    • To make this process economic, in many cases it would require leverage. The corporate borrowing cost may be at 4%, but the financial bond issued by Bank B may only yield 3.5%. To compensate the yield shortage, Bank A has to entrust the WMP fund to a third party and to leverage up by pledging the bonds through repo transactions. This process is called entrusted investment (“Weiwai” in Chinese, or entrusting to an external party).

    This type of transaction is not an individual case. As shown in Figure 39, corporates purchased Rmb7.7tr WMPs in 1H16. This accounted for 7% of total corporate debt in China, or 29% of total WMP AUM in the system. SOEs, large private corporate and listed companies enjoy ample bank lending resources with low interest cost. However, the lack of attractive investment projects in their own business prompts them to invest in the financial market (i.e. bank WMPs).

  • Visualizing The World's Deepest Oil Well

    In the world’s deepest gold mine, workers will venture 2.5 miles (4 km) below the Earth’s surface to extract from a 30-inch (0.8m) wide vein of gold-rich ore.

    While these depths are impressive, Visual Capitalist's Jeff Desjardins notes that mining is limited by the frailty of the human body. Going much deeper would be incredibly dangerous, as limitations such as heat, humidity, logistics, and potential seismic activity all become more intense.

    Luckily, the oil industry does not have such human obstacles, and drilling deep into the Earth’s crust is instead limited by a different set of circumstances – how deep can the machinery and technology go before the unfathomable heat and pressure renders it inoperable?

    THE WORLD’S DEEPEST OIL WELL

    Today’s infographic comes to us from Fuel Fighter, and it helps to visualize the mind-boggling depths of the world’s deepest oil well, which is located in a remote corner of eastern Russia.

    Courtesy of: Visual Capitalist

     

    The world’s deepest oil well, known as Z-44 Chayvo, goes over 40,000 ft (12 km) into the ground – equal to 15 Burj Khalifas (the tallest skyscraper) stacked on top of each other. That’s also equal to 2x the record height for air balloon flight.

    Perhaps more importantly to the operator, Exxon Neftegas Ltd., the wells on this shelf are expected to produce a total of 2.3 billion barrels of oil.

    THAT’S SOME SERIOUS DEPTH

    Before the Z-44 Chayvo Well and other holes like it were drilled on the eastern side of Russia, the famous Kola Superdeep Borehole held the record for drill depth.

    Located in western Russia, this time just 10 km from the border with Norway, the Kola Superdeep Borehole was rumored to have been discontinued in 1992 because it actually reached “hell” itself. At its most extreme depth, the drill had pierced a super-hot cavity, and scientists thought they heard the screams of “damned souls”.

    All folklore aside, the Kola Superdeep Borehole is super interesting in its own right. It revealed many important things about our planet, and it still holds the record today for depth below the surface.

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Today’s News 26th March 2017

  • McCain: "The New World Order Is Under Enormous Strain"

    It was a bumper day for John McCain when on Friday Donald Trump’s Republican nemesis gloated as Trump’s “art of the deal” collapsed in the last minute, after the President and Ryan-led effort to repeal Obamacare suffered what appears to be a terminal setback. In the wake of Trump’s misfortune, McCain renewed his calls on Friday for a return to a legacy neocon status quo, when speaking at the Brussels forum, said that the world “cries out for American and European leadership” through the EU and Nato, and said that the EU and the US needed to develop “more cooperation, more connectivity”.

    In a “new world order under enormous strain” and in “the titanic struggle with forces of radicalism … we can’t stand by and lament, we’ve got to be involved,” said McCain who is now chairman of the armed services committee in the US Senate, quoted by the EU Observer. “I trust the EU,” he said, defending an opposite view from that of US president Donald Trump, who said in January that the UK “was so smart in getting out” of the EU and that Nato was “obsolete”. He said that the EU was “one of the most important alliances” for the US and that the EU and Nato were “the best two sums in history”, which have maintained peace for the last 70 years.

    Further attacking Trump’s global worldview, McCan said that “we need to rely on Nato and have a Nato that adjusts to new challenges.” He noted that “the EU has too many bureaucrats, not much bureaucracy,” but added that “it’s not the only place on earth with that problem.” He said that he was “still wondering what the overall effect of Brexit will be” and that he did not know “if this is the beginning of a serious problem for the EU”. McCain did not disagree, however, with Trump’s demand that European countries increase their defense spending for Nato.

    McCain also revealed he hasn’t met the President Donald Trump in person since he took office, and he urged Trump to reach out to his opponents—Democratic and otherwise—ala Ronald Reagan if he wants to repeal Obamacare. “Do some outreach. Get to know some of these Democratic leaders,” he said. “You can find common ground.” McCain said he’d met Trump “some years ago” when he was a businessman, but had not met him since. McCain said he did speak “almost daily” to National Security Adviser Lt. Gen. H.R. McMaster and Defense Secretary Jim Mattis, however.

    “He doesn’t seem to be that upset that he’s not talking to him,” said German Marshall Fund’s Derek Chollet, a former Obama Pentagon official. “He’s trying to run U.S. defense policy through Mattis and effectively ignore Trump.”

    That said, McCain also said it was “too early” to pass judgment on his presidency, although his series of critical comments in recent weeks have demonstrated his growing skepticism about the Trump administration.

    Furthermore, while McCain said he was “very pleased” by Trump’s picks for his national security team – despite suggesting that they were being bypassed by more ideological and less competent people – he took the opportunity to attack Trump’s decisionmaking, saying “the question is: who does the president listen to, who drives the tweets at 6 in morning?”, he said.Asked whether he thought that “Russia owns a significant part of the White House,” he said: “I don’t worry about that.”

    The unspoken suggestion: Russia.

    What worries McCain, he said, was “the Russian role in our elections”, even if he admitted that he has seen “no evidence they succeeded” in affecting the outcome of last year’s US vote. Noting that Russia was now trying to influence elections in France and in Germany, he said that if it succeeded it would be “a death warrant for democracy”.

    “It’s an act of destruction that is certainly more lethal than dropping some bombs,” he insisted. McCain, a Russia hawk, said that Putin wanted to restore the Russian empire: “He wants the Baltics, he has taken Crimea, he’s been in Ukraine.”

     

    “These are KBG thugs, my friends,” he said, referring to the former Russian spy service for which Putin used to work. He added that the US needed to “respond accordingly”. He said however that there was “nothing wrong” if Trump met Putin.

    “I’m not against meeting,” he said, reminding the Brussels forum that US presidents met Soviet leaders during the Cold War. But he added that “the best way to go to a meeting is with a strong hand” and that was not the case for the US right now.

  • Pepe Escobar: Daesh, Creature Of The West

    Authored Op-Ed by Pepe Escobar via SputnikNews.com,

    James Shea, Deputy Assistant Secretary of Emerging Threats at NATO – now that’s a lovely title – recently gave a talk at a private club in London on the Islamic State/Daesh. Shea, as many will remember, made his name as NATO’s spokesman during the NATO war on Yugoslavia in 1999.

    After his talk Shea engaged in a debate with a source I very much treasure. The source later gave me the lowdown. 

    According to Saudi intelligence, Daesh was invented by the US government – in Camp Bacca, near the Kuwait border, as many will remember — to essentially finish off the Shiite-majority Nouri al-Maliki government in Baghdad.

    It didn’t happen this way, of course. Then, years later, in the summer of 2014, Daesh routed the Iraqi Army on its way to conquer Mosul. The Iraqi Army fled. Daesh operatives then annexed ultra-modern weapons that took US instructors from six to twelve months to train the Iraqis in and…surprise! Daesh incorporated the weapons in their arsenals in 24 hours.

    In the end, Shea frankly admitted to the source that Gen David Petraeus, conductor of the much-lauded 2007 surge, had trained these Sunnis now part of Daesh in Anbar province in Iraq.

    Saudi intelligence still maintains that these Iraqi Sunnis were not US-trained – as Shea confirmed – because the Shiites in power in Baghdad didn’t allow it. Not true. The fact is the Daesh core – most of them former commanders and soldiers in Saddam Hussein’s army — is indeed a US-trained militia.

    True to form, at the end of the debate, Shea went on to blame Russia for absolutely everything that’s happening today – including Daesh terror. 

    Mr. Sykes and Monsieur Picot, you’re dead

    Now let’s go back to the proclamation of the Daesh Caliphate in June 29, 2014. That was choreographed as a symbolic abolition of the Sykes-Picot border that split the Middle East a century ago. At the same time, abandoning the option of a military push to take Baghdad, Daesh chose to regionalize and internationalize the fight, creating their own transnational state and denouncing regional states as “impostors”. All that coupled with the amp up of any chaos strategy capable of horrifying Western public opinion. 

    For large swathes of a Sunni Arab audience, this was powerful stuff. Daesh was proclaiming themselves, in a warped manner, as the sole real heir of the different Arab Springs; the only totally autonomous regional movement, depending exclusively on its own local base, made up of numerous Bedouin tribes.

    But how did we get here?

    Let’s go back once again – now to Iraq in the 1990s, during the Clinton era. The strategic logic at the time spelled out an instrumentalization of UN resolutions — with Washington de facto controlling Iraq’s oil, manipulating the price as a means of pressure over trade competitors much more dependent on Iraqi oil such as China, Japan and selected European nations.

    9/11 turned this state of affairs upside down – leading to the 2003 neocon ideological stupidity and subsequent amateurism managing an occupation in total ignorance of history and the ultra-complex dynamics between the Iraqi state and society. Saddam Hussein was the de facto last avatar of a political arrangement invented by imperial Britain in 1920. With the invasion and occupation, the Iraq state collapsed. And the Cheney regime had no clue what to do with it.

    There was no Sunni alternative. So Plan B, under major pressure by Shiites and Kurds, was to give voice to the majority. The problem is political parties ended up being religious and ethnic parties. The partition of power, Lebanese-style — Shiites, Sunnis and Kurds – turned out to be a dysfunctional nightmare. 

    Between 2005 and 2008, this American attempt to rebuild the Iraqi state yielded a horrendous confessional civil war between Sunnis and Shiites. The Sunnis lost. And that largely explains the subsequent success of Daesh in creating a “Sunniland”.

    The US occupation-Arab Spring love affair

    Now let’s turn to the Syrian version of the Arab Spring in February/March 2011. Initial protests against Assad’s iron rule were peaceful – multi-communitarian and multi-confessional. But soon anti-Alawite rancor started to radicalize a significant part of the Sunni majority.

    As historian Pierre-Jean Luizard, a specialist in Iraq, Syria and Lebanon at the French CNRS reminds us, Syria was the favorite land of Hanbalism – a most conservative branch of Sunni Islam that highly influenced the emergence of Wahhabism in the Arabian Peninsula. That implies a virulent anti-Shiism. Thus the emergence among the Syrian armed opposition of multiple Salafi-jihadi groups, most of all Jabhat al-Nusra – a.k.a. al-Qaeda in Syria. 

    Meanwhile, Assad fine-tuned a message to the West and his own Sunni bourgeoisie oscillating between allegiance and dissidence; it’s me, or chaos. Chaos ensued, anyway; horrendous structural violence, all-around institutional decrepitude, total territorial fragmentation. 

    So it’s fair to argue that both US occupation and the Syrian Arab Spring ended up producing the same result. With some differences; in Iraq, Daesh enjoys the (silent) support of a majority of Sunni Arabs. In Syria, Sunnis are divided; Daesh may rule the desert — Bedouin culture, but it’s Jabhat al-Nusra that captured significant Sunni support in big urban centers such as Aleppo. In Iraq, the borders between the three large communities – Sunni, Shiite, Kurd – are more or less frozen. In Syria, it’s a never-ending jigsaw puzzle.

    What happens next is a mystery. The de facto independence of Iraq Kurdistan may solidify. The Baghdad government may increasingly represent only Shiites. Yet it’s hard to see Daesh consolidating its control of Sunni Iraq – not with the ongoing Battle of Mosul.

    Blowback rules the wilderness of mirrors

    It’s easy to dismiss Daesh as the apex of barbarian cultural idiosyncrasies. Even wallowing in gruesomeness, Daesh has been able to project a universalist dimension beyond its Sunni Arab Middle Eastern base. It’s like the clash of civilizations playing in a wilderness of mirrors. Daesh amplifies the clash not between East and West, or the Arab world and the Atlanticist hegemon, but mostly between a certain (warped) conception of Islam and assorted infidels. Daesh “welcomes” everyone, even Catholic Europeans while persecuting Arab infidels and bad Muslims.

    It’s no wonder the Caliphate — a concrete utopia on the ground – finds an echo among young lone wolves living in the West. Because Daesh insists on the colonial Franco-British – and then neocolonial American — history of Muslims being trampled upon by a dominating, infidel West, they manage to channel a diffuse sentiment of injustice among the young.

    Everyone – US, France, Britain, Russia, Iran — is now at war with Daesh (Turkey only half-heartedly, as well as the House of Saud and the GCC petrodollar gang; for them this not a priority.)

    But this is a war without a serious political long-term perspective. No one is discussing the place for Sunni Arabs in an Iraq dominated by the Shiite majority; how to put the Syrian state back together; or whether private donors to Daesh from Kuwait, Qatar, Saudi Arabia and the Emirates will simply disappear.

    The encirclement of Raqqa and the re-conquest of Mosul will mean absolutely nothing if the causes of Daesh’s initial success are not addressed. It starts with the West’s mission civilisatrice as the cover story for unbounded colonial domination, and it straddles the methodical, inexorable, slow motion American destruction of Iraq. Blowback will continue to reign over the wilderness of mirrors; an attack near the British Parliament by a knife-carrying lone wolf “soldier answering “its call” killing four people mirrored by US jets bombing a school near Raqqa killing thirty-three civilians.

    Petraeus may have trained them in the deserts of Al-Anbar. But most of all that rough beast, slouching towards Camp Bacca to be born, bore the touch of a Western mind.

  • Trump Obamacare Repeal Blew Up Bigly Because of a House Divided Against Itself

    The following article by David Haggith is from The Great Recession Blog:

    By Enola Gay Tail Gunner S/Sgt. George R. (Bob) Caron (SElephant at zh.wikipedia) [Public domain], from Wikimedia Commons

    Trump’s really big supporters openly grieved that the explosion of his emphatically promised Obamacare replacement bodes poorly for all of Trump’s plans. Fox’s Sean Hannity and Lou Dobb’s regaled the Republican party for failing to take the reins and lead now that the party finally has the chance to prove it can do what it has promised. Hannity stated that numerous high authorities told him this marks the end of any Obamacare repeal for 2017.

    This first attempt by Trump and his party to see if they can accomplish anything together was by everyone’s account (except Trump’s) a dismal failure. Even Paul Ryan, who drafted the plan that Trump endorsed, admitted the enormity of failure quite honestly. The least I can say for him (not being one who likes him in the slightest) is that he owned it.

    Ryan picked up the argument leveled against Republicans by Democrats when they were running congress, which said that it is easy to be an opposition party and simply stand against everything, but quite a different matter to be creative and actually govern. Democrats long argued that Republicans really have no plan to replace Obamacare that could possibly succeed — that they were all talk — and Republicans just proved them right. Since Republicans kept Democrats completely out of the discussion, it’s fair to say Republicans failed entirely on their own.

    Ryan failed embarrassingly, and I question whether his leadership will survive this failure, except for the fact that the faction most responsible for the failure (outside of Ryan himself) is the one that would likely seek his blood if Ryan had succeeded. Nevertheless, they cannot stand him and would probably join any other faction that now wants to bring him down.

    Trump failed bigly, too, because the truth is that he swore over and over to his supporters that he would get a “great” replacement through congress as one of his first orders of business. Granted he did not say he would succeed right away, but only that he would make it his first order of business. It is, however, now questionable that he will ever get a replacement through, much less a great one. He has three more years to try again, but a total failure within your own party to get your first order of business done, especially when it is something the entire Republican party has said it will do over and over for years and when you are in your honeymoon period, is no small failure.

    Ryan has manned up to that. The party needs to also. Trump blamed it on Democrats, but that actually is deplorable, because Trump knew every time he made the promise that he didn’t have a ghost of a chance at getting Democrat support, given how much he attacked them over the plan. How could he not know that unless he is delusional? The last group in the world that would help him repeal Obamacare would be Democrats. So, if the repeal’s failure is their fault, give that they were never even included in the discussion, the failure to realize the obvious — that they would never support him — was his own.

    Republicans could learn from this and do better, but it remains to be seen whether they are able and willing to learn. That requires humility, which is always scarce in congress. In the meantime, the failure to deliver Trump’s big promise of “immediate Obamacare repeal” is a death knell to the Trump Rally, and the clock is ticking against all of Trump’s plans.

    (It doesn’t guarantee that the stock market will immediately crash, though it easily could; but its rally days are over. My prediction last year was that the rally would end as soon as Trump and congress had to actually work together. That is when investors would be forced to grasp reality and see that nothing Trump has promised is anywhere near as likely to come to pass as they believe. That is when I expected they will start to let go of their Tumphoria. Candidate promises are easily made. Legislation is not, and congress has never been more divided. Neither has that congressional subset called Republicans.

     

    A house divided against itself

     

    Here is how it all came down.

    The proposed American Health Care Act (AHCA) died because the House Republican Conference (the official name for the entire Republican caucus in the House of Representatives) is divided into factions that aligned in three groups.  When the center group — the largest group of Republicans who solidly backed Paul Ryan’s bill — tried to move further right to appease the most conservative group, it lost votes from the group that is furthest left (more centrist with respect to American politics overall). There are nowhere near enough votes in the center group of Republicans to beat Democratic opposition, and compromise toward one faction lost the other; so no House majority could be built.

    It is hard to say exactly who was in each group because no vote was taken to put members on record, but this appears to be generally how things fell apart:

    1) By far the largest group would have consisted of the house’s largest conservative faction (172 members), known as the Republican Study Committee, probably joined by members of the House Republican Conference who do not identify with any particular faction. I’m talking here about the group that solidly supported President Trump and Speaker of the House Paul Ryan on the AHCA as originally drafted.

    The Republican Study Committee — formed in 1973 to keep an eye on the party’s moderate leadership during the Nixon-Ford years — is the House’s oldest active faction. It has allied itself over the years with the National Rifle Association, the Heritage Foundation, Focus on the Family, the religious right, Concerned Women for America, the conservative magazine National Review.  One might now categorize it as representing the center of the House Republican Conference (though the truest middle consists people who don’t belong to any faction).

    This caucus, as the House Republican Conference’s mainstay faction, has included such Republican luminaries as Vice President Dan Quayle, former Vice President Dick Cheney, Majority Leader Eric Cantor, former House Majority Leader Tom DeLay, and current Vice President Mike Pence. House Speaker John Boehner was not a member of the group.

    2) The smallest, rewest, and most conservative faction of the House Republican Conference, called the “Freedom Caucus,” was established in 2015 to battle then Speaker John Boehner, particularly to fight his approval of Obamacare (the Affordable Care Act). These members of congress can be seen as the present rabble rousers because this is the faction that was willing to shut down the government in the original fight against Obamacare. Naturally, this group remains set toward making sure Obamacare is completely repealed and is willing to shut down government again, including apparently the leader of the House and the President just to make sure Obamacare is fully repealed. Not compromising on abolishing Obamacare was more important to them than whether or not Trump succeeds by getting off to a strong start.

    The Freedom Caucus is tough enough that it forced John Boehner to remove his butt from the speaker’s cushion, which led to his exiting congress altogether, so Paul Ryan knows full well they could accomplish that again. This battle-hardened caucus embraces the tea party folks, but it is not the Tea Party Caucus, which is now nearly inactive because the official Tea Party Caucus was largely rejected by citizens in the tea party movement (including members of congress, such as Marco Rubio, who were elected by those citizens). It was rejected because the tea party movement saw the Tea Party Caucus as a Republican attempt to hijack a grass-roots movement. By nature, those who identify themselves as part of the tea party movement do not want to see their movement institutionalized or co-opted by the establishment.

    The Freedom Caucus currently has thirty-one members. The group that initially opposed the ACHA certainly included this faction and likely some of the Republicans’ more libertarian faction, formed by Representative Ron Paul, called the Liberty Caucus. These two factions overlap in membership. Michelle Bachman, for example, was a founder of the Tea Party Caucus (now largely subsumed by the Freedom Caucus) and a member of the Liberty Caucus.

    3) A larger faction of the House Republican Conference consists of about fifty people, who are the left-most Republicans in the House of Representatives (meaning only that they are moderates since no one in the Republican party is a leftist). This group was established in 1994 as the “Tuesday Group” when Republicans took control of the House under the more conservative leadership of Newt Gingrich. Gingrich rallied Republicans around his Contract with America. The Tuesday Group formed to resist Gingrich’s more conservative positioning of the Republican party.

    The actual battle went like this: Unquestionably, those aligned with the Freedom Caucus felt the original AHCA bill, as proposed by Paul Ryan, did not go far enough in repealing Obamacare. Therefore, the group of Republicans who were with Trump and Ryan modified the bill to strip out more of Obamacare by taking down some of its Medicaid provisions and other benefits in order go gain some of the more conservative votes. That resulted in those aligned with the Tuesday Group (the most moderate Republicans) feeling the bill now went further right than they could tolerate. As a result, the Republicans lost some moderate votes when they compromised to pick up more conservative votes, and they never gained all of the conservative votes. So, they could not find a majority that could agree on any bill, and they had already thumbed their noses at Democrats completely, so they certainly wouldn’t get any help there.

     

    Why Trump faces big-league troubles in enacting any of his stimulus plans

     

    As Lincoln said in quoting Jesus Christ, “A house divided against itself cannot stand.” (Lincoln was talking about government. Jesus was talking about the devil. Beg me to describe the difference.)

    One major accusation Democrats made against Republicans when Republicans ran an opposition government against Obama was that it is easy to simply be against everything. It is quite another job to govern — to have a clear vision, a good vision that will actually do something for America, and then to unite behind it. Anybody can oppose things without an idea in his or her head as to what will actually work to do some good.

    Now that he’s been knocked around by his own party, Paul Ryan co-opted the argument as his own: (See his comments at the start and then at the 6:30 time maker and especially 8:12 marker.)

     

     

    https://youtu.be/JDAphM1A228

     

     

    And this is exactly why Trump is going to have a hard time getting his legislation passed. Republicans could somewhat unite in opposing anything Democrats came up with because even enemies are known to unite around a common foe. However, the formation of the Freedom Caucus and its overthrow of John Boehner proves even that kind of unity is never complete and hard to achieve. Coming up with great ideas, which Trump entrusted to Ryan, and then uniting around something you can support, though not fully, is harder still.

    As the new opposition government, Democrats are solidly united against Trump, and the Republican party is too divided to create a large enough majority to overcome the Democrats. It has become increasingly divided since the tea-party movement began, so that will not easily change. It could change now that all Republicans should be able to see that, if they don’t unite around something, they will get nothing at all; but will it?

    The Freedom Caucus has not exactly shown itself to be a group that is amendable to softening its positions toward the party’s center, and the Tuesday Group, which might soften toward the party’s center, will never go as far right on anything as the Freedom Caucus demands. That said, other issues may be less polarizing than Obamacare, given that the Freedom Caucus largely formed around the intention of defeating Obamacare during the Boehner years.

    It took only took a matter of days for plan number one to fall embarrassingly flat on its face. That’s a bitter reality for both Trump and Ryan because promises to repeal and replace Obamacare or just abolish it entirely were the biggest and most frequent pledges heard from all Republicans. So, if they can’t get together on that …

    Trump also blinked on his get-tough negotiations with his own party. He said he was going to force a vote so that Republicans who voted against this repeal and replacement of parts of Obamacare would be held accountable on election day. He reneged and backed Ryan’s desire to simply pull the vote so that no one is held accountable and no one can see by what margin it actually failed. (Perhaps the failure was bigger than we know.)

    As a result, no one had to go on record as being the reason hope of an Obamacare repeal in 2017 failed. As Ryan announced in the video above, Obamacare now stands as the law of the land for the foreseeable future because Republicans could not find any plan around which they could form a congressional majority. (In other words, he will not approve another go at it in this session of congress because the votes are not there, nor is the hope of compromise; and any future party leader is going to be hesitant to take this battle on, seeing how Ryan got clobbered.)

    Due to a small faction demanding everything, no Republican got anything they could take back to their voters. Even strong supporters of President Trump like Lou Hobbs and Sean Hannity see this as a massive failure of the Republican House to accomplish anything:

     

     

    https://youtu.be/YbD4Cto4iF4

     

     

    As Hannity said to all congressional Republicans in the video above just before the bill’s final hour,

     

    It’s time for you to give the American people a bill that you have now promised them for almost eight years. I would argue tonight, Failure is not an option for the president of the United States and his first piece of legislation. If you don’t succeed, you will have nobody to blame but yourselves…. And here’s my message to you people in congress: For the love of God, after eight years, can you please do your job? Can you please find a way to work together? Can you please find a way to serve your country, not yourselves, not your re-election?

     

    They just couldn’t do it. They could not succeed even in the slightest compromise even with the promise that this was only phase one and more of their wishes would come later. Republicans now have all the reins of power, and they still accomplished nothing!

     

    What it all means for the Trump Rally

     

    This total fiasco — which was huge, really huge — demonstrates why I’ve said all along that Trump’s road to getting his plans enacted through congress, even with Republicans in control of both houses, is far from being the likelihood that has been priced into the stock market by the Trump Rally.

    While the AHCA defeat is not the end of the game for Trump’s plans, it shows exactly why I’ve said the Trump Rally is a clear case of irrational exuberance on the scale that precedes a major crash (said when writing about the stock market’s response to Trump’s stimulus plans back in December):

     

    Is the stock market irrational in its exuberance for shifting so much just because of Trump’s pledges, which are far, far from becoming reality? I think so. I haven’t even talked about Democrat resistance to Trump’s plans, and he’s already got resistance from the Republican leader of the senate…. That doesn’t mean the market won’t keep going up. Who knows what the maximum height or duration of irrational exuberance is (because who knows how crazy people can get); but I am certain of this much: the higher the stock market rockets upward on such irrationality, the harder it falls into the chasm of ever-growing debt from which it has been constructed…. There is nothing you’re going to do that can stop the markets (in stocks and bonds) from having their hangover when the bubbly stuff is over and irrational exuberance suddenly looks like delirium. Our greatest economic crashes have always happened when least expected. (“Irrational Exuberance in US Stock Market Grasps at 20K for Dow“)

     

    This past week proves the stock market was irrationally premature in rising to Trump’s stimulus talk. Trump has no possibility of any support from Democrats, who hate his guts on just about everything he stands for, and we have now seen proof that he has no majority support he can count on in his own party.

    This is one major reason I have refused to join those who believe things will and are now turning around economically because of Trump’s election, even though it has probably cost me readers (given that my audience is largely anti-establishment). For Trump’s plans to become reality, he has to build consensus around a plan that can save the economy, and he is far from either consensus or a plan that can save the economy from its fundamental flaws. The best his plan would do — if he could get it enacted — is pump it higher for a little longer. You can accomplish a little bit in the US by executive decree, but not much. Maybe Republicans will now join around a tax plan, but time is not on their side.

    So, my prediction remains that the economy, including the stock market, goes down this year for the numerous reasons I’ve given beyond the solitary reason that has just played out above. He hasn’t even started squaring off with the Democrat’s opposition. This one went down just from the opposition within his own party!

    It’s time to wake up and smell the ammonia!

  • Colonel Shaffer: "I Believe This is Much Worse Than Watergate"

    The noose is tightening Obamafags. While you occupy yourselves by injecting heroin into your scrawny arms at one of your Antifa meetups, AG Sessions is preparing the groundwork to end the legacy of King Obama — sending him barreling towards a scandal far greater than anything Nixon ever did — crushing and poleaxing any hopes of rejuvenating the broken status of the democratic party.

    Here’s Tony Shaffer, former senior intelligence officer at the CIA, saying that the wiretapping scandal against Trump is ‘orders of magnitude’ worse than Watergate — alluding to Bob Woodward’s comments made earlier this week describing the offenses as being ‘felony level’ crimes that might wreak havoc throughout the former Obama administration.

    “This incidental, it’s accidental on purpose.’

    The unmasking of Trump and his cohorts means they specifically targeted him and his team. The political appointees at the CIA, aka black hats, aren’t laughing anymore.

    Meanwhile, continue to bask in your Obamacare victory. I’m certain the people will appreciate it going forward — as it cascades and cracks asunder amidst financial failure in the near term.

    Content originally generated at iBankCoin.com

  • How The Surveillance Program Works, And Who Can Order It: Former Intel Chair Explains

    As the Russians-hacked-the-DNC narrative collapses, and evidence-less accusations of Trump-Putin relations fade fast, the circle of possible culprits behind the one crime that we know for sure that happenedthe leaking of unmasked American's names in intelligence interceptsis narrowing hour by hour.

    Former House intel chair Pete Hoekstra tells Fox Business, who could have ordered the wiretapping of Trump campaign and authorized the unmasking of Americans' names in the intercepts.

    Hoekstra goes on to tell The Wall Street Journal,

    "When I was chairman of the House Intelligence Committee, I was routinely involved in briefings as a member of the "Gang of Eight"—both parties' leaders in the House and Senate and on the intelligence committees. I cannot recall how many times I asked to see raw intelligence reporting and was refused because that stuff is just not made available to policy makers.

     

    But according to Mr. Nunes, such information made its way to the Obama White House before Inauguration Day. Few if any people working in the White House would ever need to see raw intelligence. Like intelligence committee members, they are typically consumers of intelligence products, not raw intelligence.

     

    The raw transcripts of masked persons – or unmasked persons, or U.S. persons who can be easily identified – making their way to the White House is very likely unprecedented. One can only imagine who, at that point, might be reading these reports. Valerie Jarrett? Susan Rice? Ben Rhodes? The president himself? We don't know, and the people who do aren't talking at the moment."

    The point here, as The Washington Examinder writes, assuming again that Nunes spoke truthfully in his presser, is that this could potentially become a huge story. This despite the extremely negative reaction that Nunes got from journalists on Twitter.

    If documents containing the unmasked names of Trump transition members were shared throughout the government, it would really be worrisome, as Nunes said it was. Intelligence agencies are generally supposed to avoid collecting information about Americans to the extent possible. Incidental collection happens, of course, because sometimes Americans talk to people under surveillance. But to share what is incidentally collected, on purpose, seems extraordinary, especially in this case, given Nunes' claims that the disclosures have little or no intelligence value, and that the information involved apparently has nothing to do with Russia or the Trump team's nefarious ties thereto.

    Even if what Trump said in the first place about having his wires tapped is only about 5 percent true (which is to say, it is completely false, but vaguely based on something factual), the story that Nunes outlined has real potential to be a big thing that blows up in the face of at least a few Obama administration officials. Assuming, of course, that Nunes represented the facts accurately.

  • There Will Be Those Who Perish In The Next Crisis, And Those "Who Survive In Underground Luxury"

    Authored by Mac Slavo via SHTFplan.com,

    Ultimately, no one can stop what is coming.

    The haves and have nots of the next, gritty era of aftermath will be those who have the means to survive when the system has failed, and those who do not.

    For the wealthy, and prepper minded elite, hidden fortified layers purchased for insurance will preserve most of the luxuries of life above ground, and in the cities, even as society crumbles and burns to the ground.

    Others, without the means to purchase these luxuries, may have still set aside the necessary materials to live and thrive after a great collapse, where anything and everything from the electric grid, to the fuel supply to the food supply will fail.

    There will be tens of millions of starving, angry and bewildered people who face endangerment and extinction, and there will be a few who succeed not only in planning ahead, but in laying low enough to avoid being noticed and picked off by looters, marauders and misguided authorities.

    Finding the perfect location for your redoubt, and making your preps to get away if need be, amount to something of an art and a science. Nothing is guaranteed, everything has its advantages and disadvantaged, but just by doing anything at all, you’ll be way ahead of the masses.

    If the plans of the elite are anything to consider, they have decked out their bunkers with mementos and reminders of normal life, and not only enough to supplies not to feel the pain of a crumbling infrastructure, but to be distracted by the illusion of normalcy even in times of ultimate crisis.

    But ultimately, all successful redoubts invest in the means to provide for long-term survival and maximum self-sufficiency.

    As Health Nut News reports:

    Most “shelters” include enough food for a year or more, and many have hydroponic gardens to supplement. The developers also work hard to create “well-rounded communities with a range of skills necessary for long-term survival, from doctors to teachers.” (During the 2016 elections, Vivos received a flurry of interest in its shelters from both liberals and conservatives and completely sold out of spaces in its community shelters.)

     

    Many of the interiors are left as a blank slate so that each owner can create what they are looking for in terms of comfort and luxury- and it all comes at a cost. Base models can start at $25,000 and go up to almost $5 million dollars. Their footprints also vary from quaint to 5000 square feet.

    It isn’t just happening in the United States, but all over the world. And while the fastest growing part of this sector clearly caters to the rich and well adjusted, many shelters are also being constructed to house millions of masses during emergencies – at least in places like China, Switzerland and Russia.

    […] The Oppidum, billed as “the largest billionaire bunker in the world.” This top-secret facility, once a joint project between the former Soviet Union and Czechoslovakia (now the Czech Republic and Slovakia), was built over 10 years beginning in 1984. The premiere apocalypse dwelling is a place that billionaires can live out the horrors of the apocalypse- be it zombie or other- in luxury with every amenity you could ever hope for.

     

    […] Retail firm Survival Condos offers refuge at a re-purposed missile silo in Kansas, United States. The luxury apartments here are stacked underground and protected by blast doors designed to withstand explosions. Retail firm Survival Condos offers refuge at a re-purposed missile silo in Kansas, United States. The luxury apartments here are stacked underground and protected by blast doors designed to withstand explosions.”

     

    […] Vivos Europa One, in Rothenstein, is one of Germany’s largest repurposing projects. The 76-acre former Soviet bunker is capable of withstanding a nuclear blast, a direct plane crash or biological attack. It is being transformed into 34 five-star apartments, starting at 2,500 sq ft, which aim to protect the super-rich from any forthcoming apocalypse.

    Self-sustaining communities or networks of individuals can also plan around their budgets to make these concepts a reality. Many companies will customize and scale down projects to costs as low as $25,000… while basic home fortification and DIY applications can be done for much less money.

    In the end, those who prepared when nothing happened are only out what they invested on the principle of having a viable back-up insurance plan.

    But those who didn’t prepare for the worst when it did happen could very quickly lose everything they have, and many will perish during the next major crisis – which could be triggered at this point by almost anything.

  • Priebus, Price Blamed For Healthcare Failure: NYT

    On Friday morning, when it was still unclear if the GOP would round up enough votes to pass the Republican healthcare proposal, we noted that Bloomberg reported that as a “Plan B” contingency plan, Trump was preparing to sacrifice Paul Ryan, to wit “several Trump associates have already laid groundwork to blame the speaker” as well as potentially Reince Priebus.

    Trump’s long-time friend, Newsmax CEO Chris Ruddy was quoted as saying “I think Paul Ryan did a major disservice to President Trump, I think the president was extremely courageous in taking on health care and trusted others to come through with a program he could sign off on. The President had confidence Paul Ryan would come up with a good plan and to me, it is disappointing.” Additionally, Bloomberg quoted a Trump associate who said that White House chief of staff Reince Priebus may also be imperiled.

    One day later, while the fate of Paul Ryan is still to be determined even as he will likely be responsible for setting the framework of Republican tax reform, the NYT confirms that the internal scapegoating has begun and that as hinted yesterday, the blame for the failure to get GOP support for ObamaCare repeal and replace legislation has increasingly fallen on White House chief of staff Reince Priebus and other top administration officials.  Specifically, the Times also reports that the blame for the legislative failure has fallen on Priebus, who was in charge of coordinating an initial plan on ObamaCare repeal with Speaker Paul Ryan, who for now appears to hve avoided Trump’s direct wrath. To wit:

    On Friday evening, a somewhat shellshocked president retreated to the White House residence to grieve and assign blame. He asked his advisers repeatedly: Whose fault was this? … Increasingly, that blame has fallen on Reince Priebus, the White House chief of staff, who coordinated the initial legislative strategy on the health care repeal with Speaker Paul D. Ryan, his close friend and a fellow Wisconsin native, according to three people briefed on the president’s recent discussions.

    Politico’s Tara Palmeri confirms as much:

    //platform.twitter.com/widgets.js

    Health and Human Services Secretary Tom Price was also blamed for the failure, while the president was reportedly annoyed with Jared Kushner, his adviser and son-in-law, who returned to Washington on Friday from a family skiing trip in Colorado.

    Two other republican sources told the Times that Trump expressed annoyance that Kushner was absent during the vital discussions. A White House spokesman, however, denied that Trump was displeased with Kushner, according to CNN, which reported that Trump was “upset” by Kushner’s absence during the pivotal week. Kushner had said for weeks he thought supporting the GOP healthcare plan was a mistake, the Times added citing two sources,

    The report presents a different picture from Trump’s piblic posture, when both in his address to the media and on Twitter on Saturday morning, the president was quick to blame Democrats on Friday after Ryan pulled the GOP plan, repeating on various occasions that “ObamaCare will explode.” Several dozen Republicans had publicly opposed the plan, and Trump asserted that Democrats now “own ObamaCare.” The White House was also publicly supportive of Ryan’s efforts to rally support for the legislation, but West Wing aides told the Times they were “stunned” by the Speaker’s inability to master the politics of the GOP conference.

  • "Policy Error" Is Back: Deutsche Warns Two Things Can Derail The Market's "Most Crowded Trades"

    Following the worst week for stocks since the US election, the reflation trade that was launched by the Trump election now appears solidly dead, with the dollar and commodities sliding, inflation expectations crumbling, and junk bonds – where investor euphoria had reached dramatic proportions – being hit the hardest. As Bank of America commented last Thursday, “the last few weeks we have seen wobbles in high yield; a full 2 months earlier than we anticipated. What began as the expected effects of rate risk on higher quality high yield bled to unexpected lower crude prices and a repricing of the Energy index by 87bp (5.98% to 6.85%) and has further morphed into an early second guessing of the optimism surrounding policy.”

    Shortly after this note, political uncertainty soared when Republicans failed to pass the healthcare bill, leading to questions over the passage of Trump’s tax reform. As explained on Friday, with Obamacare repeal on hiatus indefinitely, Republicans now have to find a $1 trillion offset in budget savings, or else Trump’s tax cut will have to be slashed by a similar cumulative amount: hardly a catalyst to restore confidence in the reflation trade.

    And yet, few are willing to throw in the towel on the most popular trade since November (which recently helped push the S&P to 2,400), and one bank went so far as to say that smooth sailing for Trumpflation remains: as Deutsche Bank’s Dominic Konstam wrote in his latest weekly fixed income piece, “we continue to expect higher yields and a steeper curve driven largely by tax reform and fiscal stimulus. We see scope for the Trump economic agenda to create a sort of “Keynesian accelerator” whereby a positive demand shock could induce greater domestic investment and, ultimately, higher productivity growth.”

    And yet, cracks are starting to appear in this most optimistic of theses, because on the very same page, Deutsche Bank, which has been one of the biggest supporters of the bullish implications of the reflation trade – and has been quite bearish on Treasuries as a result – admits that in addition to Trump, there is another potential source of policy error:

    There are naturally several avenues to policy error.

     

    The first and most prescient at the moment is failure to pass key elements of the Trump administration’s economic policy agenda.

     

    At the time of writing, markets seem inclined to look past the ongoing healthcare debate. The CBO’s scoring of Trumpcare’s savings relative to baseline has fallen from $337 billion to $180 billion, and anyway these “savings” are probably more material in providing a piggy bank to fund vote-winning amendments in the Senate debate than they are for funding corporate tax reform. Risk markets might flinch if Trumpcare fails to pass, but the far bigger deals for markets are tax reform and fiscal stimulus, and the experience of the Clinton administration suggests that an early misstep in healthcare won’t prevent the new administration from pivoting to other business. However, we note that the post election sell-off in bonds seems to presuppose a high probability that the administration will succeed in passing its legislative agenda,  and that the measures will work.

     

    Then there is the Fed. Aggressive hikes will push real yields and the dollar higher, both of which would be negative for commodities, breakevens, and risk more broadly.

     

    The dots tell us that the Fed hopes to get to 2% by the end of 2018, which would put real rates more or less at zero. We still see a strong chance that the Fed “misses” at least one hike priced by the dots along the way this year to take pressure off of real rates, the dollar, and risk assets.

    And while Deutsche Bank heavily hedged its cautious language, it is worth noting that as of the most recent Bank of America fund managers survey, virtually every trader is still on the same side of the Trumpflation trade, with managers themselves admitting that long USD, long banks, short TSYs remain the most crowded trades. That will not be the case for long if the dreaded “deflation monster” makes an appearance soon.

    Furthermore, should sentiment indeed be shifting – as Deutsche Bank’s statement indicates – and should the market begin to reprice the threat of “policy error”, there is a long way to go before all of these massively stretched trades renormalize.

  • Turkish Hackers Threaten To Wipe Millions Of iPhones; Demand Ransom From Apple

    Apple can’t seem to catch a break lately.  Yesterday we noted the latest WikiLeaks release which exposed yet another CIA spying scandal, this time revolving around efforts to bug “factory fresh” iPhones before they even reach the hands of consumers (see “Wikileaks Releases “NightSkies 1.2”: Proof CIA Bugs “Factory Fresh” iPhones“).

    Also included in this release is the manual for the CIA’s “NightSkies 1.2” a “beacon/loader/implant tool” for the Apple iPhone. Noteworthy is that NightSkies had reached 1.2 by 2008, and is expressly designed to be physically installed onto factory fresh iPhones. i.e the CIA has been infecting the iPhone supply chain of its targets since at least 2008.

     

    While CIA assets are sometimes used to physically infect systems in the custody of a target it is likely that many CIA physical access attacks have infected the targeted organization’s supply chain including by interdicting mail orders and other shipments (opening, infecting, and resending) leaving the United States or otherwise.

    Today, courtesy of CIO, we learn that a group of hackers referring to themselves as the “Turkish Crime Family”, has been in direct contact with Apple and is demanding a $150,000 ransom by April 7th or they will proceed to wipe as many as 600 million apple devices for which they allegedly have passwords.

    The group said via email that it has had a database of about 519 million iCloud credentials for some time, but did not attempt to sell it until now. The interest for such accounts on the black market has been low due to security measures Apple has put in place in recent years, it said.

     

    Since announcing its plan to wipe devices associated with iCloud accounts, the group claimed that other hackers have stepped forward and shared additional account credentials with them, putting the current number it holds at over 627 million.

     

    According to the hackers, over 220 million of these credentials have been verified to work and provide access to iCloud accounts that don’t have security measures like two-factor authentication turned on.

    Of course, if credible, with an ask of just $150k, this is the most modest group of hackers we’ve ever come across.

    Powers

     

    News website Motherboard reported seeing alleged emails between the hackers and Apple in which a member of the company’s security team said that the company does not plan to reward cybercriminals for breaking the law and that the communications have been archived and sent to the authorities.

    Meanwhile, the hackers apparently told CIO the ransom demand was intended to “spread awareness” for their ‘boys’ who got caught up in the Yahoo hacking scandal and likely face severe sentences. 

    “We are doing this because we can and mainly to spread awareness for Karim Baratov and Kerem Albayrak, which both are being detained for the Yahoo hack and one of them is most probably facing heavy sentencing in America,” a representative for the group said via email. “Kerem Albayrak on the other hand is being accused of listing the database for sale online.”

     

    The representative said that the group’s members are originally from Istanbul, Turkey, but that they now “rep” Green Lanes, an area in North London.

     

    Karim Baratov, a Canadian national, was indicted last week for allegedly hacking into email accounts at various email providers at the request of two officers from the Russian Federal Security Service, the FSB. The same indictment accuses the two FSB officers and a Russian hacker for breaking into Yahoo’s infrastructure and gaining access to over 500 million Yahoo accounts.

    As a concluding note, and not to suggest in any way that we’re experts on the subject matter, we would tend to question the underlying ‘value’ of a password database that could be rendered instantly useless by a forced password update from Apple…just a thought on negotiating tactics for future reference.

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Today’s News 25th March 2017

  • Alex Jones Acquiesces to Alefantis, Broadcasts Apology to Comet Ping Pong for Covering Pizzagate

    The head conspiracy theorist has surrendered to a cadre of heavy hitting D.C. lawyers, employed by the humble pizza parlor keeper, James Alefantis.

    Earlier this week, Alefantis’ former gay lover, David Brock from Media Matters and Shareblue, suffered a heart attack. Today, Alex Jones had a change of heart, especially in light of recent events that has placed Infowars.com in Facebook’s fake news genre and Adroll refusing to do business with him — likely due to his political leanings and fake news label, placed on him by the leftist media.

    Here’s Jones apologizing several times to James Alefontis and Comet Ping Pong and anyone else he might’ve offended.

    This video is, all of a sudden, trending on Youtube — #28 and rising.

    It’s over.

    Here is one of the more prominent Pizzagaters, David Seaman, responding to Jones’ apology.

    Content originally generated at iBankCoin.com

     

  • Watch These Geopolitical Flashpoints Carefully

    Authored by Brandon Smith via Alt-Market.com,

    Anyone who has been involved in alternative geopolitical and economic analysis for a decent length of time understands that the establishment power structure thrives according to its ability to either exploit natural crises, or to engineer fabricated crises.

    This is not that hard to comprehend, but for some reason there are a lot of people out there who simply assume that global sea-change events just happen “at random,” that the elites are stupid or oblivious, and that all outcomes are a matter of random chance rather than being directed or manipulated.  I call these people “intellectual idiots,” because they believe they are applying logic to every scenario but they are sabotaged by an inherent bias which causes them to deny the potential for “conspiracy.”

    To clarify, their logic folds in on itself and becomes faulty.  They believe themselves objective, but they abandon objectivity when they staunchly refuse to consider the possibility of covert influence by organized special interests. When you internally dismiss the possibility of a thing, no amount of evidence will ever convince you of its reality.  This is how the “smartest” people in the room can end up being the dumbest people in the room.

    In the survivalist community there is a philosophy – there is no such thing as a crisis for those who are prepared. This is true for prepared individuals as much as it is true for prepared communities and prepared nations. The only way a society can fall is when it becomes willfully ignorant of potential outcomes and refuses to organize against them.

    By extension, it would make sense that by being prepared for a particular crisis or outcome an individual or group could not only survive, but also profit. It is not crazy or outlandish to entertain the idea that there are groups in power (perhaps for many generations) that aggressively seek to predict or even force particular outcomes in geopolitics for their own profit. And, by profit, I do not necessarily mean material wealth. In many cases, the power of influence and psychological sway over the masses might be considered a far greater prize than money or property.

    You can buy slaves or purchase the means to make demands of people at gunpoint, but you cannot put a price on fealty or adoration. This is what establishment elites ultimately want – voluntary servitude from the populace. They want us to beg for their leadership rather than begrudgingly accept it under threat.

    To this end, a Hegelian model of problem – reaction – solution is required. You cannot influence people to volunteer for servitude and submission unless they are sufficiently terrified of the alternative.

    The globalists tend to use what I call a “scattershot effect” when it comes to creating or managing chaos. They set the stage for multiple flashpoints around the world and wait to see which of them works and which of them fails. If you have enough of these flashpoints in place, statistically there is a high probability that at least some of them will succeed. We saw this in obvious form a few years ago when covert intelligence agencies instigated the “Arab Spring” insurgencies in Libya and Egypt among other nations, along with the funding and training of terrorist groups in Libya and Jordan that went on to become ISIS in Syria and Iraq, and at nearly the same time we had elitist lapdogs like John McCain in both Syria and Ukraine helping to foment unrest and civil war.

    All of these engineered events created a wave of global instability that exists to this day. Not only this, but one successfully executed flashpoint has the ability to give birth to dozens of new flashpoints. They tend to spread, like a cancer.

    That said, some flashpoints are more dangerous than others.  Here are just a few of the events I consider the most volatile right now.

    U.S. Debt Ceiling Battle Ahead?

    I realize we have seen this many times in the past eight years under the Obama administration; extreme media hype over possible conflict between Republicans and Democrats in extending the ongoing debt ceiling problem for another couple of months or another couple of years. In every instance, Republicans feigned attempts to reduce government spending and then rolled over to extend. The entire fight was purely theatrical and likely meant to distract the public.

    However, in this instance, certain elements are very different.

    With the deadline of March 15th crossed, the clock is ticking on remaining funds and “extraordinary measures” designed to stretch the federal budget until a vote on a debt ceiling extension can take place. Funds are predicted to last perhaps until this fall. Treasury Secretary Steven Mnuchin, a Goldman Sachs alumni, has of course asked congress for a quick vote to raise the ceiling.  This is rather counter to Donald Trump’s original position that constant national debt increases are “embarrassing” to Republicans.

    Given, it is not Trump’s fault that he inherits the most massively inflated liability bubble in U.S. history after Barack Obama nearly doubled the national debt during his tenure (an incredible feat, to be sure). But, this does not change the reality that the U.S. is far beyond its means to balance the budget or maintain the current level of spending. And, I would remind everyone that the official debt does not even including the trillions in ongoing costs associated with entitlement programs or social security.

    With U.S. debt at a breaking point, it would seem prudent to institute considerable spending cuts. Of course, where those cuts are applied may become the excuse needed to drive the debt ceiling debate into crisis this time around.

    I am not at all surprised that Democratic senate minority leader Chuck Schumer has recently vowed to throw the debt ceiling talks into disarray if Trump continues to pursue a rollback of Obamacare, the building of the southern border wall, or the defunding of Planned Parenthood. Schumer has specifically warned of a government shutdown designed to prevent the Trump administration from instituting such policies.

    So, you can see why this particular debt ceiling fiasco might be different. With Trump in office, establishment elites do have a perfect opportunity to sow fiscal chaos and scapegoat conservatives in the process. Whether they will follow through or not remains to be seen…

    North Korean Wildcard Returns?

    They’re baaaaaaaack! Yes, North Korea pops up out of the geopolitical ether every two-three years or so to flood the mainstream media with headlines of apocalypse. Every new missile advancement or rocket test by Pyongyang conjures images of ICBMs and mushroom clouds. North Korea appears to be the globalist “ace in the hole” at times. If they ever need a war, North Korea is more than happy to oblige. If they ever need a villain to place at the forefront of a false flag terrorist attack, North Korea is a perfect candidate. And, with North Korea’s “unique” relationship with China, the diplomatic situation and potential for widespread conflict becomes even more tenuous.

    Like the debt ceiling, we have seen numerous instances of heightened tensions with North Korea fizzle out, overblown by the MSM and the Pentagon, perhaps to remind the world why we should continue to be afraid. That said, again, this time feels different.

    Secretary of State Rex Tillerson has stated quite blatantly that pre-emptive strikes against North Korea are immediately on the table. Meaning, the mere hint of a threat, whether real or imagined, could be used as a rational to strike kinetically. Not economically, or diplomatically, but a full bore shooting war.

    Do I think this is possible? This time, yes, more than ever before. If Trump is to be used by the establishment as a scapegoat for collapse as I predicted long before his election, then a situation must occur in which overt military force abroad and at home is solidified. War is the smokescreen by which terrorism, whether real or state sponsored, flourishes.  Martial law being the inevitable result. War can also be blamed for an economic crisis that was already many years in the making. And, war strains and destroys diplomatic ties with peripheral nations, causing more economic distress.

    A conflict with North Korea does offer the globalists a perfect petri dish for directed chaos.

    Oil Market Crash Returns?

    There are many economic analysts out there that are still waiting for an oil market “crash,” and it is baffling to me why they have not realize that the crash in oil markets has already happened. American oil consumption has been falling off the map since 2008. Projections of oil usage made by the Energy Information Administration have been way off the past several years.  Global increases in demand are also stalling.

    While the mainstream media and OPEC hyperfocus on supply and production, the real culprit behind the global oil glut is something that they do not want to address – collapsing consumption. This is why, despite OPEC oil cuts (if they are legitimate), prices have remained static and are now falling once again. Add to this the reality that certain producer nations have been lying about the level of cuts instituted, and yet another oil market reversal will take place.

    The initial oil price collapse from over $100 per barrel to around $30 per barrel was an incredible crash, yet no one seems to want to call it a crash.  Today, the price of around $50 a barrel is barely enough for the industry to break even in most cases. As I have been warning since last year, the $20 jump is temporary. OPEC cuts are minimal, if they are even being implemented at all, and demand continues to falter. Slow consumption plus inadequately adjusted production equals price deflation. There is no way around this fact.

    Why does oil matter?  This should be apparent to most people, but the stability of entire nations and regions relies heavily on the stability of the oil market.  In particular, the U.S. dollar’s world reserve status is tied inexorably to the fact that it is also the petro-currency. Oil market chaos will no doubt lead to a dump of the dollar itself. In fact, the last time oil fell into the $30 per barrel range, Saudi Arabia openly threatened to begin efforts to decouple from the dollar and shift into a basket of currencies as a means for international oil trade.

    The mainstream media tried to bury this story as “empty posturing,” and I think many MSM economists are actually stupid enough to believe that Saudi Arabia dropping the dollar as the petro-standard is inconsequential. What they do not consider is that where Saudi Arabia goes, most other oil producers will follow.

    The U.S. economy cannot survive without the dollar’s world reserve status, and by extension its petro-status. A dump of the dollar by OPEC nations would be absolutely devastating. This is why I highly suggest people take note of oil prices carefully this year, and not underestimate their importance to the wider geopolitical picture.

    Resurgence Of Terrorism?

    In my article 'Globalists Want To Destroy Conservative Principles – But They Need Our Help', I predicted increasing terrorist attacks over the course of the spring in Europe and the US.  I have also recently predicted that if there is a resurgence of terrorism in the EU, Marine Le Pen will win the French presidency.  So far there have been multiple small attacks in France, sporadic riots throughout the EU, and now the latest murders outside the UK Parliament.  Such attacks have not yet been sparked again in the U.S., but I still expect that these events will increase before summer.

    Terrorism in itself does not necessarily represent a "geopolitical flashpoint" unless we are talking about something on the scale of 9/11, but it does tend to act as a building catalyst for other major government and social shifts.  The rise of what the globalists call "populism" (their favorite scapegoat now for every crisis under the sun including crises that have been gestating for nearly a decade) could be directly linked in part to the forced mass immigration programs in the EU and the U.S., as well as expanding terrorism.  Every attack will bring certain western nations ever closer to a more nationalist government.

    As this process continues, the danger of globalists and central banks pulling the plug on stock market support surges.  From terrorism, to populism to economic collapse – this is the narrative that the public will be sold in the near future.  It is a narrative that could scar the world for generations to come if we do not continue to expose the REAL internationlist culprits behind our ongoing fiscal instability.

    Standing Watch

    Whenever any alternative analyst writes an article concerning threat assessment, we fully expect that some dimwits out there will jump to the accusation of “doom and gloom.” I’m not sure that anyone really takes them seriously, but let’s think critically for a moment, shall we?

    Civilization is fragile and finite. It always has been and most likely always will be. The continuation of peace and stability, even at a micro-level such as a neighborhood or a town, requires vigilance and preparedness. Governments spend billions on think-tanks and working groups whose sole function is threat assessment. They might only be assessing threats to the power elite and not the citizenry, but they exist all the same. No one accuses these think tanks of “doom and gloom” whenever they present an analysis that is not the most optimistic.

    I hardly see how it is logical to deny the common public the right to our own “think-tanks,” or to be skeptical of our current “stability.” The fact of the matter is, alternative analysts (myself included) have been proven right time and time again in our predictions and warnings, all while mainstream analysts regurgitating endless false optimism have been proven indelibly wrong. We do not promote “doom and gloom.” We present reality.

    Great social and political changes never happen in a vacuum. There are always triggers and warning signs.  Sometimes these events are naturally occurring, sometimes they are created. In either case, to stay watchful and mindful is pure common sense. This does not mean we need to be in a state of constant panic. On the contrary, as I mentioned in the beginning of this article, the prepared have no need to panic.

  • Here Are The Reasons Why Today's Republican Debacle Makes Tax Reform Less Likely

    With Americans now “stuck with Obamacare for the foreseeable future“, attention shifts to Trump’s next agenda item: tax reform.

    This was confirmed by none other than the President himself who moments ago said that “Republicans will probably work on tax reform now.” To be sure, following today’s embarrassing fiasco, Trump will be eager to move on to a law which will be easier to pass, and according to market consensus, tax reform is precisely that. Alas, consensus may once again be wrong.

    Ignoring the fact that work on tax reform in earnest won’t start for 6-8 weeks as House Ways and Means member Merchant said moments ago, and may not even take place until fiscal 2018 (after August), the reality is that since Obamacare and tax reform are both parts of the Reconciliation process, as a result of not freeing up hundreds of billions from the deficit that the CBO estimated repealing Obamacare would do, it means that Trump’s tax cuts have been hobbled – by as much as $500 billion – before even starting.

    Furthermore, with the Freedom Caucus flexing its muscle and openly defying Trump, another major headache for Trump’s tax reform is that the Bordere Adjustment Tax – an aspect of the reform that the Caucus has been vocally against – is likely off the table. And since BAT was expected to generate over $1 trillion in government revenues, it means that a matched amount in tax cuts is also now off the table.

    In summary, between Obamacare repeal and BAT being scrapped, roughly $1.5 trillion in budget “buffers” are wiped out.

    And yet, when news hit that Obamacare repeal has failed, stocks surged, arguably on traders’ belief that this will accelerate tax reform. Alas, in addition to the above, Axios lists another four reasons why today’s healthcare debacle spells trouble for tax reform.

    • We now know that Congressional Republicans are willing to buck Trump and leadership on big-ticket legislative items.
    • Republicans will need to keep working on healthcare reform, even though Trump says that he’s done with it. They’ve campaigned for years on killing Obamacare, and can’t head into the mid-terms without giving it another go. Particularly when they keep insisting that the current scheme is collapsing?
    • CBO said that the Republican healthcare bill would shrink long-term budget deficits by hundreds of billions of dollars. Without it, filling the tax revenue hole becomes harder.
    • Sean Spicer today said repeatedly that Trump had talked to “everyone” and listened to “all” ideas, which reflects zero consideration of Congressional Democrats. If such sentiment persists ? it just raises the degree of difficulty for tax reform, particularly if the White House doesn’t change its position on keeping corporate tax reform tied to personal tax reform.

    Finally, here is Goldman’s persepctive. Despite the realities above, Jan Hatzius is his typically optimistic self about the potential for Trump’s agenda.

    Preliminary discussions on tax reform could begin soon but we do not expect legislative action on tax reform until June. This week’s events do not change our expectation that tax legislation will be enacted within the next year and actually suggest that enactment could come slightly sooner than we previously expected.

     

    1. The American Health Care Act (AHCA) has no path forward for now. House Republicans appear unable to reach a consensus on any bill to repeal the Affordable Care Act (ACA, or “Obamacare”); we believe reaching a consensus among Senate Republicans would have been even more difficult in any case. This would appear to signal an end to the Republican effort to repeal the Affordable Care Act (ACA). That said, addressing health care in some way will be politically necessary, so we do expect health legislation to be considered again at some point later this year or next year.

     

    2. Other issues must be addressed before Republican leaders can shift their full focus to tax legislation. The Senate is expected to consider the nomination of Judge Neil Gorsuch to the Supreme Court the week of April 3, which raises the risk of a Democratic filibuster, which Republicans might counter with a controversial rules change (the so-called “nuclear option” for Supreme Court nominations). Following a two-week recess, Congress will return the week of April 24 to consider extending spending authority, which expires April 28; inclusion of funding for the President’s proposed border wall would raise the risk of a government shutdown.

     

    3. Congress will also need to address the FY18 budget resolution before it can act on tax reform. This is necessary to provide the “reconciliation instructions” that allow Republicans to pass tax legislation with only 51 votes in the Senate (and therefore no Democratic support). As we have noted before, reaching an agreement on the FY budget resolution will not be easy; in the past, conservatives have demanded a balanced budget within ten years but this would require endorsing spending cuts (in non-binding form) that some centrist Republicans might oppose.

     

    4. Tax reform will probably not begin to move through the legislative process until June. In light of the other issues described above, we would not expect the House Ways and Means Committee to vote on a tax reform bill until late May (less likely) or June (more likely). The Committee is unlikely to release a detailed proposal until they are ready to vote, so details regarding the House proposal may not be known for at least another two months or so.

     

    5. Enactment of tax legislation looks just as likely as it did before this week. The health bill faced much different challenges than tax legislation will face. While the health bill would have reduced benefits (tax credits and Medicaid eligibility) and the deficit, the tax bill is likely to provide new benefits (tax cuts) and will probably increase the deficit. Ultimately, we believe that there will be broad support among Republicans in Congress for legislation that reduces the corporate tax rate and cuts personal taxes modestly.

     

    6. However, the defeat of the health bill indicates that complex and controversial tax reforms are likely to be difficult to pass and we note that the “Freedom Caucus” that opposed the health bill also opposes some of the most controversial aspects of the House Republican tax blueprint, like the border-adjusted tax (BAT). This suggests congressional Republicans might scale back their ambitions on tax reform, and pursue a simpler tax cut that includes selected reform elements (e.g. changes to the taxation of foreign profits of US multinationals and profit repatriation).

     

    7. The timing on tax legislation might be pulled slightly forward. Compared to our prior expectation that a tax bill would not be enacted before Q4 2017 and could easily slip to early 2018, with the health issue no longer in play, our central expectation remains that it will be enacted in Q4 2017. However, the risk to that timing now appears more evenly balanced, since there no longer appears to be a risk that the health debate will drag out for several more months.

    However, if today’s events are any indication (and weighting item 6 above more heavily than Goldman), don’t hold your breath for a law being concluded this calendar year.

  • China Bans Buying Of Hong Kong Property On Credit Cards

    In China's latest effort to control capital flight, authorities have banned Chinese citizens from buying property in Hong Kong using their credit cards.The use of Chinese credit cards to pay for a portion of property transactions is widespread in Hong Kong.

    Willy Liu, chief executive of local real estate agent Ricacorp, said 15-20 per cent of new property buyers were mainland Chinese. The majority use UnionPay cards to pay for 5 per cent of the home price as a mortgage deposit in Hong Kong. Most of those transactions are worth at least HK$500,000 ($64,371), Mr Liu said, surpassing the $50,000 annual limit for personal foreign exchange imposed by China’s regulators.

    UnionPay cards have been a common conduit for mainland Chinese to move cash offshore, and the company has sought to shutter those channels. In October, it said it had barred the use of its credit and debit cards to purchase investment-linked insurance products.

    And so, as The FT reports, Beijing has stepped up curbs on capital flight by banning this use of cards for real estate deals

    UnionPay, China’s sole clearing house for bank card transactions, told property agents in the city that customers would no longer be allowed to swipe their cards for real estate transactions.

     

    “It is strictly prohibited to use a UnionPay card issued in Mainland China for cross-border acquisition of property”, UnionPay said on Friday.

     

    The crackdown by the state-controlled company comes as regulators grow anxious over the level of China’s foreign exchange reserves, which in January dipped below $3tn for the first time in five years.

    Finally, while this is yet another effort by Chinese authorities to control capital flight (which we note seems to be something the Chinese are absolutely desperate to do, while western mainstream media keeps pumping the Chinese investment, growth narrative), it also seems like a common-sense cap of the madness of Chinese trend-following crowds.

  • Trump On What Happens Next: "Obamacare Will Explode"

    After the Republican ObamaCare replacement bill failed to generate enough Republican support to pass a House vote Friday, President Trump announced his planned path forward: “Let ObamaCare explode.” 

    Having insisted there is no Plan B in case the bill failed, the White House found itself in a situation with no backup plan now. “We’re going to go back and figure out what the next steps are,” House Speaker Paul Ryan told reporters at a press conference just minutes after the shocking news that the GOP was pulling the bill hit the wires. Ryan called the failure of his bill “a setback, no two ways about it.” Looking forward, Ryan said Obamacare is “going to remain the law of the land until it’s replaced. We didn’t have the votes to replace this law. So yeah, we’re going to be living with ObamaCare for the foreseeable future.”

    A disappointed and embarrassed House Energy and Commerce Committee chairman Greg Walden was blunt with reporters: “This bill’s done.”

    In a statement to the media, Trump said that if things get bad enough, Democrats will come aboard the reform effort. At that point, Trump said, it will become possible to pass a bill even better than Ryan’s. “They’re going to reach out whenever they’re ready.”

    Until then, Trump said that “we were very close and it was a very, very tight margin. We had no Democrat support. We had no votes from the Democrats. They weren’t going to give us a single vote so it’s a very difficult thing to do.”

    Putting a positive spin on events, Trump then said that “I’ve been saying for the last year and a half that the best thing we can do politically speaking is let ObamaCare explode,” Trump said of the path forward. “It is exploding right now. Many states have big problems, almost all states have big problems. I was in Tennessee the other day and they’ve lost half of their state in terms of an insurer. They have no insurer. And that’s happening to many other places.”

    “I was in Kentucky the other day and similar things are happening,” he continued. “So, ObamaCare is exploding with no Democrat support. We couldn’t quite get there with just a very small number of votes short in terms of getting our bill passed.”

    “People will see how bad it is and it’s getting much worse,” Trump added. “I said the other day when President Obama left, ’17, he knew he wasn’t going to be here. ’17 is going to be a very bad year for ObamaCare, very, very bad. You’re going to have explosive premium increases and your deductibles are so high people don’t even get to use it.”

    “But we’re very, very close,” he said. “And, again, I think what will happen is ObamaCare, unfortunately, will explode.”

    Trump also said the losers from Friday’s failed vote are Democrats. “The losers are Nancy Pelosi and Chuck Schumer because now they own ObamaCare,” Trump said. “They own it, 100 percent own it. And this is not a Republican health care, this is not anything but a Democrat health care, and they have ObamaCare for a little while longer until it ceases to exist, which it will at some point in the near future.”

    Pelosi did not agree and called today’s aborted ObamaCare repeal a “great day for our country.”  “What happened on the floor,” she said, “is a victory for the American people.”

    “I don’t know what else to say other than ObamaCare is the law of the land,” Ryan told reporters late Friday. “It’s going to remain the law of the land until it’s replaced. We didn’t have the votes to replace this law. So yeah, we’re going to be living with ObamaCare for the foreseeable future.”

  • Russophobia – Symptom Of US Implosion

    Authored by Finian Cunningha, via The Strategic Culture Foundation,

    There was a time when Russophobia served as an effective form of population control – used by the American ruling class in particular to command the general US population into patriotic loyalty. Not any longer. Now, Russophobia is a sign of weakness, of desperate implosion among the US ruling class from their own rotten, internal decay.

    This propaganda technique worked adequately well during the Cold War decades when the former Soviet Union could be easily demonized as «godless communism» and an «evil empire». Such stereotypes, no matter how false, could be sustained largely because of the monopoly control of Western media by governments and official regulators.

    The Soviet Union passed away more than a quarter of a century ago, but Russophobia among the US political class is more virulent than ever.

    This week it was evident from Congressional hearings in Washington into alleged Russian interference in US politics that large sections of American government and establishment media are fixated by Russophobia and a belief that Russia is a malign foreign adversary.

    However, the power of the Russophobia propaganda technique over the wider population seems to have greatly diminished from its Cold War heyday. This is partly due to more diverse global communications which challenge the previous Western monopoly for controlling narrative and perception. Contemporary Russophobia – demonizing Russian President Vladimir Putin or Russian military forces – does not have the same potency for scaring the Western public. Indeed, due to greater diversity in global news media sources, it is fair to say that «official» Western depictions of Russia as an enemy, for example allegedly about to invade Europe or allegedly interfering in electoral politics, are met with a healthy skepticism – if not ridicule by many Western citizens.

    What is increasingly apparent here is a gaping chasm between the political class and the wider public on the matter of Russophobia. This is true for Western countries generally, but especially in the US. The political class – the lawmakers in Washington and the mainstream news media – are frenzied by claims that Russia interfered in the US presidential elections and that Russia has some kind of sinister leverage on the presidency of Donald Trump.

    But this frenzy of Russophobia is not reflected among the wider public of ordinary American citizens. Rabid accusations that Russia hacked the computers of Trump’s Democrat rival Hillary Clinton to spread damaging information about her; that this alleged sabotage of American democracy was an «act of war»; that President Trump is guilty of «treason» by «colluding» with a «Russian influence campaign» – all of these sensational claims seem to be only a preoccupation of the privileged political class. Most ordinary Americans, concerned about making a living in a crumbling society, either don’t buy the claims or view them as idle chatter.

    Kremlin spokesman Dmitry Peskov this week dismissed the Congressional hearings into alleged Russian interference in US politics. He aptly said that US lawmakers and the corporate media have become «entangled» in their own fabrications. «They are trying to find evidence for conclusions that they have already made», said Peskov.

    Other suitable imagery is that the US political class are tilting at windmills, chasing their own tails, or running from their own shadows. There seems to be a collective delusional mindset.

    Unable to accept the reality that the governing structure of the US has lost legitimacy in the eyes of the people, that the people rebelled by electing an outsider in the form of business mogul-turned-politician Donald Trump, that the collapse of American traditional politics is due to the atrophy of its bankrupt capitalist economy over several decades – the ruling class have fabricated their own excuse for demise by blaming it all on Russia.

    The American ruling class cannot accept, or come to terms, with the fact of systemic failure in their own political system. The election of Trump is a symptom of this failure and the widespread disillusionment among voters towards the two-party train wreck of Republicans and Democrats. That is why the specter of Russian interference in the US political system had to be conjured up, by necessity, as a way of «explaining» the abject failure and the ensuing popular revolt.

    Russophobia was rehabilitated from the Cold War closet by the American political establishment to distract from the glaring internal collapse of American politics.

    The corrosive, self-destruction seems to know no bounds. James Comey, the head of the Federal Bureau of Investigation, told Congress this week that the White House is being probed for illicit contacts with Russia. This dramatic notice served by Comey was greeted with general approval by political opponents of the Trump administration, as well as by news media outlets.

    The New York Times said the FBI was in effect holding a «criminal investigation at the doorstep of the White House».

    Other news outlets are openly airing discussions on the probability of President Trump being impeached from office.

    The toxic political atmosphere of Russophobia in Washington is unprecedented. The Trump administration is being crippled at every turn from conducting normal political business under a toxic cloud of suspicion that it is guilty of treason from colluding with Russia.

    President Trump has run afoul with Republicans in Congress over his planned healthcare reforms because many Republicans are taking issue instead over the vaunted Russian probe.

    When Trump’s Secretary of State Rex Tillerson was reported to be skipping a NATO summit next month but was planning to visit Moscow later in the same month, the itinerary was interpreted as a sign of untoward Russian influence.

    What makes the spectacle of political infighting so unprecedented is that there is such little evidence to back up allegations of Trump-Russia collusion. It is preponderantly based on innuendo and anonymous leaks to the media, which are then recycled as «evidence».

    Devin Nunes, the ranking Republican on the House Intelligence Committee, said earlier this week that he has seen no actual evidence among classified documents indicating any collusion between the Trump campaign team and the Russian government.

    Even former senior intelligence officials, James Clapper and Michael Morell who are no friends of Trump, have lately admitted in media interviews that there is no such evidence.

    Yet, FBI chief James Comey told Congress that his agency was pursuing a potentially criminal investigation into the Trump administration, while at the same time not confirming or denying the existence of any evidence.

    And, as already noted, this declaration of open-ended snooping by Comey on the White House was met with avid approval by political opponents of Trump, both on Capitol Hill and in the corporate media.

    Let’s just assume for a moment that the whole Trump-Russia collusion story is indeed fake. That it is groundless, a figment of imagination. There are solid reasons to believe that is the case. But let’s just assume here that it is fake for the sake of argument.

    That then means that the Washington seat of government and the US presidency are tearing themselves apart in a futile civil war.

    The real war here is a power struggle within the US in the context of ruling parties no longer having legitimacy to govern.

    This is an American implosion. An historic Made-in-America meltdown. And Russophobia is but a symptom of the internal decay at the heart of US politics.

  • US Debt of $20 Trillion Visualized In Stacks Of Physical Cash

    The faith and value of the US Dollar rests on the Government’s ability to repay its debt.

    $20,000,000,000,000 is a number so large that it is beyond comprehension for most.

    And so here it is stacks of dollar bills…

    Just remember “the money in the video has already been spent.”

  • Why Precious Metals Will Protect Wealth During The Global Energy Collapse

    SRSrocco

    By the SRSrocco Report,

    There will be very few assets worth owning when the “Energy Collapse” begins in earnest.  Precious metals will be one of the few assets that will protect wealth as the U.S. and global oil industry disintegrates.

    I had the pleasure of being interviewed by Doug and Joe Hagmann
    about the upcoming energy collapse at what that will look like in the
    future.  Very few people truly understand how bad the situation will
    become as the low oil price continues to gut the U.S. and global oil
    industry.  Oil is the lifeblood of our economy.  In addition, a
    significant portion of the coal we use to generate electricity to power
    homes and business is transported by trucks constantly running up and
    down the interstates and highways.

    http://www.youtube.com/v/mbuKtVo2NI8

    LINK HERE: https://www.youtube.com/watch?v=mbuKtVo2NI8

    I explained in the interview that 99% of investors have their wealth in
    Stocks, Bonds and Real Estate.  These three assets will collapse along
    with the disintegration of the U.S. and global oil industries.  The
    reason physical gold and silver will protect wealth is because they are
    stores of “Economic Energy”, while Stocks, Bonds & Real Estate are
    “Energy IOU’s.”

    Lastly, if you haven’t checked out our new PRECIOUS METALS INVESTING section or our new LOWEST COST PRECIOUS METALS STORAGE page, I highly recommend you do.

    Check back for new articles and updates at the SRSrocco Report.

  • Canada Passes 'Blasphemy' Bill To Silence Critics Of Islam

    Despite polls showing that 71% of Canadians would not have voted for the measure, Canada's Parliament, with the strong backing of Justin Trudeau's Liberal government, passed a motion this week 201 to 91 that critics say singles out Islam for special protection. Tabled by Muslim liberal MP Iqra Khalid, M-103 urges the federal government to “condemn Islamophobia” and to “develop a whole-of-government approach to reducing or eliminating systemic racism and religious discrimination including Islamophobia.” The term “Islamophobia” is nowhere defined in the motion.

    A petition on CitizenGo asking MPs to stop the “restrictive ‘anti-blasphemy’” motion has been signed by 79,500 people.

    “This motion will encourage legislation that would criminalize speech deemed ‘islamophobic’ and lay the groundwork for imposing what is essentially a Sharia anti-blasphemy law on all of Canada,” the petition states.

     

    "If that happens, criticism of Islam would constitute a speech crime in Canada,” it states, adding that this “kind of content-based, viewpoint-discriminatory censorship is unacceptable in a Western liberal democracy.”

    As LifeSiteNews reports, while the motion does not change existing laws or create new ones, it empowers a committee to study the issue of “eliminating…Islamophobia” and the federal government to collect data on Islamic ‘hate crimes’ for further study.

    A Conservative alternative to the motion that condemned racism and discrimination against Muslims, Jews, Christians, and other religious groups — without including the word “Islamophobia” — was defeated by the Liberals in February. Liberals argued at that time that the Tories were simply trying to “water down” the very purpose of M-103, reported Huffington Post.

     

    A number of Conservatives running for the the party's leadership have been outspoken about the problems they see in M-103.

     

    Brad Trost said he could not support the motion because it “will only serve to strengthen extremist elements within the Muslim community itself that seek to preserve and promote their own form of hate and intolerance.” He added that any “serious plan to combat religious discrimination in Canada should include all faith groups, including Christians and Jews.”

     

    Pierre Lemieux said that Canadians should be wary of the language in the motion.

     

    “Do you have a valid concern about Islam? Do you disagree with Sharia Law? Uneasy about radical Islamic terrorism? The Liberals may very well classify you as Islamophobic,” he wrote in an email to supporters.

     

    Lemieux, who called on supporters to pressure MPs to force a recorded vote on M-103, called it a “great day for accountability and for freedom of speech in Canada” when almost two dozen MPs stood up on Tuesday to demand such accountability.

     

    Leadership contender Andrew Scheer also added his voice of opposition to the motion shortly before the vote, saying that it “could be interpreted as a step towards stifling free speech and legitimate criticism” of Islam.

     

    M-103 is not inclusive. It singles out just one faith. I believe that all religions deserve the same level of respect and protection,” he wrote in an email to supporters.

     

    “I will be voting against it because I believe in Freedom of Speech,” he wrote.

    Finally, we leave it to Rebel Media's Faith Goldy to react to this attack on Canadians' most precious freedom– the freedom of speech

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Today’s News 24th March 2017

  • Six Dangerous Leftist Concepts

    Authored by ReturnOfKings.com via The Burning Platform,

    The left is intrinsically conflict-mongering. It always existed against a particular state of thing, whether real or fantasized. Early on, though, it dissimulated its conflictive essence by posing as positive or “progressive.” To this end, generations of leftists twisted language to give themselves a good appearance whereas the enemy-of-the-day looked to everyone like something really bad.

    Eighteenth century libertines claimed to defend “freedom” while faith became “fanaticism” and “superstition.” Later ones came across as “intellectuals” or siding with “the people.” Some manipulated the proclivity to empathy to pretend they were “oppressed” and thus entitled to sympathy when they were actually hateful, anti-middle-class Marxist or deviant family-hating lesbians.

    The whole theory of “progress” as one can find it in Marx—society ought to go from capitalism to an ideal communist society—is little more than wishful thinking, yet it worked tremendously for leftists eager to cast themselves into a self-favoring view of history. Marxist “progress” has been used to kill millions of innocent people, just like globalist or cultural Marxist “progress” serves to destroy white homelands. As long as people are entrapped into positive words masquerading and fostering grim realities, Leftism retains its grip over their minds.

    Here are some pseudo-positive concepts or buzzwords that are actual ploys for sinister projects.

    1. Equality

    Perhaps the most massive totem pole of it all. Written, shouted, used as a talisman an indefinite number of times, “equality” has been put forth to justify various mass killings from eighteenth century terror to twentieth century Bolshevism, and closer to us served to unleash female hypergamy and alien millions of young straight-white-males from the societies they should belong in.

    Equality exists in mathematics. A number can be equal to another because an abstract unit can be replaced with another abstract unit without change. Mathematical equality exists because abstract units are identical with each other. Outside from the realm of pure quantity, qualitative differences emerge, and thus equality ought to be defined negatively as the absence of difference both in quantity and quality.

    It is easy to see that equality between individual beings—not numbers—is a fiction, an attempt to perceive individuals as abstractions or numbers, void of any quality, personality or specificity. Equalitarianism stems from a rather incomplete view of the beings it pretends to apply to, and gets quickly used as a mask for envy or the will to grab something or exert power over someone.

    Although equality can enter into the definition of true justice as equanimity—see Aristotle’s Nicomachean Ethics, quote—, more than often, the word is used to foster particular interests at the expense of the wider social equilibrium, to fan the flames of division and sedition, and later, to deny vocations, human biodiversity, complementarity as it implies differences in nature and functions, not to mention ugly tradeoffs where some manipulative group plays the victim or claims rights to what doesn’t belong to them.

    2. “Social” “justice”

    Are you a victim? Are you victim of a particular inequality? Then you are living an injustice, and this wrong ought to be compensated. This simple framing has been widely used by anti-white, anti-male, anti-Western leftists to create a feeling of victimhood among various social categories. They used this powerful feeling to mount new social identities, inspired from Marxist classes—feminism isn’t about femininity but about women identifying as a separate, adversarial group, whose interests would be antagonistic to men’s—, and perpetual charges hung over the majority’s heads—reyciss! Sexiss! And so on.

    “Social justice” covers a blending of several features: an accusatory, anti-white, anti-male, anti-Western narrative, that taints and darkens past history; a feeling of victimhood and class identity for so-called “minorities” integrated into the wider narrative; the systematic, and very real, disenfranchisement and displacement of the majority that finds itself condemned to play the role of the bad guy—and hence charged—in said narrative. In this sense, “social justice” is deeply divisive, defamatory, aggressive, and amounts to a Moloch that eats families, nationhood, and most men.

    Actual justice, call it social or not, is of course far from such a terrible conception. Methinks true justice should acknowledge the fact that we are the sons of the Western civilizations, its human substance and legitimate heirs, and that we have a prime right over it. We should have jobs, freedom of speech, protection over violent crowds, a right to fair judgment instead of getting screwed over by HR, “minority” impunity and pussy pass, a right to chances to thick relationships with at least some women instead of clowning our ways through hypergamy… Don’t forget we need to formalize at least some of our intuitions about what’s fair or not to replace the wicked theory of “justice” the Left shatters us with.

    3. “Progress” (and the “reactionaries”)

    This overrated buzzword has been straightforward long ago. Its Latin root, progressus, stems from the root verb gradior (walk, advance) and was mostly used in a military context, as in the sentence “the army is progressing into enemy territory.” Since then, it has been used analogically to qualify any advancement, even purely relative or fantasised ones.

    The Left, following pompous Philosophes and Marx, enshrined its own notion of progress into a general theory of history, thus making it absolute rather than relative. When various strands of modernity clash—for example, individual freedom and collective well-being—, which one is “progressive”? Each can be used to fulfill a particular notion of progress. Aside perhaps from blatant technological breakthroughs, “progress” is deeply relative. Even the most shining realizations of genius imply the sacrifice of thousands of potential choices that have been discarded during the process. The Left chose to forget this truth in order to judge everything and everyone from its own authoritarian, pedestalized perspective.

    If you do some research about such characters as, say, Ayn Rand and Lothrop Stoddard, you’ll notice they have been widely labelled “reactionary.” Yet each of them was a progressive in his own right. Rand considered industrial development and individual freedom as obvious landmarks of progress: she opposed vehemently to the environmentalist and collectivist—that is, anti-industrial, anti-economic growth, anti-conservative rights—as a “return of the primitive.”

    As for Lothrop Stoddard, he rebuffed Bolshevism and environmentalism as pre-scientific ratiocinations that willingly ignored human differences and the proper value of civilization. These “mistakes”, he said, are older than biological discoveries and stem from “degenerate” elements who would rather destroy civilization than letting it progress without them.

    The only new thing about Bolshevism is its ” rationalizing ” of rebellious emotions into an exceedingly insidious and persuasive philosophy of revolt which has not merely welded all the real social rebels, but has also deluded many misguided dupes, blind to what Bolshevism implies. (Stoddard, Revolt Against Civilization, chap.8)

    I also remember an old-fashioned Marxist who claimed feminism was “reactionary” because, he said, it comes from the wealthy and urbanized bourgeoisie, and hijacks the attention and care given to working classes for the benefit of actual exploiters. This guy’s progressivism has fallen out of grace, likely because it showed unable to destroy Western countries, but he is no less right according to his own logic.

    Now, of course, we could say that MRAs are the real progressives as men’s rights are a progress, or that asserting our identities and associated rights are a progress, perhaps more so than SJW savagery and unrestrained hypergamy.

    4. Openness or open-mindedness

    We all heard about how being “open to new ideas” and possibilities, or being “open-minded” was good. In practice, what the liberals mean when they talk about openness or open-minded is “be a Leftist and believe in our notion of progress.” You have to be uncritical, hyper-sympathetic towards the last tranny or BLM activist that whines about how mistreated and misunderstood he is—and if you are “open” to wasting your money on the latest trendy fashion, it is even better.

    But try being open-minded towards what the Left tags as “far right” or “extreme”, for example men’s right, race realism, skepticism on their dogmas such as anthropogenic global warming, or tradition… and it won’t be long before they shriek at you, in a typical display of rather irrational dirtiness psychology. “These ideas are impure! They are contagious!”

    Open-mindedness along their lines means being gullible to media and college propaganda. You have to let the managers and social engineers fabric your consent, as Chomsky would put it. They want your mind to be open so they can fulfill it with self-hate and garbage. When it comes to better things libtards suspend open-mindedness, to the point of refusing any objective inquiry and hiding behind their biased, accusatory rhetoric.

    In itself, openness or open-mindedness is a double-edged sword. It can, and should be used by those who are intelligent or morally structured enough to toy with potentially dangerous ideas. As to the others, those who are too easily tempted or misdirect by demagogues, especially women—who by their vote always favoured an anti-family, economy-devouring Big State—, the low-IQ and the unhinged, I think they should follow the lead of more qualified individuals.

    5. Modern nationhood and citizenship

    Since time immemorial peoples have been ethnocultural groups. Romans used the term natio to refer to a particular people, say, the Gaul, the Goths or the Basque. They also used the term civis to refer to a man as a member of his city, thus belonging to it.

    Both words have been emptied of their substantial meaning. “Nation” is now mostly used to denote an abstract, bureaucratized State whom anyone can be a national if the bureaucrats hand him a stamped piece of paper. “Citizenship” refers to the pretense to identify with a particular public responsibility or to a world under globalist power: Leftists often claim to be “just citizens” or speak “in the name of the citizens of X place” when they are actually carrying cultural warfare. Remember when a bunch of hateful swindlers tried to rob Sherry Spencer, Richard Spencer’s mom, of her real estate by forcing her to sell it at a cheap price? Complacent media said they were just citizens, or that “the town” was doing it. Yeah, sure.

    Citizenship today is a mean to virtue-signal when you are an urban elf. It has become empty, fictitious—it refers to a world of nowhere and more subtly to belonging to a globalist class that abandoned its actual fellow citizens or ethnic brothers long ago.

    6. “Social struggles” and “achievements”

    When they referred to actually good causes, such as trade unions maintaining a high standard of living for most workers and fostering a meritocratic middle-class, these words ringed well. Today, they seem to refer more to the unwarranted privileges of State officers—when theft through taxes and economic rent are presented as something “social.”

    The heroic epic of “social achievements”, which conveniently forgets that there is no free lunch and that if a particular segment of population benefits much from them it must be at the expense of the others, covers a host of barely examined ill effects. When it is used to glorify the welfare State, it forgets how such a State tends to disintegrate organic social life by taking away charity or generosity, how it fosters a big parasitic and paternalist State, how it allows females to destroy their families, or how it attracts immigrants eager to get a check and imposes unfair burdens on the productive citizens—I’m thinking about, say, the middle classes who paid for Obamacare, not about cutting taxes for Monsanto.

    Conclusion

    From fake smiles and cute façades to seemingly innocuous buzzwords such as “you go girl”, “sex positivity” or “self-acceptance” – which sounds better than complacency – the culture conflict-mongerers managed to push their disruptions and degeneration into normality. One step at a time, from actual normalcy to an alien nation, all this believing they were cool or on the good side of history.

    Shatter the illusion by explaining what stands behind and unveil the inner vacuity or potentially polymorphous use of the word. May progress not be “progress” and may the mainstream view of justice not be the anti-white, misandric “social justice.” They aren’t smarter than we are, just more manipulative.

  • China's Largest Dairy Operator Suddenly Crashes 90% To Record Low, Muddy Waters Says "Worth Close To Zero"

    In December 2016, Muddy Waters’ Carson Block said China’s largest dairy farm operator, Hong-Kong listed China Huishan Dairy Holdings Co., is “worth close to zero” and questioned its profitability in a report. Today, with no catalyst, it suddenly almost is. The stock collapsed over 90% in minutes to a record low.

    The sudden crash wiped out about $4.2 billion in market value in the stock, which is a member of the MSCI China Index.

     

    In December, Muddy Waters alleged that Huishan had been overstating its spending on its cow farms by as much as 1.6 billion yuan to “support the company’s income statement.” The report also alleged that the company made an unannounced transfer of a subsidiary that owned at least four cow farms to an undisclosed related party and Muddy Waters concluded that Chairman Yang Kai controls the subsidiary and farms. Those findings came from several months of research including visits to 35 farms and five production facilities, drone flyovers of Huishan sites and interviews with alfalfa suppliers, according to the report. Muddy Waters said it has shorted Huishan’s stock.

    “It will be even harder for Huishan to get funded in the capital market after the report, amid a couple of earlier allegations that have raised some red flags to investors,” said Robin Yuen, an analyst at RHB OSK Securities Hong Kong Ltd. Still, Huishan’s shares and operations are unlikely to “collapse” due to its high share concentration and sufficient cash flow generated by its dairy business, he said by telephone.

    About 73 percent of Huishan’s shares are held by Champ Harvest Ltd., a company that’s in turn 90-percent owned by Yang. A buying spree by Yang had supported the shares last year, making it a painful trade for short sellers. A one-year rally of about 80 percent through a peak in June had made the shares expensive.

    Well that is all over now!!

  • SNB Spent $68 Billion On Currency Manipulation In 2016

    While Donald Trump has repeatedly expressed his displeasure with China for manipulating its currency, he appears to have recently figured out that over the past 2 years Beijing has been spending hundreds of billions in dollar to strengthen, not weaken, the Yuan and to halt the ~$1 trillion in capital flight from China. But while everyone knows that the biggest currency manipulation in the world, and perhaps the Milky Way galaxy is Japan, which now owns 40% of all JGBs in its ongoing attempt to pressure the Yen lower and explains why Abe was trembling when he met with Trump, terrified the US president would tell him to stop, one place where Trump may want to look is Europe’s famously “neutral” country, which however continues to be quite bellicose when it comes to currency warfare. Overnight, the SNB announced that in 2016 it spent 67.1 billion Swiss francs, or $67.6 billion, to purchase foreign currencies in an effort to weaken its currency.

    The amount, published in the central bank’s annual report on Thursday, was roughly CHF20 billion lower than the 2015 total of 86.1 billion francs and a record of 188 billion spent in 2012. What is notable is that in 2015, the Swiss National Bank ended its 1.20 EURCHF peg, which ended up costing the SNB tens of billions in FX losses.

    As shown in the chart below, the SNB has used interventions for the better part of a decade to keep the franc, Europe’s preeminent flight to safety currency, in check and lessen the risk of deflation. After it gave up its currency cap in early 2015, the SNB has also relied on a negative deposit rate to counter appreciation pressure. It reaffirmed that two-pillar policy stance last week.

    Additionally, as part of its annual report, the SNB reported that at the end of 2016, the SNB’s assets hit a record CHF 747 billion, compared to CHF 641 billion the previous year, higher than the country’s total GDP. The central bank’s assets consisted almost exclusively of currency reserves, that is gold and foreign currency investments. Currency reserves were up by CHF 89 billion year-on-year to CHF 692 billion, principally due to inflows from foreign currency purchases and valuation gains.

    And since the SNB is the only central banks which admits it is an aggressive hedge fund, it also reports both the composition of its balance sheet and the return on assets, and in 2016 it generated a profit on currency reserves of 3.8%. Meanwhile, returns on gold and foreign exchange reserves were 11.1% and 3.3% respectively.

    What is paradoxical is that despite gold generating the SNB’s highest return not only in 2016 (11.1%) and over the entire 2002-2016 period, at 6.5%, the central bank has been aggressively reducing the relative size of its gold-denominated assets over the past 7 years, mostly as a result of purchases of USD-denominated stocks and bonds.

    In 2016, both fixed income investments and equities contributed to the SNB’s bottom line. On the other hand, the slight appreciation of the Swiss franc reduced the return.

    The SNB also revealed that in 2016, the SNB held 20% of its foreign exchange reserves in the form of equity investments. Measured in Swiss francs, the average annual return on equities since their introduction in 2005 has been 2.8%; the return on bonds has averaged 0.7%.

    Finally, for those confused that the SNB is so open about its purchases and holdings of mostly US stocks, this is how the central bank justifies its policy of active stock management:

    The contribution of equities to preserving the value of the currency reserves and building the SNB’s equity base has thus been very substantial during this period.

    We look forward to how this boilerplate language will change after the next equity market crash which will wipe out tens of billions in “value” from the SNB’s balance sheet.

  • Paul Craig Roberts: "In America Today, Facts Cannot Compete With Lies"

    Authored by Paul Craig Roberts,

    Unable to provide an ounce of evidence that a Trump/Putin conspiracy stole the presidential election from Hillary Clinton, the corrupt US “intelligence” agencies are shifting their focus to social media and to Internet sites such as Alex Jones and Breitbart. Little doubt the FBI investigation will trickle down to Glenn Greenwald at The Intercept, Zero Hedge, the Ron Paul Institute, Nomi Prins, Naked Capitalism, Lew Rockwell, Global Research, antiwar.com, and to others on the PropOrNot, Harvard Library, and Le Monde lists, such as top Reagan administration officials David Stockman and myself. It is extraordinary that the FBI is so desperate to protect the budget of the military/security complex that it brings such embarrassment to itself. Who in the future will believe any FBI report or anything a FBI official says?

    Those behind this “investigation” understand that it is so ridiculous that they must give it gravity and credibility. They selected two reporters, Peter Stone and Greg Gordon, in the McClatchy News Washington Bureau, who fit Udo Ulfkotte’s definition of “bought journalists.” Hiding behind anonymous sources—“two people familiar with the inquiry” and “sources who spoke on condition of anonymity”—the presstitutes fell in with the attack on independent media, reporting that one former US intelligence official said: “This may be one of the most highly impactful information operations in the history of intelligence.” http://www.mcclatchydc.com/news/politics-government/white-house/article139695453.html

    Wow! A totally ridiculous “investigation” is one of the most important in history. The implication is that the Russians are operating through scores or hundreds of independent media sites to control how Americans vote.

    There was once a time in America when people were skeptical of anonymous sources. It was widely understood that anyone could tell a reporter anything and that a reporter could claim an anonymous source whether or not the source existed. Perhaps it was the Watergate “investigation” by the Washington Post that gave anonymity credibility. The Post’s reports made it sound like any sources ratting on Nixon’s perfidy was at risk of their lives, and the subtle emphasis on risk gave anonymity credibility.

    The real story under our noses is not a Trump/Putin/independent media conspiracy to steal the presidential election. The real story is the totally obvious collusion between the Hillary forces, the US print and TV media (with the partial exception of Fox News), and the CIA and FBI to steal the Democratic nomination from Bernie Sanders, the presidential election from Donald Trump, and to delegitimize Trump’s election.

    The theft of the nomination from Sanders is precisely what the leaked Podesta emails show. The totally one-sided presstitute support for Hillary and full-scale assault on Trump clearly show the presstitutes participation in the collusion. The extraordinary lies told in public by Obama’s CIA Director John Brennan clearly demonstrate the CIA’s lead in the attempted frame-up of Trump and his team. FBI Director Comey’s statement the day before the presidential election that the FBI had once again cleared Hillary of criminal charges sent the Dow up 371 points and set the stage for a Hillary election victory.

    Why are not any of these hard facts in the news?

    Why, instead, do the presstitutes and “intelligence” agencies report nothing but fake news, supported by anonymous “sources”? Why is a false reality being constructed, and the hard facts ignored?

    Note another extremely strange feature of our strange time. Elements of the liberal/progressive/left portray President Trump as a member of the One Percent operating for the One Percent against the people and filling his government up with generals and his budget with more military spending. Why then is Trump under full-scale assault from the military/security complex? Why are they working to contradict, delegitimize and impeach their own agent?

    If Americans were a thinking people, or even a people capable of thought, how could such inconsistent disinformation dominate public discussion?

    What we should be scared about is that in America today, facts cannot compete with lies.

    The McClatchy story describing a pointless investigation as one of the most important in history is working its way through the media. See:

    http://www.latimes.com/politics/washington/la-na-essential-washington-updates-some-right-wing-sites-under-1490115530-htmlstory.html

    http://dailycaller.com/2017/03/21/fbi-probing-breitbart-infowars-in-russian-influence-investigation/

    http://news.antiwar.com/2017/03/21/fbis-russia-probe-turns-focus-on-social-media-bots/print/

    Are we to conclude that America’s corrupt and disloyal “intelligence” agencies are a direct threat to democracy, that they are committed to overthrowing Trump’s presidency in a “color revolution,” that, unable to provide any evidence whatsoever for their conspiracy theory of a Trump/Putin collusion to steal the presidential election, the “intelligence” agencies have moved on to the discredit the independent Internet media that are in the way of the “intelligence” agencies’ control over explanations?

    It is a hard fact that the Democrats, US “intelligence,” and the presstitutes are absolutely determined to control the explanations given to the American people and the wider world.

    The Agents are out in force, and Neo is nowhere in sight.

    The demonization of Russia and the extraordinary level of tension that the ignorant and foolish Clinton, George W. Bush, and Obama regimes created with Russia are disconcerting, indeed, frightening to those, such as myself, Patrick Buchanan, and Stephen Cohen, who experienced the long decades of the Cold War. We have never seen such highly provocative, entirely gratuitous behavior of one nuclear power toward another as the behavior of the US toward Russia over the past six presidential terms. What the Cold Warriors of the time experienced was a gradual buildup of mutual trust that enabled Reagan and Gorbachev to end the Cold War and remove the threat of nuclear Armageddon.

    In contrast, the Clinton, Bush, and Obama regimes, the FBI, CIA, NSA, the New York Times, Washington Post, CNN, NPR, MSNBC, and the rest of the presstitutes, the right-wing Republicans, such as Lindsey Graham, John McCain, and Ben Sasse, the Democratic Party, and the liberal/progressive/left have convinced Russia, in the words of Russia’s President Putin, that “we cannot trust the United States.”

    This “achievement” of these idiots comprises the greatest crime humans have committed in their entire history. The atomic bombs with which the Americans gratuitously destroyed two Japanese cities are mere pop guns compared to the thermo-nuclear weapons of today. Some of the crazed neoconservatives erroneously believe that Russia is not sufficiently well-armed to respond to US aggression, but the fact of the matter is that Russia’s strategic weapons are superior and more powerful than those of the US.

    How can it be anything other than a death wish for European governments to be egging on conflict with Russia, for women marching not against war but against Trump for wanting to reduce tensions with Russia, for US “intelligence” to be totally committed to orchestrating a “Russian threat” that all but guarantees thermo-nuclear war? One would think that people would be marching in favor of reduced tensions with Russia and demanding that Trump deliver on this promise, not that they would be out opposing Trump. What is the importance of Identity Politics compared to nuclear war?

    How can Americans, Democrats, Republicans, Greens, Europeans, Canadians, Australians, New Zealanders, and Japanese contain their outrage against the governments that are putting the life of the planet at risk for nothing except the budget and power of the US military/security complex? Trump is silly to roll back environmental protections, but this pales in comparison to the environmental damage of thermo-nuclear war.

    How can the left-wing be lost in Identity Politics while the life of the planet is being put at extreme risk?

    Why did CounterPunch recently and suddenly abandon the working class and peace and take up the cause of the victim groups of Identity Politics— women, blacks, homosexuals, lesbians, transgendered, and Muslim refugees (see Eric Draitser CP, Vol. 24, No. 1), the cause of the EU and globalism (see http://www.counterpunch.org/2017/03/20/brexit-nationalism-and-the-damage-done/ ) which benefits only the One Percent, and the demonization of Trump and Putin? Perhaps it is only a coincidence, but CounterPunch’s collapse coincides with CP being put on and removed from the PropOrNot list of Russian agents/dupes. My columns, for years a welcome feature on CounterPunch, suddenly ceased to appear. We have had no explanation from CounterPunch why the site suddenly gave up on peace and bread.

    One might think that the audacity of the lies from the FBI, CIA, NSA and their media whores would provoke a powerful response from the liberal/progressive/left and from European populations, but it hasn’t.

    What about Trump himself? Has he been forced to abandon his goal of normal relations with Russia, as this article in the Intercept suggests? https://theintercept.com/2017/03/21/revolving-door-military/ If not, is Trump filling top Pentagon and Homeland Security positions with generals and defense contractors in order to neutralize the military from participating in a CIA/presstitute coup against him?

    If Trump is eliminated, with Pence as VP and the list of appointees provided by the Intercept, the US government will pass into the hands of the military/security complex for the remainder of its existence.

    Is Trump now focused on protecting himself instead of protecting all of us from a deadly conflict with Russia?

    If so, this is the achievement of the US “intelligence” services, the Democratic Party, right-wing Republicans, the presstitute media, and the liberal/progressive/left.

    If anyone remains to write the history of the Great Incineration, the identity of those responsible is completely clear.

  • Death & Taxes… And Debt

    Nothing in this world is certain, except death and taxes… and $62,000 debt.

    According to December 2016 data provided to Credit.com by credit bureau Experian, 73% of consumers had outstanding debt when they were reported as dead.

    Those consumers carried an average total balance of $61,554, including mortgage debt. Without home loans, the average balance was $12,875. Among the 73% of consumers who had debt when they died, about 68% had credit card balances.

    The next most common kind of debt was mortgage debt (37%), followed by auto loans (25%), personal loans (12%) and student loans (6%). These were the average unpaid balances: credit cards, $4,531; auto loans, $17,111; personal loans, $14,793; and student loans, $25,391.

    That’s a lot of debt, and, as Fox Business reports, it doesn’t just disappear when someone dies.

    For the most part, your debt dies with you, but that doesn’t mean it won’t affect the people you leave behind.

     

    “Debt belongs to the deceased person or that person’s estate,” said Darra L. Rayndon, an estate planning attorney with Clark Hill in Scottsdale, Arizona. If someone has enough assets to cover their debts, the creditors get paid, and beneficiaries receive whatever remains. But if there aren’t enough assets to satisfy debts, creditors lose out (they may get some, but not all, of what they’re owed). Family members do not then become responsible for the debt, as some people worry they might.

     

    That’s the general idea, but things are not always that straightforward. The type of debt you have, where you live and the value of your estate significantly affects the complexity of the situation. (For example, federal student loan debt Opens a New Window. is eligible for cancellation upon a borrower’s death, but private student loan companies tend not to offer the same benefit. They can go after the borrower’s estate for payment.)

     

    There are lots of ways things can get messy. Say your only asset is a home other people live in. That asset must be used to satisfy debts, whether it’s the mortgage on that home or a lot of credit card debt, meaning the people who live there may have to take over the mortgage, or your family may need to sell the home in order to pay creditors. Accounts with co-signers or co-applicants can also result in the debt falling on someone else’s shoulders. Community property states, where spouses share ownership of property, also handle debts acquired during a marriage a little differently.

    The bottom line – even after you're dead, debt servitude is stil an anchor around your neck.

  • A New Trend Emerges – Digital Gold "Gifting" Gains Popularity In China

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    I rarely write about gold these days, but the following from Reuters caught my attention.

    BEIJING/SHANGHAI, March 7, China’s virtual gifting market, typically the domain of plugged-in young consumers celebrating special occasions or flirting, is luring major financial institutions keen to boost trade of another auspicious commodity: gold.

     

    Tencent’s digital gold packets, known as “microgold”, are backed by the country’s biggest bank, Industrial and Commercial Bank of China (ICBC). They allow users to send funds that track the real-time value of gold to friends over the firm’s popular messaging platform WeChat.

     

    It’s a financial innovation on the concept of virtual gifts, such as digital roses and chocolates, more commonly used in online communities and which have more sentimental value than any tangible economic worth.

     

    For financial institutions, China’s booming virtual goods and smartphone-driven exchanges offer new markets to boost trading volumes in everything from banking services to gems.

     

    ICBC, in an internal memo seen by Reuters and sent to staff on Friday, said the WeChat microgold platform had helped drive “explosive growth” in new gold accounts.

     

    Over the recent Lunar New Year period, WeChat users sent 70,000 microgold packets worth just under 100 million yuan ($14.51 million) across the chat platform, the ICBC document said. It expects over 300,000 new gold accounts to be opened as a result of the Tencent tie-up. Neither ICBC nor Tencent were immediately available for comment.

     

    While the volumes are relatively small, the take-up of similar virtual products on the WeChat platform suggests room for growth.

     

    Kong Lingxin, a 20-year-old student from the northern city of Tianjin, uses her smartphone to buy, gift and hoard gold online.

     

    Kong has spent 10,000 yuan ($1,452.88) of her savings on gold derivative products this year on Alibaba Group Holding Ltd-linked platform “Cun Jinbao” – literally “store golden treasure”.

     

    “My family has a history of collecting gold bars, which influenced my choice of investment,” said Kong. “I chose an internet platform because it’s easy to track gold prices, see your profits and make trades.”

     

    Gold analysts said the push by tech firms into the sector, though still at an early stage, had potential longer-term to stir up a sluggish Asian market if it caught on.

     

    “It will become a support for gold demand and the gold price if WeChat gold packets become popular, considering the amount of traditional red envelopes users send,” said Guotai Junan gold analyst Xie Qingpeng.

     

    Beijing has taken note of the trend. The Ministry of Industry and Information Technology (MIIT) issued a guideline last week, calling for tech to play a bigger role in gold trading.

     

    Amid a property price spike, gold offers younger buyers a more affordable and accessible investment.

     

    “It’s nearly impossible for young people to invest in property in first tier cities in China. Alternatively, they put small amounts into gold, as a low risk investment,” said Helen Lao, Singapore-based metals analyst at Argonaut Securities.

    I think those last few lines will be a very important factor for gold demand going forward, as young Chinese with savings to protect struggle with where to put their money.

    Meanwhile, gold’s been pretty boring for a while now. I think that might change soon. As I tweeted earlier today.

    //platform.twitter.com/widgets.js

  • Thursday Humor: Medicare Part G?

    Given today’s vote fiasco, this seemed highly appropriate…

    If you are an older senior citizen and can no longer take care of yourself and need Long-Term Care, but the government says there is no Nursing Home care available for you, what do you do?

     

    You may opt for Medicare Part G.

     

    • The plan gives anyone 75 or older a gun (Part G) and one bullet.
    • You may then shoot one worthless politician.
    • This means you will be sent to prison for the rest of your life where you will receive three meals a day, a roof over your head, central heating and air conditioning, cable TV, a library, and all the health care you need.
    • Need new teeth? No problem. Need glasses? That’s great. Need a hearing aid, new hip, knees, kidney, lungs, sex change, or heart? They are all covered!
    • As an added bonus, your kids can come and visit you at least as often as they do now!

     

    And, who will be paying for all of this? The same government that just told you they can’t afford for you to go into a nursing home.  And you will get rid of a useless politician while you are at it.

     

    And now, because you are a prisoner, you don’t have to pay any more income taxes!

     

    Is this a great country or what?

     


     

    Now that you have solved your senior Long-Term Care problem, enjoy the rest of your week!

    Source: Unknown

  • Trump Issues An Ultimatum To House Republicans: Vote On Friday Or Obamacare Stays

    Update: Trump’s bluff may be working already. Following Trump’s ultimatum, Mark Meadows, chairman of the Freedom Caucus said that the healthcare bill has been improved, and that the Freedom Caucus will meet and discuss the revised bill. And while Meadows is maintaining a solid front for now, saying he is a “No” vote right now, with Trump having shone the spotlight fully on the Freedom Caucus, and thus providing republicans with a scapegoat should the vote fail tomorrow, we would not find it at all surprising if the Freedom Caucus were to fold overnight following “intense deliberations.”

    * * *

    Following a day of narrative twists and turns ahead of what was supposed to be a Thursday night vote to repeal Obamacare, a vote which was pulled in the last moment when over 30 conservative and moderate House republicans threatened to vote against the Ryan/Trump plan, Trump has had enough with the Freedom Caucus dissenters and has issued an informal ultimatum: vote to repeal Obamacare on Friday or Obamacare stays.

    Trump is demanding a vote Friday in the House on the Republican plan to repeal and replace Obamacare, White House Budget Director Mick Mulvaney said according to Reuters. If the bill fails, Trump is prepared to move on and leave Obamacare in place the budget director added.

    Trump officials meeting with the House GOP conference said Trump is done negotiating over the legislation, which was set to come up for a vote Thursday but was delayed.

    Mulvaney told the GOP conference that Trump wants a vote on Friday during a dramatic closed-door meeting, according to a GOP source in the room.  If the vote fails, Trump will move on to other priorities and ObamaCare will stay as the law of the land, Mulvaney said.

    There were last-minute changes being considered to the bill. But it was unclear whether the House of Representatives would be able to pass it, said North Carolina Congressman Mark Meadows, the chairman of a group of conservatives known as the Freedom Caucus, which has been critical of the bill. “I’m still optimistic” about reaching an agreement, Meadows told reporters.

    Having met with Paul Ryan on Thursday evening, Trump’s right hand man Steve Bannon told reporters after the House Republican conference that he expects lawmakers to vote Friday on the health-care bill. When asked if he’s confident there’s enough votes for passage: “We’re going to vote and we’ll see.”

    Rep. Chris Collins confirmed the Trump administration’s message after the meeting. Trump is done negotiating, he said.  “We have to have a vote tomorrow. He expects it to pass, but he’s moving on if for some reason it didn’t,” Collins said.

    According to The Hill, the developments set up a likely vote on the measure Friday afternoon.

    It remains unclear just how Trump’s ultimatum will change the minds of dozens of Republicans who have vowed to oppose the bill, putting them into a direct confrontation with their president. With all of the House’s Democrats expected to vote against the bill, the GOP can only afford 22 defections.

    Additionally, even if their replacement plan does eventually get approval from the House, the legislation faces an even tougher fight in the Republican-controlled Senate.

    Meanwhile, in a worst case scenario, in which the House votes tomorrow and fails to generate the needed majority of votes, it is unclear just how Trump can “move forward” under the reconciliation process, as tax reform is part and parcel with deficit-reducing – as scored by the CBO – Republican health bill. Should Trump push on, at best it will mean he has an even smaller tax cut cushion. Furthermore, should Trump further antagonize the Freedom Caucus, a far bigger problem for Trump and the government will be if the conservative wing refuses to budge on the debt ceiling negotiation, because should the US be unable to once again indefinitely extend the debt ceiling limit, the US will suddenly have far greater problems than repealing Obamacare.

  • Chinese President Throws Weight Behind Israel/Palestine Peace, Two-State Solution

    Authored by James Holbrooks via TheAntiMedia.org,

    While hosting Israeli Prime Minister Benjamin Netanyahu in Beijing on Tuesday, Chinese President Xi Jinping called for peace between Israel and Palestine and said an independent Palestinian state should be established “as soon as possible.”

    “The conflict between Israel and Palestine has had a long lasting impact on the Middle East,” Xi said. “China appreciates that Israeli side will continue to tackle the Israeli-Palestinian issue on the issue of the ‘two-state solution.’”

    China’s premier, Li Keqiang, had warmly received the Israeli prime minister on Monday in Beijing’s Great Hall of the People.

    “The Chinese people and the Jewish people are both great peoples of the world,” Li said at the meeting.

    Netanyahu, similarly amenable, praised China as a world leader in technology and said there are many areas where the two nations can collaborate.

    “And I would like to have the opportunity to exchange views with you and to see how we can cooperate together for the advancement of security, peace and stability, and prosperity,” Netanyahu said Monday.

    He stuck to this note while speaking with the Chinese president on Tuesday.

    “We have always believed, as we discussed on my previous visit,” Netanyahu said, “that Israel can be a partner, a junior partner, but a perfect partner for China in the development of a variety of technologies that change the way we live, how long we live, how healthy we live, the water we drink, the food we eat, the milk that we drink — in every area.”

    In fact, in terms of trade, Netanyahu wants China to grant Israel a special status. Back in January, China set restrictions on its citizens’ overseas spending in an effort to boost domestic revenue. Now, the Israeli prime minister is asking China’s president for an economic waiver.

    “I asked for an exemption on the general restrictions,” Netanyahu told reporters after his meeting with Xi on Tuesday. “I said that Israel’s a special case. It’s a technology powerhouse that has no market. It has significance for technology but it doesn’t have any significance in terms of volume on markets or currencies, or anything. Israel is very big in technology but small in market weight.”

    The Israeli leader claims Xi is willing to go along with the idea, though no details of such an arrangement have been made public. Also unknown is whether such a deal would be contingent upon Israel seeking a peaceful two-state solution to its conflict with Palestine, as President Xi indicated Tuesday he supports.

    Netanyahu appeared to have no comment in response to Xi’s remarks about a two-state solution.

    In February, President Trump backed away from the White House’s long-purported goal of reaching that compromise, instead leaving the door open for whatever plan the two sides agree on.

    “If Israel and the Palestinians are happy, I’m happy with the one they like the best,” the U.S. president said.

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Today’s News 23rd March 2017

  • Will Thursday's Final TLTRO Finally Spark Carry Trades?

    By Nick Kounis of ABN Amro

    Euro Rates Watch – Will the TLTRO spark carry trades?

    • The last of the ECB’s TLTRO-II operations is expected to have a big take up, with the market expecting EUR 125bn, and some forecasts as high as EUR 300bn
    • From a rates perspective, what matters is whether these funds will trigger flows into the bond or swap markets as banks set up carry trades
    • Carry trades have certainly looked attractive and currently there is a possible spread of around 80bp between the rate on the TLTRO and similar maturity peripheral bonds
    • However, there is little evidence that banks have used TLTRO-II funds for carry trades over the last few months
    • Eurozone bank government bond holdings have actually fallen sharply since the first TLTRO-II…
    • …while a very small proportion of banks said they would use the funds to buy assets in the ECB’s Bank Lending Survey
    • Finally, there was no discernible impact on government bond curves around the time of the TLTROs…
    • ….and only a temporary impact on swap spreads in one of the three operations
    • Overall, we doubt the last of the TLTRO’s will have a major lasting impact on bond or swap markets

    The impact of TLTRO-II on the eurozone rates market

    On Thursday, the ECB will hold its fourth tender under the TLTRO-II (Targeted Long-Term Refinancing Operations) programme. A large take-up is expected. A poll published by Reuters had a  median forecast of EUR 125bn net borrowing (EUR 141bn gross given banks will repay EUR 16.74bn), with estimates as high as EUR 300bn. From a rates perspective, what matters is whether these funds will trigger flows into the bond or swap markets as banks set up carry trades. Certainly, carry trades can be attractive. At the time of past operations there has been a possible spread of around 40bp between the rate on the TLTRO and similar maturity peripheral bonds. Currently this spread has risen to around 80bp, given the rise in peripheral yields. In this note we assess how likely it is that we will see a major impact on bond and swap markets by looking at the impact of the first three tenders, which saw a cumulative net take up of EUR 138bn. We first take a look at what banks have said about the uses of TLTRO funds in the ECB’s Bank Lending Survey. We go on to look at bank bond holdings. Finally, we analyse price movements in the bond and swap markets around the time of the TLTROs.

    Only a very small proportion of banks say they used TLTRO to buy assets

    The ECB’s Euro area Bank Lending Survey of January 2017 (see here) asked 134 banks about their participation in past TLTRO-II operations and the upcoming tender. In addition, the banks were questioned on their planned use of the funds (see charts below). Of the banks, 37% said they participated in the third TLTRO-II operation, which was lower than in the second tender (see graphs below). Meanwhile, 26% said they intended to participate in the upcoming TLTRO-II tender, while 42% was undecided and 32% indicated that they did not plan to participate. It is likely that more banks now intend to participate given it is final tender and market expectations of interest rate hikes have risen (see appendix). For the use of past TLTRO-II liquidity, banks revealed that they would use the cheap liquidity for granting loans (60%), to refinance other funding sources (24%), while only a very modest proportion said they intended to buy assets (9%). For tomorrow’s tender, a slightly higher proportion of the banks said they would engage in carry trades (13%).

    Eurozone government bond holdings have fallen

    The banks’ responses in the ECB survey appear to be corroborated in data on eurozone banks’ non-MFI bond holdings (see charts below). Eurozone banks’ bond holdings fell significantly between June of last year and  January of this year. Total bond holdings fell by EUR 153bn (-9.6%), while domestic bond holdings fell by EUR 124bn (-10.6%). The large absolute falls were seen in Spain and Italy, followed by France and Germany. If banks had  initiated carry trades by using TLTRO-II funds to invest in bonds, their bond holdings would have been expected to rise. Rather, a large buyer – the Eurosystem central banks – seems to have crowded them out of the market.

    Little discernible impact on bond or swap markets

    Finally, we find no major or sustained impact on bo nd or swap markets in the day surrounding the TLTRO-II operations. In the charts below, T is the TLRO-II settlement day for the various operations, and we show movements in swap and bond markets 5 days before and 5 days after. Carry trades would be expected to induce steepening as they would support the segment around 4-years. The left hand chart shows 5s10s ASW swap spreads. There was only temporary steepening around the time of the first TLTRO-II in June, while there was no visible impact in the September and December editions. In the run-up to this month’s TLTRO-II, we do see some steepening, as there appears to be some front running. But it is too early to say it trend will be sustained, given the experience of the swap market behaviour in the first three tenders. The right hand chart shows the average 4s8s spreads of Italian and Spanish government bonds. There is little evidence of bull steepening around any of the operations.

    No major sustained impact expected from last TLTRO-II

    The last of the TLTRO-II operations will probably see a large net take up of EUR 100bn or more. As discussed above, it would seem very attractive to invest TLTRO proceeds into especially peripheral government bonds  or to conduct carry trades by entering receiver swaps of similar maturities to the tender. However, there is little evidence that banks have done so up until now, even though it has always been relatively attractive. One  potential reason for this is that (especially peripheral) bank holdings of government bonds were already very large at the start of the TLTRO-II operations. They may feel uncomfortable adding to those holdings. Another reason is that by investing in assets, banks increase their balance sheets. This could be accompanied by higher regulatory costs which would make carry trades less profitable. Furthermore, there have been initiatives in Europe to risk-weight banks’ domestic government bond holdings. At the same time, investors have recently become more concerned about the fundamentals of certain sovereigns in the periphery,  especially once QE ends. Overall, we  doubt the last of the TLTRO’s will have a major lasting impact on bond or swap markets

  • Economics Of The Standoff Between Turkey And The Netherlands

    Authored by Altay Atli via The Strategic Culture Foundation blog,

    As the diplomatic squabble between Turkey and the Netherlands continues to fester, concerns are raised about whether — and to what extent — the tensions will harm bilateral relations, particularly in economics where the two countries have robust trade and investment connections.

    For Turkey, the Netherlands offers a large and expanding export market. Trade between the two countries has roots in the 17th century when the Ottomans exported wool and cotton (later tobacco as well) to the Netherlands and imported clothes and linen in return. Commerce between the two countries remained strong into modern times; in 2016 the bilateral trade volume was US$6.6 billion.

    The Netherlands is the 10th largest export destination for Turkey, and perhaps more importantly from the Turkish perspective, it is also a fast-growing market. Last year Turkish exports to the Dutch market amounted to $3.6 billion, against $3 billion in imports. And while the annual increase in imports was 3.4%, exports expanded much faster, at 13.8%. For the Turkish economy, which is suffering an acute current-account deficit, the increasing trade surplus with the Dutch is a precious commodity.

    On the other side of the equation, Turkey is and has always been a favored destination for Dutch investment. A process that started in 1930 when the Dutch company Philips set up shop in the newly established Republic of Turkey has reached new levels since then, making the Netherlands by far the largest source of foreign direct investment in Turkey today. According to data by the Turkish Central Bank, Dutch investment stock in Turkey was $22 billion in 2016, compared with $11.2 billion in US investments in second place, and $9.8 billion from Austria in third place.

    Turkey is home to 2,700 companies funded by Dutch capital. This figure includes those transnational companies registered in the Netherlands for legal and tax-related purposes. This sizeable Dutch involvement in the Turkish economy benefits both sides. For Dutch multinationals such as Unilever, ING Bank, Philips, Perfetti, Royal Dutch Shell and Philip Morris, Turkey is not only a favorable production base but also a lucrative market and a trading and logistics hub for access to the Middle East and North Africa, Balkans, Caucasus and Central Asia. More Dutch investment is set to come to Turkey, such as the recent purchase by Vitol Group of the Turkey-based fuel products distribution company Petrolofisi for $1.47 billion. Investment needs a stable political climate, and the diplomatic spat between Turkey and the Netherlands doesn’t help.

    It is also worth nothing that while the amount of Turkish investment in the Netherlands is considerably smaller, there are several large Turkish firms that have set up subsidiaries enabling access to the larger EU market.

    For the past week, Dutch pundits have been commenting that Turkey is more dependent on the Netherlands, so possible sanctions imposed by Ankara would only mean “shooting themselves in the foot.” Turkish authorities have imposed political sanctions over the Dutch government’s refusal to allow Turkish ministers to meet with members of the Turkish diaspora there, including halting high-level political discussions between the two countries and the closing of Turkish airspace to Dutch diplomats. But Ankara has carefully ruled out economic sanctions. Turkey’s economics minister, Nihat Zeybekçi said: “If we take these steps, both sides would be hurt.” Ömer Çelik, minister of EU affairs said the Dutch business community, which is “investing in Turkey, doing commerce and generating employment” is “certainly not a part of this crisis,” and “Dutch investment in Turkey is by no means under risk”.

    Economic sanctions between Turkey and the Netherlands don’t seem likely at the moment, but longer-term threats remain.

    First, even if no sanctions are imposed, the significant loss of confidence caused by recent events will take a toll on bilateral economic relations for some time.

     

    Second, the sizeable Turkish diaspora in the Netherlands, as well as the relatively smaller Dutch community living in Turkey, will face uncertainty, and this will have an economic impact too. An estimated 400,000 Turks live in the Netherlands, according to a diaspora association, and there are 25,000 businesses with Turkish owners, most of them smaller enterprises. Many of these companies are doing business with Turkey, and they are negatively affected by the current dispute between the two governments. So is the much smaller Dutch community in Turkey. But it is equally active in the economy, especially in the tourism sector. Declining tourist numbers will hurt Turkish and Dutch operators alike, and it might take some time to recover to pre-crisis levels of business.

     

    Third, the diplomatic spat is likely to have a negative effect on efforts to revise the Turkish-EU Customs Union. The union, which took effect in 1996, is outdated, failing to catch up with the requirements of today’s global trade. Ankara and Brussels had begun talks to improve the deal, but the current circumstance is likely to overshadow attempts based on economic rationality.

    This week Turkish football team Be?ikta? played the Greek side Olympiakos in the European cup. The Turks won 4-1 helped by two goals from Ryan Babel, the Amsterdam-born Dutch striker. Turkey and the Netherlands have links that are closer than many realize, and it will benefit both to keep them intact.

  • Hysteria on the Left Over Russia Has Reached a Fevered Pitch

    We first need to remember where this all started — nearly a hundred years ago Trotsky was exiled from Russia; he packed his bags and headed for Mexico to start what is known today as the neocon movement. Their stated goal was to spread a brand of government via military means — remaining in a state of revolution at all times. They are, essentially, communists masquerading as capitalists and they co-opted the republican party. Today, the children of the original neocons, like Bill Kristol, have hard-ons for Russia — because it’s in their blood. They can’t help themselves.

    Now the left were always fans of the Soviet Union — because communism appealed to them. If you recall, Ted Kennedy actually reached out to the Russians in the 80’s to broker a deal with them in exchange for their help in undermining Reagan. It failed and Reagan ended up being the best leader since JFK.

    But ever since communism ended in Russia, the left have been very sore with them and have merged ideologies with the neocons to foment strife with them. Events transpiring in the Ukraine was the first excuse for these sleeper cells in our government to activate — trying to lure Putin into an escalation. When Putin went into Syria, to defend his only deep water port in the Mediterranean and take out ISIS, who we armed and permitted to run wild about the region, we had Turkey shoot down their fighter jet followed by Secretary Kerry requesting that we send troops into Syria to support the ‘rebels’ — who were/are terrorists.

    When John Podesta’s emails were released, it was a massive embarrassment to the DNC and Hillary Clinton. Rumors of a child-pedo ring were running rampant and weird things started to happen — such as the death of Seth Rich. Following Trump’s victory, this narrative that Russia somehow hacked Podesta’s emails and then delivered them to Wikileaks was energized to the tenth degree by the mercenary media, neocons, and the left. They’ve been using this feeble and easy to disprove narrative to undermine President Trump — because he represents everything the establishment hates. They’re impugning the honor and integrity of a military giant, one with advanced nuclear weaponry — because their childish behavior demands it.

    Would you want your son drafted into a war to fight and die in Moscow because John “I don’t need pizza now” Podesta’s email box was hacked? Get the fuck out of here with these lunatics.

    I clipped this from the Russian ‘echo-chamber’ Infowars — who did a good job documenting some of the more outlandish statements made by the left — regarding Russia. These are not the actions and words of stable people.

    Content originally generated at iBankCoin.com

  • Davos For Democrats: DNC Mega Donors Meet At Mandarin Oriental Hotel To Plot "The Resistance"

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    The Daily Beast just published an article previewing what should be referred to from this day forth as Davos for Democrats; a big-money infused orgy of wealthy donors telling their political puppets what to do as they mingle at one of the most luxurious hotel chains in the world.

    Clearly learning absolutely zero lessons from their recent election pummeling, the Democratic Party is simply doubling down on its hopelessly failed strategy. Namely, a focus on more cash, even more donor influence and an absence of any new or interesting ideas that could actually get frustrated and struggling American voters excited. The post referenced below reads like something out of The Onion and would be downright hilarious if it wasn’t so pathetic and deranged.

    From the article, Democratic Donors Gather in D.C. to Plot the Resistance:

    The Democratic Party’s top officials will meet with some of their wealthiest donors in Washington, D.C., this week to plot the Trump resistance, according to documents obtained by The Daily Beast.

     

    The chairs of the Democratic National Committee and the party’s House and Senate campaign arms will huddle with activists, operatives, and deep-pocketed Democratic financiers at a biannual conference hosted by the Democracy Alliance, a leading left-wing donor collaborative at Washington’s ritzy Mandarin Oriental hotel.

     

    They will discuss strategy for immediate opposition to President Donald Trump’s policies, begin laying the groundwork for Democratic campaigns in next year’s midterm elections, strategize future efforts for congressional redistricting, and promote an agenda focused on the state level, where Democrats still retain some power and hope to build a model for national progressive victories. And perhaps most importantly, map out how to fully fund their opposition to all things Trump.

     

    The Alliance brings together high-dollar liberal donors—individuals, labor unions, and charitable foundations—that pledge to give at least $200,000 annually to a suite of left-wing organizations. Through its “partners,” as the donors are known internally, the Alliance in 2015 raised $75 million for its supported organizations, an annual record for the group.

    A lot of good that $75 mill did. Encouraging to see the solution is just throw more donor money at the problem.

    Those include the Center for American Progress, a liberal policy shop that has turned its 501(c)(4) arm into an anti-Trump “war room,” and Media Matters for America, a media-focused rapid response group that has recently retooled its efforts toward “fake news” and pro-Trump disinformation.

    Dumb and Dumber.

    And on Friday, the Alliance will host what it describes as “the first in a regular series of off-the-record dialogues between progressive political donors and Democratic Party officials about the future.”

    A regular series of off-the-record meetings between donors and Democratic officials. You can’t make this stuff up.

    Donors in attendance will include Michael Vachon, a top aide to billionaire hedge fund manager George Soros; health care technology mogul Paul Egerman; Dallas philanthropist Naomi Aberly; Susan Sandler, the daughter of subprime mortgage pioneer Herb Sandler; and Ian Simmons, the husband of Hyatt hotel fortune heiress Liesel Pritzker Simmons.

     

    The Alliance’s donors have recently had to step up their financial commitments as the group retools its mission from policymaking by way of an allied White House to opposition to Republican dominance at all levels of government.

     

    In addition to their annual contribution thresholds, Alliance partners must chip in to support the donor collaborative’s operations. Partner dues increased by between $5,000 and $10,000 this year to support the Alliance’s revamped mission, BuzzFeed News reported in January.

    Long on money, short on ideas. That’s the Demcoratic Party for you.

    That dovetails with recent Alliance strategy, which has focused on reversing dramatic Democratic losses at the state level ahead of the 2020 census and redistricting process. The Alliance considers a Democrat-friendly round of redistricting essential to future progressive policy gains.

    A focus on redistricting. Again, no ideas.

    Another event, featuring Planned Parenthood president Cecile Richards, will examine the “opportunity, spurred by the enormous energy of ordinary people taking grassroots action, to oppose the Trump agenda and how to channel this energy for a change in the nation’s political direction, starting with building back power and winning critical state elections in 2017 and 2018.”

    This article is just so telling about the priorities of the donor-controlled Democratic Party. They remain focused on money, redistricting and “channeling energy” (i.e. manipulating voters), as opposed to ideas. The party has nothing to offer Americans other than Trump opposition and Russia conspiracy theories.

    The first of those break-out sessions will plot “strategy and plans to protect the safety net for low-income families and individuals.” Among its attendees will be the director of US Programs for Soros’s Open Society Foundations.

    Perhaps getting the opinions of actual poor people might be useful, as opposed to listening to the operatives of billionaires.

    That discussion will be held at Washington’s elite Cosmos Club, whose members—which have included three U.S. presidents, two vice presidents, and 12 Supreme Court justices—pay annual dues of about $2,000.

    How grassroots of them.

    Meanwhile, did you watch the clip of Nancy Pelosi being asked by Anderson Cooper who the leader of the party is?

    Obama and Hillary Clinton.

    This party is an absolute joke, and the quicker we admit this and create something else, the better. It hasn’t changed, and it’s not going to.

  • China 'Shadow Banks' Crushed As Liquidity Costs Hit Record High

    During the so-called Chinese Banking Liquidity Crisis of 2013, the relative cost of funds for non-bank institutions spiked to 100bps. So, the fact that the 'shadow banking' liquidity premium has exploded to almost 250 points – by far a record – in the last few days should indicate just how stressed Chinese money markets are.

    While interbank borrowing rates have climbed across the board, the surge has been unusually steep for non-bank institutions, including securities companies and investment firms. They’re now paying what amounts to a record premium for short-term funds relative to large Chinese banks, according to data compiled by Bloomberg.

    The premium is reflected in the gap between China’s seven-day repurchase rate fixing and the weighted average rate, which, by Bloomberg notes, widened to as much as 2.47 percentage points on Wednesday after some small lenders were said to miss payments in the interbank market. Non-bank borrowers tend to have a greater influence on the fixing, while large banks have more sway over the weighted average.

    "It’s more expensive and difficult for non-bank financial institutions to get funding in the market," said Becky Liu, Hong Kong-based head of China macro strategy at Standard Chartered Plc. “Bigger lenders who have access to regulatory funding are not lending much of the money out.”

    Without access to deposits or central bank liquidity facilities, many of China’s non-bank institutions must rely on volatile money markets. As Bloomberg points out, The People’s Bank of China has been guiding those rates higher in recent months to encourage a reduction of leverage, while also stepping in at times to prevent a liquidity crunch.

    The PBOC responded to this week’s jump in borrowing costs by making an unscheduled injection of hundreds of billions of yuan on Tuesday, and it followed that with another addition of cash through daily open-market operations on Wednesday.

    "The PBOC is allowing smaller lenders to miss payments in order to force financial institutions to de-leverage," said Harrison Hu, chief greater China economist at Royal Bank of Scotland Group Plc in Singapore.

     

    "But it will keep a fine balance. It doesn’t want the pressures to become out of control. There’s a possibility that the PBOC will directly inject funds in smaller banks, if the cash shortage continues.”

    As Goldman noted, the rate surge reflects a combination of:

    • A tightening bias by the PBOC. The central bank has shifted policy stance since autumn last year, but the clearer interbank rate rise in recent days suggests that the hawkish bias has stepped up further.
    • Diminished clarity of the role of interbank rates in the PBOC’s policy framework. Since mid-2015, interbank rates had been kept largely steady, partly reflecting the PBOC’s efforts to build up a policy rate framework centering on interbank rates. The PBOC has also introduced SLF (standing lending facility), which is understood as a tool to keep volatility in interbank funding conditions low. However, in a signal that deviates from these previous efforts, the PBOC last Thursday tried to dissociate interbank rates from “policy rates”, which the PBOC said should mean benchmark bank lending and deposits rates. The comment appeared to open up a bigger scope for the PBOC to allow interbank rates to move higher (with the possible intention to avoid conflict with its official “stable and neutral” policy stance or potential pushback from other policy authorities).
    • The SLF mechanism appears to have not functioned effectively in recent days. There have been occasional breaches of the general 7-day repo rate above the SLF rate (3.35% per PBOC’s official communication, although it was reportedly raised to 3.45% last week). This suggests that SLF has not effectively fulfilled its supposed function of imposing a ceiling to interbank rates. One possible reason is that SLF is accessible only by banks, and much of the spikes of the general 7-day repo rate have been a result of liquidity scramble by NBFIs (which have no SLF access), while banks' interbank funding cost (as measured by DR007; Exhibit 1) has remained more moderate and still below the SLF rate (note that the 7-day repo fixing rate is partly based on funding cost of NBFIs as well). Nevertheless, the apparent lack of effectiveness of SLF in suppressing interbank rate volatility might have weakened the anchoring of the market’s rate expectations in the near term, and such uncertainty could have compounded the liquidity squeeze.
    • Continued high interbank repo borrowing by funds. The wide gap of R007-DR007 reflects continued stress imposed by NBFIs, likely particularly funds, on the funding market. Indeed, as of end-Feb, interbank repo borrowing by funds remained high at over 30% of the interbank repo borrowing (Exhibit 2) despite the increased pressure on the commercial viability of repo trades (borrowing via interbank repo to finance long-dated bond holdings).
    • Regulatory impact. The PBOC has tightened the prudential requirements (particularly on the growth of banks' balance sheet) under its MPA examination, which is to be conducted at quarter-end. This has likely further contributed to, and amplified the impact of, a tightening in the interbank market.

    In total, the interbank rate volatility may remain quite high in the coming days, especially in light of the near-term consideration of MPA examination at quarter-end and the PBOC's apparent deviation from the previous monetary policy framework. Alternatively, today's plunge in the dollar may have had a secondary purpose of easing Chinese financial conditions, where the ongoing dollar rally has pushed the local financial sector to the brink of illiquid collapse.

  • Is This The Sound Of The Bottom Falling Out Of The Auto Industry?

    Authored by Wolf Richter via WolfStreet.com,

    Not quite, not yet, but it’s not good either.

    Let’s hope that the problems piling up in the used vehicle market – and their impact on new vehicle sales, automakers, $1.1 trillion in auto loans, and auto lenders – is just a blip, something caused by what has been getting blamed by just about everyone now: the delayed tax refunds.

    In its March report, the National Association of Auto Dealers (NADA) reported an anomaly: dropping used vehicle prices in February, which occurred only for the second time in the past 20 years. It was a big one: Its Used Car Guide’s seasonally adjusted used vehicle price index plunged 3.8% from January, “by far the worst recorded for any month since November 2008 as the result of a recession-related 5.6% tumble.”

    The index has now dropped eight months in a row and hit the lowest level since September 2010. The index is down 8% year over year, and down 13% from its peak in 2014.

    The price decline spanned all segments, but it hit the two ends of the spectrum — subcompact cars and the luxury end — particularly hard. The list shows the change in wholesale prices from January to February in vehicles up to eight years old:

    NADA blamed three factors:

    1. The surge in new vehicle incentive spending. Automakers, drowning in unsold inventories on dealer lots and desperate to move the iron and keep their plants running, increased incentive spending by 18% to the highest level in over a decade. This made new vehicle more competitive with late-model used vehicles. So this would be on the demand side.
    2. The growing flood of used vehicles going through auction. Over the first two months this year, volume of vehicles up to eight years old rose by about 5% year-over-year. Volume of late-model vehicles – the supply from rental car companies and lease turn-ins – jumped 10%. So that’s on the supply side.
    3. The IRS tax refund fiasco. Restaurants, retailers, and others are already blaming various February debacles on these delayed tax refunds. After the IRS was hit with millions of fake e-filed tax returns last year that claimed the Earned Income Tax Credit and the Additional Child Tax Credit, Congress required the agency to delay sending out refunds this year.

    It’s big money. According to the IRS, refunds issued through February 10 plunged 69% from the same period a year ago. That’s $65 billion that didn’t make it into consumers’ bank accounts. But then the money was unleashed. In the week ending February 17, the IRS sent out a record $74 billion in refunds. By the week ending February 24, refunds were down only 10%, or $15 billion, year-over-year. So most of the problem was resolved by the end of February.

    That might explain part of the problem on the demand side, at least at the lower end of the scale. But it’s hard to explain the plunge in prices at the luxury end. Also, these are wholesale prices. They don’t react instantly to a brief consumer cash crunch caused by tax-refund delays, now resolved. Something else appears to be going on.

    The report, in attempting a forecast, cautioned:

    February’s unusually soft showing makes pinpointing where used prices will go over the next few months a bit more challenging. However, given the slower than usual rollout of federal tax refunds, it’s assumed prices will be somewhat stronger in March and April than originally anticipated.

    The Used Vehicle Index by Manheim, the world’s largest wholesale auto auction, didn’t pick up a massive drop in used vehicle prices over the past few months, though it too is showing some weakness. The index edged down 0.2% in February. The report pointed out that, “given a sharp decline in pricing in February of last year, the Manheim Index now shows a year-over-year gain of 1.1%.”

    The index has dropped in six of the past seven months (chart), but in small increments, and as it says, “stability remains the watchword.” It too acknowledge headwinds for the market, including the “heavy new vehicle inventory and incentives,” and “a crazy tax refund season.”

    Why are used vehicle wholesale prices important?

    For one, they matter to lenders. Used vehicle wholesale prices determine the value of the collateral for $1.11 trillion in auto loans that have boomed on higher prices, higher unit sales, longer maturities (the average hit a new record of 66.5 months in Q4), and higher loan-to-value ratios (negative equity):

    Dropping wholesale prices increase loan losses for lenders as recovery is lower. Declining wholesale values of lease turn-ins, if the trend persists, impacts how finance companies structure the lease terms, thus raising the costs for the customers and putting a damper on leasing activity.

    All this puts pressure on new vehicle sales, further pushing automakers to pile on even larger incentives in order to move the units, grapple with inventories, and keep plants open. This works for a while – there’s nothing like big-fat incentives to bring out reluctant buyers. But incentives, when everyone is doing them, are front-loading sales. This is ultimately self-defeating and gets very costly even as sales begin to decline. It was a contributor in the collapse of the industry during the Financial Crisis.

    And there are well-established patterns of customers switching between new vehicles and late-model used vehicles. Large incentives by automakers put pressure on late-model used vehicles. In turn, falling prices on the used vehicle side cannibalize sales from the new vehicle side. In other words, they compete with each other, often on the same dealer lot. Especially if demand is lackluster despite the incentives, these patterns can trigger a downward spiral that is difficult to get out of.

    First oil & gas, then construction, then new vehicle sales. Read…  How Auto Sales Are Getting Crushed in Houston

  • BOMBSHELL: CIA Whistleblower Leaked Proof Trump Under "Systematic Illegal" Surveillance Over Two Years Ago: FBI Sat On It

    The same day House Intelligence Committee chairman Devin Nunes gave a press conference disclosing that President Trump had been under “incidental surveillance,” Attorney and FreedomWatch Chairman, Larry Klayman, sent a letter to the House Committee on Intelligence imploring them to pursue the claims and evidence presented under oath at a Washington DC FBI Field Office by his client – CIA / NSA Whistleblower Dennis Montgomery – who Klayman claims “holds the keys to disproving the false claims…   …that there is no evidence that the president and his men were wiretapped”

    When Montgomery attempted to deliver this information through the appropriate channels two years ago, the former CIA and NSA contractor wasn’t given the time of day:

    [W]hen Montgomery came forward as a whistleblower to congressional intelligence committees and various other congressmen and senators, including Senator Charles Grassley, Chairman of the Senate Judiciary Committee, who, like Comey, once had a reputation for integrity, he was “blown off;” no one wanted to even hear what he had to say.

    As a result, Montgomery went to attorney and FreedomWatch founder Larry Klayman – who then approached the FBI: 

    Under grants of immunity, which I obtained through Assistant U.S. Attorney Deborah Curtis, Montgomery produced the hard drives and later was interviewed under oath in a secure room at the FBI Field Office in the District of Columbia. There he laid out how persons like then-businessman Donald Trump were illegally spied upon by Clapper, Brennan, and the spy agencies of the Obama administration.

    Montgomery left the NSA and CIA with 47 hard drives and over 600 million pages of information, much of which is classified, and sought to come forward legally as a whistleblower to appropriate government entities, including congressional intelligence committees, to expose that the spy agencies were engaged for years in systematic illegal surveillance on prominent Americans, including the chief justice of the Supreme Court, other justices, 156 judges, prominent businessmen such as Donald Trump, and even yours truly. Working side by side with Obama’s former Director of National Intelligence (DIA), James Clapper, and Obama’s former Director of the CIA, John Brennan, Montgomery witnessed “up close and personal” this “Orwellian Big Brother” intrusion on privacy, likely for potential coercion, blackmail or other nefarious purposes. 

     

    He even claimed that these spy agencies had manipulated voting in Florida during the 2008 presidential election, which illegal tampering resulted in helping Obama to win the White House.

    Given the fact that the FBI had Montgomery’s testimony and evidence for over two years, Klayman traveled to Washington DC last Thursday to meet with Committee Chairman Devin Nunes in the hopes that he would ask FBI Director Comey why the FBI hadn’t pursued Montgomery’s evidence. When Klayman arrived to speak with Nunes, he was “blown off” and instead shared his information with committee attorney Allen R. Souza – who Klayman requested in turn brief Nunes on the situation.

    During my meeting with House Intelligence Committee counsel Allen R. Sousa I politely warned him that if Chairman Nunes, who himself had that same day undercut President Trump by also claiming that there is no evidence of surveillance by the Obama administration, I would go public with what would appear to be the House Intelligence Committee’s complicity in keeping the truth from the American people and allowing the FBI to continue its apparent cover-up of the Montgomery “investigation.”

     

    And, that is where it stands today. The big question: will House Intelligence Committee Chairman Nunes do his job and hold FBI Director Comey’s feet to the fire about the Montgomery investigation?

    Klayman has detailed all of this in a NewsMax article, followed up with an official letter to Chairman Nunes today, requesting that he question Comey on Montgomery’s evidence. Perhaps this explains Nunes’ impromptu press conference today admitting that Trump’s team was under “Incidental Surveillance” before making his way to the White House to discuss with the President.

    So – we know that evidence exists from a CIA / NSA contractor turned whistleblower, detailing a massive spy operation on 156 judges, the Supreme Court, and high profile Americans including Donald Trump. See the letter below:

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    Content originally generated at iBankCoin.com * Follow on Twitter @ZeroPointNow

  • Mexico's Finance Minister Warns Mexican Companies "Not To Participate In Construction Of The Wall"

    As Trump seeks proposals for an impenetrable, yet “aesthetically pleasing”, 30-foot border wall, Mexico’s government on Tuesday warned Mexican companies that it would not be in their best “interests” to participate in the project even though there will be no explicit legal restrictions or sanctions to stop them if they tried.  Per Reuters:

    “We’re not going to have laws to restrict (companies), but I believe considering your reputation it would undoubtedly be in your interest to not participate in the construction of the wall,” said Mexican Economy Minister Ildefonso Guajardo.

     

    “There won’t be a law with sanctions, but Mexicans and Mexican consumers will know how to value those companies that are loyal to our national identity and those that are not,” Guajardo added.

     

    His comments echo those of Mexico’s foreign minister Luis Videgaray, who said on Friday that Mexican companies that see a business opportunity in the wall should “check their conscience” first.

    Despite the warnings, Cemex, one of the world’s largest cement producers, has said it is open to providing quotes to supply the raw materials for the border wall and competitor Grupo Cementos de Chihuahua has also signaled a readiness to work on the project.

    Meanwhile, the only Mexican company, out of some 720 in total, to put its name down on the U.S. government’s website for business opportunities as an interested vendor for the wall construction, is a small, four-member concern from the central city of Puebla that wants to provide LED lights that it imports mostly from China.

    Mexico Econ Minister

    Ildefonso Guajardo Villarreal, Mexico’s Economy Minister

     

    Of course, while the Mexican government offers up warnings without any real teeth, in the Communist country of California, politicians have actually introduced legislation to ban its pension funds from investing in companies that provide their services to build the wall…because who care about fiduciary duties?  From our post yesterday:

    A new piece of legislation recently introduced in California, Assembly Bill (AB) 946 or the “Resist the Wall Act,” would require the California Public Employee Retirement System (CalPERS) and the California State Teachers Retirement System (CalSTRS) – the nation’s first and second largest pension funds – to liquidate within 12 months any investments in companies involved in the construction of President Trump’s “Wall of Shame”.  The bill also requires the two pension funds to report to the Legislature and the Governor by January 1, 2019 with a list of companies from which they have liquidated investments or plan to do so.

     

    Not surprisingly, the legislation was penned by a trio of Cali democrats including Assemblymembers Phil Ting (D-San Francisco), Lorena Gonzalez Fletcher (D-San Diego), and Eduardo Garcia (D-Coachella).

    //platform.twitter.com/widgets.js

     

    In a press release posted to his website, Ting said that “Californians build bridges not walls” and declared for all of California that they want no part of Trump’s “Wall of Shame.”

    “Californians build bridges not walls.  This is a wall of shame and we don’t want any part of it.  Immigrant stories are the history of America and this is a nightmare,” said Ting.  “Asian Americans know the pains of being blocked from immigrating to the United States.  We endured that indignity under an act of Congress for decades.  We must stand together and fight this wall because it symbolizes weakness and hate to the world.”

     

    “The state’s contracting and investment practices should reflect the values of our state,” said Gonzalez Fletcher.  “It’s clear the people of California don’t want to invest in the hateful values that the Trump wall represents.”

     

    “It is counterproductive to invest in projects that will not serve the best interest of all Californians.  It is the responsibility of the legislature to safeguard our values and create opportunities for economic growth, rather than to bar them,” stated Garcia.  “We cannot build up our dreams if our resources are being used to build a wall.”

    Shockingly, Villarreal did not provide an update on how/where Mexico will source the $15-$20 billion in funds required to pay for the wall during his comments.

  • Doug Casey Has "Never Seen Anything Like This"

    Via InternationalMan.com,

    Nick Giambruno: Doug, what do you think is the root problem of the US economy and financial system?

    Doug Casey: There are several, including incompetence, corruption and, of course, just plain stupidity. But there's not much you can do about those things; they're intrinsic to government. But perhaps something can be done about ignorance, which starts in school: What, for instance, do most people learn about economics and finance? Very little. As Mark Twain said, "It's not what people know that's the problem, it's what they think they know that just ain't so."

    All of the economics that's taught in the schools—what little that is taught—is completely backward. Plus, almost everything you hear on television is conventional, unsound, and wrong.

    I'd like to believe anybody that's reading this right now that has at least heard of the "Austrian school of economics," understands the value of gold, and knows a bit of basic economic theory and history. Without at least some fundamentals, people stand to suffer a huge drop in their standard of living if the economy goes sideways.

    When the current financial crisis started, in 2007, it was the leading edge of the huge financial hurricane that hit in earnest in 2008 and 2009. Now we're in the eye of this hurricane, but we're going into the trailing edge of the storm, and it's going to be much worse and much different than what happened in '08 and '09. Or, for that matter, in the 1930s. So hold onto your hat.

    Nick Giambruno: Can President Trump fix this mess?

    Doug Casey: Everybody is talking about Donald Trump. He's a complex individual. I actually made money bets that he would win the election. But that’s not the only reason I’m glad he won.

    Is Trump a good thing or a bad thing? They say, "Oh he's a racist." "Oh he's a sexist." "Oh he's a homophobe." "Oh he hates Muslims." Frankly we should analyze those things, but I think they're basically all lies. In fact, he's just a businessman, flying by the seat of his pants. He doesn't have a core philosophy.

    What's going on in the US now is a culture clash. The people that live in the so-called "red counties" that voted for Trump—which is the vast majority of the geographical area of the US, flyover country—are aligned against the people that live in the blue counties, the coasts and big cities.

    They don't just dislike each other and disagree on politics; they can no longer even have a conversation. They hate each other on a visceral gut level. They have totally different world views. It's a culture clash.

    I've never seen anything like this in my lifetime. There hasn't been anything like this since the War Between the States, which shouldn't be called "The Civil War," because it wasn't a civil war. A civil war is where two groups try to take over the same government. It was a war of secession, where one group simply tries to leave.

    We might have something like that again, hopefully nonviolent this time. I don't think the US should any longer remain as one political entity. It should break up so that people with one cultural view can join that group and the others join other groups. National unity is an anachronism.

    Nick Giambruno: What would that look like?

    Doug Casey: Well look, my ideal situation politically is this… right now the world is divided into about 220 different nation states, different countries. That's a very bad idea, because almost all of these nation states are trying to weld together people of different views, philosophies, languages, religions, ethnicities, and races, and it doesn’t work.

    This is a major reason why Africa—which I'm pretty familiar with—just hasn't gone anywhere. Every one of those countries, as well as every one of the countries in the Mid-East, Central Asia, and I'll include India, they're not real countries. They were put together arbitrarily in the boardrooms of Europe in the 19th century, and they have no internal consistency. So different groups in those countries try to take over the government so they can use it to steal.

    Instead of 220 nation states we should ideally have about seven billion. Everybody should be a sovereign individual.

    Nick Giambruno: What does Trump mean for the stock market?

    Doug Casey: Trump is associated with the free market, even though he understands nothing about economics. He's not really a free market guy, he's an authoritarian, not a libertarian. And he has some disastrous economic ideas—like putting up import barriers and replacing Obamacare. He's trying to run the country as if it were his privately owned company.

    He also has some good economic ideas. Cutting regulations, wonderful, and he's doing it. Cutting taxes, fantastic. This is very good.

    But he appears to want a weak dollar: What he's really doing is destroying American savings and making imported goods more expensive. This is horrible. I mean this could actually be the straw that breaks the camel's back. A Smoot-Hawley tariff lookalike.

    I applaud the fact he also despises Progressives, Cultural Marxists, Social Justice Warriors, the media, academics, and the like. But, again, he's no libertarian.

    Nick Giambruno: Where do you think the stock market is headed?

    Doug Casey: Well, anything is possible. I really believe that. So will the Dow go to 40,000? Yeah, it's possible, but it's highly unlikely.

    I wrote Strategic Investing back in 1982. At the bottom of the bond market, when rates were 15%. When the Dow was under 1,000. I wrote, "The Dow's going to 3,000," and everybody said, "You're completely insane, that's a triple of the Dow." Well it went to 3,000, and then it went to over 20,000 over the next generation.

    All I can say about the stock market is, by any traditional parameters of value—price-earnings ratio, price-to-book ratio, dividend yields—it's now very overpriced. And bonds aren't just in a bubble. They're in a hyperbubble.

    The economy itself is head-over-heels in debt. What does "debt" mean? It means that some people borrowed money and owe it to other people who are going to want it back. When you borrow money two things usually happen. First, you're taking capital that others saved in the past, and are probably using for consumption, not to create more wealth. And second, you're mortgaging your future, which makes you a serf when you have to pay it back. All that debt is a ticking bomb.

    So my feeling is the economy can collapse, and with it earnings on the stock market, and with it prices of stocks. So I want no part of the stock market right now.

    Nick Giambruno: What do you want to buy right now?

    Doug Casey: You want to buy when things are cheap; very little is cheap. People don't have a sense of history—they don't realize how cheap things can get. I mean, the Dow Jones in the past, at times its yield has been 6%, 8%, 10%. At the bottom of the last depression, after dividends were cut significantly, it yielded 13%.

    I watch a lot of international stock markets. I remember in the mid-1980s, three stock markets—Hong Kong, Belgium, and Spain—the indices were all yielding 12% to 15% in current dividends. They were selling for two times earnings and half of book value. Now that's when you buy stocks. You don't buy them at the nosebleed levels where they are right now.

    Nick Giambruno: Switching gears to the War on Cash. Why are governments working to phase out cash?

    Doug Casey: It's all the governments of the world. This is not just happening in India, which is basically a primitive country where half the people still live on a dollar or two a day—as unbelievable as that sounds. But in advanced countries, in Europe, especially Sweden and Finland, even in backward Uruguay they're trying to get rid of cash.

    They say, "Well, drug dealers use cash. Criminals use cash." Yes, of course, and free men use cash, because money equals freedom. Money equals all the things you want to have for yourself and provide for other people. You don’t want the State in control of your money.

    They say, "Well, that's okay, you just have to cycle money through your bank account." But when money has to go through your bank account, then that's the only way that you can buy or sell anything. The government controls your bank account. If you become politically unpopular, for whatever reason, they can shut off your bank account. And they know exactly what you’re doing, what you have, and what you like.

    The thing is, without cash you're completely under the control of your rulers, and that is not acceptable to a free man. These people aren’t angels. In fact, you don’t get the best people in government—you get some of the worst people.

    Look, we shouldn't be using the dollar to start with. It used to be the dollar was just a name for a certain amount of gold, 1/20th of an ounce. Then people forgot that the dollar represented something. Now the dollar is just a floating abstraction.

    It's an insane idea. It's a criminal idea. It's anti-human.

    But the average person who's got a smartphone thinks, "Oh that would be convenient. I won't have to worry so much about somebody sticking me up for the dollars in my wallet." But even that's wrong; phones are stolen, and accounts are hacked. There are zero advantages to a cashless society—except to the State.

    Nick Giambruno: What are your thoughts on bitcoin?

    Doug Casey: I'm of two minds about bitcoin. Aristotle in the Fourth Century B.C. gave the five characteristics of anything that can be used as good, reliable money.

    It has to be durable, which is why we don't use wheat as money.

    It has to be divisible, which is why we don’t use artwork as money. You can't divide the Mona Lisa into pieces.

    It has to be convenient, which is why we don't use lead as money. It takes too much to be of value.

    It has to be consistent, which is why we don’t use real estate as money. Every piece is different from every other.

    Last, it has to have value in and of itself, which is why we shouldn't use paper as money.

    So the problem with bitcoin is that its only value, as far as I can determine, is as a transfer mechanism. If you want to send money to somebody on the other side of the world right now you've got to go through the SWIFT system in your banks. It's expensive. It's inconvenient. It's not private.

    But with bitcoin—assuming that the person on the other side of the world can find somebody that wants to accept bitcoin—you can do it instantly and for no cost. That's the value of bitcoin. It's a great transfer mechanism.

    If the dollar starts losing value at 15%, 20%, 25% per year—which is entirely possible over the next few years—people might go to these cryptocurrencies just to get out of dollars. The government can't easily control them, they're limited in amount, and there will be more confidence in them.

    Right now they're interesting speculative vehicles for capital gains, not just bitcoins, but some of these new ones that have different characteristics, as well. They're like buying penny stocks, interesting. A speculative bubble could easily develop in them.

    Nick Giambruno: Why do economists spend so much time trying to decipher what the Fed will do next?

    Doug Casey: Well there's a whole class of talking heads that make a living out of predicting what the Fed is going to do. It's absurd.

    Let me say something radical: The Fed has no right to exist. It serves no useful purpose. It should be abolished. It's worse than unnecessary. The Federal Reserve is destructive.

    So I don't try to second-guess what these idiots are going to do. But the last thing that they should be doing—nothing they do is good—is controlling interest rates. That's for the market to control. Setting the price of money is as stupid as the government trying to set the price of candy bars in a store. It's equally ridiculous, but much more destructive.

    Nick Giambruno: What do you think is going to happen to the US dollar?

    Doug Casey: This is very important. When you work and produce you're paid in dollars, and if you want to get ahead in life you save those dollars. The problem is, after you've saved dollars—what happens if those dollars lose value overnight? Everything you've worked and planned for vanishes with the dollars. This has happened numerous times in other countries with other currencies.

    The problem with the dollar is it's the unsecured liability of the US government, which is bankrupt. In the years to come that's going to become very obvious, with catastrophic consequences for the average American.

    How can you get ahead in the world when you have to save a depreciating asset? That's why in these third world countries the average guy keeps falling further and further behind, because all he can save is the local currency, and the currency consistently turns into toilet paper, so he's always behind the eight ball.

    The same is going to happen in the US on a much grander scale. It's going to be much more serious, because even in all these countries smarter people try to save dollars, they don't save pesos or kwacha or ringgit, they don't save these horrible currencies. They try to get hold of US dollars. When the dollar is devastated, they're going to blame Americans for their currency losing value. This has all kinds of bad consequences.

    The dollar is going to cease being the world's reserve currency sometime in the next decade; I'm confident of that. The Chinese are making a lot of progress with the yuan. The euro, however, is going to cease to exist. The European Union is going to break up. Europe has all kinds of problems.

    Now that's the bad news, but the good news is that during a time of financial chaos most of the real wealth in the world will still exist. It's just going to change ownership. You want to be one of the people on the winning side of that equation.

    *  *  *

    Widespread economic chaos is coming. But you don't need to fear it. Doug Casey and his team recently released this time-sensitive video with all the details. Click here to watch it now.

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Today’s News 22nd March 2017

  • The Kagans Are Back; Wars To Follow

    Authored by Robert Parry via The Strategic Culture Foundation,

    The Kagan family, America’s neoconservative aristocracy, has reemerged having recovered from the letdown over not gaining its expected influence from the election of Hillary Clinton and from its loss of official power at the start of the Trump presidency.

    Former Assistant Secretary of State for European Affairs Victoria Nuland, who pushed for the Ukraine coup and helped pick the post-coup leaders. (She is the wife of neocon theorist Robert Kagan.)

    Back pontificating on prominent op-ed pages, the Family Kagan now is pushing for an expanded U.S. military invasion of Syria and baiting Republicans for not joining more enthusiastically in the anti-Russian witch hunt over Moscow’s alleged help in electing Donald Trump.

    In a Washington Post op-ed on March 7, Robert Kagan, a co-founder of the Project for the New American Century and a key architect of the Iraq War, jabbed at Republicans for serving as “Russia’s accomplices after the fact” by not investigating more aggressively.

    Then, Frederick Kagan, director of the Critical Threats Project at the neocon American Enterprise Institute, and his wife, Kimberly Kagan, president of her own think tank, Institute for the Study of War, touted the idea of a bigger U.S. invasion of Syria in a Wall Street Journal op-ed on March 15.

    Yet, as much standing as the Kagans retain in Official Washington’s world of think tanks and op-ed placements, they remain mostly outside the new Trump-era power centers looking in, although they seem to have detected a door being forced open.

    Still, a year ago, their prospects looked much brighter. They could pick from a large field of neocon-oriented Republican presidential contenders or – like Robert Kagan – they could support the establishment Democratic candidate, Hillary Clinton, whose “liberal interventionism” matched closely with neoconservatism, differing only slightly in the rationalizations used for justifying wars and more wars.

    There was also hope that a President Hillary Clinton would recognize how sympatico the liberal hawks and the neocons were by promoting Robert Kagan’s neocon wife, Victoria Nuland, from Assistant Secretary of State for European Affairs to Secretary of State.

    Then, there would have been a powerful momentum for both increasing the U.S. military intervention in Syria and escalating the New Cold War with Russia, putting “regime change” back on the agenda for those two countries. So, early last year, the possibilities seemed endless for the Family Kagan to flex their muscles and make lots of money.

    A Family Business

    As I noted two years ago in an article entitled “A Family Business of Perpetual War”: “Neoconservative pundit Robert Kagan and his wife, Assistant Secretary of State Victoria Nuland, run a remarkable family business: she has sparked a hot war in Ukraine and helped launch Cold War II with Russia and he steps in to demand that Congress jack up military spending so America can meet these new security threats.

    Prominent neocon intellectual Robert Kagan. (Photo credit: Mariusz Kubik, http://www.mariuszkubik.pl)

    This extraordinary husband-and-wife duo makes quite a one-two punch for the Military-Industrial Complex, an inside-outside team that creates the need for more military spending, applies political pressure to ensure higher appropriations, and watches as thankful weapons manufacturers lavish grants on like-minded hawkish Washington think tanks.

     

    “Not only does the broader community of neoconservatives stand to benefit but so do other members of the Kagan clan, including Robert’s brother Frederick at the American Enterprise Institute and his wife Kimberly, who runs her own shop called the Institute for the Study of War.”

    But things didn’t quite turn out as the Kagans had drawn them up. The neocon Republicans stumbled through the GOP primaries losing out to Donald Trump and then – after Hillary Clinton muscled aside Sen. Bernie Sanders to claim the Democratic nomination – she fumbled away the general election to Trump.

    After his surprising victory, Trump – for all his many shortcomings – recognized that the neocons were not his friends and mostly left them out in the cold. Nuland not only lost her politically appointed job as Assistant Secretary but resigned from the Foreign Service, too.

    With Trump in the White House, Official Washington’s neocon-dominated foreign policy establishment was down but far from out. The neocons were tossed a lifeline by Democrats and liberals who detested Trump so much that they were happy to pick up Nuland’s fallen banner of the New Cold War with Russia. As part of a dubious scheme to drive Trump from office, Democrats and liberals hyped evidence-free allegations that Russia had colluded with Trump’s team to rig the U.S. election.

    New York Times columnist Thomas L. Friedman spoke for many of this group when he compared Russia’s alleged “meddling” to Japan’s bombing of Pearl Harbor and Al Qaeda’s 9/11 terror attacks.

    On MSNBC’s “Morning Joe” show, Friedman demanded that the Russia hacking allegations be treated as a casus belli: “That was a 9/11 scale event. They attacked the core of our democracy. That was a Pearl Harbor scale event.” Both Pearl Harbor and 9/11 led to wars.

    So, with many liberals blinded by their hatred of Trump, the path was open for neocons to reassert themselves.

    Baiting Republicans

    Robert Kagan took to the high-profile op-ed page of The Washington Post to bait key Republicans, such as Rep. Devin Nunes, chairman of the House Intelligence Committee who was pictured above the Post article and its headline, “Running interference for Russia.”

    Gen. David Petraeus posing before the U.S. Capitol with Kimberly Kagan, founder and president of the Institute for the Study of War. (Photo credit: ISW’s 2011 Annual Report)

    Kagan wrote: “It would have been impossible to imagine a year ago that the Republican Party’s leaders would be effectively serving as enablers of Russian interference in this country’s political system. Yet, astonishingly, that is the role the Republican Party is playing.”

    Kagan then reprised Official Washington’s groupthink that accepted without skepticism the claims from President Obama’s outgoing intelligence chiefs that Russia had “hacked” Democratic emails and released them via WikiLeaks to embarrass the Clinton campaign.

    Though Obama’s intelligence officials offered no verifiable evidence to support the claims – and WikiLeaks denied getting the two batches of emails from the Russians – the allegations were widely accepted across Official Washington as grounds for discrediting Trump and possibly seeking his removal from office.

    Ignoring the political conflict of interest for Obama’s appointees, Kagan judged that “given the significance of this particular finding [about Russian meddling], the evidence must be compelling” and justified “a serious, wide-ranging and open investigation.”

    But Kagan also must have recognized the potential for the neocons to claw their way back to power behind the smokescreen of a New Cold War with Russia.

    He declared: “The most important question concerns Russia’s ability to manipulate U.S. elections. That is not a political issue. It is a national security issue. If the Russian government did interfere in the United States’ electoral processes last year, then it has the capacity to do so in every election going forward. This is a powerful and dangerous weapon, more than warships or tanks or bombers.

    “Neither Russia nor any potential adversary has the power to damage the U.S. political system with weapons of war. But by creating doubts about the validity, integrity and reliability of U.S. elections, it can shake that system to its foundations.”

    A Different Reality

    As alarmist as Kagan’s op-ed was, the reality was far different. Even if the Russians did hack the Democratic emails and somehow slipped the information to WikiLeaks – an unsubstantiated and disputed contention – those two rounds of email disclosures were not that significant to the election’s outcome.

    Former Secretary of State Hillary Clinton and Sen. Bernie Sanders. (NBC photo)

    Hillary Clinton blamed her surprise defeat on FBI Director James Comey briefly reopening the investigation into her use of a private email server while serving as Secretary of State.

    Further, by all accounts, the WikiLeaks-released emails were real and revealed wrongdoing by leading Democrats, such as the Democratic National Committee’s tilting of the primaries against Sen. Bernie Sanders and in favor of Clinton. The emails of Clinton campaign chairman John Podesta disclosed the contents of Clinton’s paid speeches to Wall Street, which she was trying to hide from voters, as well as some pay-to-play features of the Clinton Foundation.

    In other words, the WikiLeaks’ releases helped inform American voters about abuses to the U.S. democratic process. The emails were not “disinformation” or “fake news.” They were real news.

    A similar disclosure occurred both before the election and this week when someone leaked details about Trump’s tax returns, which are protected by law. However, except for the Trump camp, almost no one thought that this illegal act of releasing a citizen’s tax returns was somehow a threat to American democracy.

    The general feeling was that Americans have a right to know such details about someone seeking the White House. I agree, but doesn’t it equally follow that we had a right to know about the DNC abusing its power to grease the skids for Clinton’s nomination, about the contents of Clinton’s speeches to Wall Street bankers, and about foreign governments seeking pay-to-play influence by contributing to the Clinton Foundation?

    Yet, because Obama’s political appointees in the U.S. intelligence community “assess” that Russia was the source of the WikiLeaks emails, the assault on U.S. democracy is a reason for World War III.

    More Loose Talk

    But Kagan was not satisfied with unsubstantiated accusations regarding Russia undermining U.S. democracy. He asserted as “fact” – although again without presenting evidence – that Russia is “interfering in the coming elections in France and Germany, and it has already interfered in Italy’s recent referendum and in numerous other elections across Europe. Russia is deploying this weapon against as many democracies as it can to sap public confidence in democratic institutions.”

    U.S. Secretary of State John Kerry, flanked by Assistant Secretary of State for European and Eurasian Affairs Victoria “Toria” Nuland, addresses Russian President Vladimir Putin in a meeting at the Kremlin in Moscow, Russia, on July 14, 2016. [State Department Photo]

    There’s been a lot of handwringing in Official Washington and across the Mainstream Media about the “post-truth” era, but these supposed avatars for truth are as guilty as anyone, acting as if constantly repeating a fact-free claim is the same as proving it.

    But it’s clear what Kagan and other neocons have in mind, an escalation of hostilities with Russia and a substantial increase in spending on U.S. military hardware and on Western propaganda to “counter” what is deemed “Russian propaganda.”

    Kagan recognizes that he already has many key Democrats and liberals on his side. So he is taking aim at Republicans to force them to join in the full-throated Russia-bashing, writing:

    “But it is the Republicans who are covering up. The party’s current leader, the president, questions the intelligence community’s findings, motives and integrity. Republican leaders in Congress have opposed the creation of any special investigating committee, either inside or outside Congress. They have insisted that inquiries be conducted by the two intelligence committees.

     

    “Yet the Republican chairman of the committee in the House has indicated that he sees no great urgency to the investigation and has even questioned the seriousness and validity of the accusations. The Republican chairman of the committee in the Senate has approached the task grudgingly.

     

    “The result is that the investigations seem destined to move slowly, produce little information and provide even less to the public. It is hard not to conclude that this is precisely the intent of the Republican Party’s leadership, both in the White House and Congress. …

     

    “When Republicans stand in the way of thorough, open and immediate investigations, they become Russia’s accomplices after the fact.”

    Lying with the Neocons

    Many Democrats and liberals may find it encouraging that a leading neocon who helped pave the road to war in Iraq is now by their side in running down Republicans for not enthusiastically joining the latest Russian witch hunt. But they also might pause to ask themselves how they let their hatred of Trump get them into an alliance with the neocons.

    Russian President Vladimir Putin, following his address to the UN General Assembly on Sept. 28, 2015. (UN Photo)

    On Wednesday in The Wall Street Journal, Robert Kagan’s brother Frederick and his wife Kimberly dropped the other shoe, laying out the neocons’ long-held dream of a full-scale U.S. invasion of Syria, a project that was put on hold in 2004 because of U.S. military reversals in Iraq.

    But the neocons have long lusted for “regime change” in Syria and were not satisfied with Obama’s arming of anti-government rebels and the limited infiltration of U.S. Special Forces into northern Syria to assist in the retaking of the Islamic State’s “capital” of Raqqa.

    In the Journal op-ed, Frederick and Kimberly Kagan call for opening a new military front in southeastern Syria:

    “American military forces will be necessary. But the U.S. can recruit new Sunni Arab partners by fighting alongside them in their land. The goal in the beginning must be against ISIS because it controls the last areas in Syria where the U.S. can reasonably hope to find Sunni allies not yet under the influence of al Qaeda. But the aim after evicting ISIS must be to raise a Sunni Arab army that can ultimately defeat al Qaeda and help negotiate a settlement of the war.

     

    “The U.S. will have to pressure the Assad regime, Iran and Russia to end the conflict on terms that the Sunni Arabs will accept. That will be easier to do with the independence and leverage of a secure base inside Syria. … President Trump should break through the flawed logic and poor planning that he inherited from his predecessor. He can transform this struggle, but only by transforming America’s approach to it.”

    A New Scheme on Syria

    In other words, the neocons are back to their clever word games and their strategic maneuverings to entice the U.S. military into a “regime change” project in Syria.

    The neocons thought they had almost pulled off that goal by pinning a mysterious sarin gas attack outside Damascus on Aug. 21, 2013, on the Syrian government and mousetrapping Obama into launching a major U.S. air assault on the Syrian military.

    But Russian President Vladimir Putin stepped in to arrange for Syrian President Bashar al-Assad to surrender all his chemical weapons even as Assad continued to deny any role in the sarin attack.

    Putin’s interference in thwarting the neocons’ dream of a Syrian “regime change” war moved Putin to the top of their enemies’ list. Soon key neocons, such as National Endowment for Democracy president Carl Gershman, were taking aim at Ukraine, which Gershman deemed “the biggest prize” and a steppingstone toward eventually ousting Putin in Moscow.

    It fell to Assistant Secretary Victoria “Toria” Nuland to oversee the “regime change” in Ukraine. She was caught on an unsecured phone line in late January or early February 2014 discussing with U.S. Ambassador to Ukraine Geoffrey Pyatt how “to glue” or “to midwife” a change in Ukraine’s elected government of President Viktor Yanukovych.

    Several weeks later, neo-Nazi and ultranationalist street fighters spearheaded a violent assault on government buildings forcing Yanukovych and other officials to flee for their lives, with the U.S. government quickly hailing the coup regime as “legitimate.”

    But the Ukraine putsch led to the secession of Crimea and a bloody civil war in eastern Ukraine with ethnic Russians, events that the State Department and the mainstream Western media deemed “Russian aggression” or a “Russian invasion.”

    So, by the last years of the Obama administration, the stage was set for the neocons and the Family Kagan to lead the next stage of the strategy of cornering Russia and instituting a “regime change” in Syria.

    All that was needed was for Hillary Clinton to be elected president. But these best-laid plans surprisingly went astray. Despite his overall unfitness for the presidency, Trump defeated Clinton, a bitter disappointment for the neocons and their liberal interventionist sidekicks.

    Yet, the so-called “#Resistance” to Trump’s presidency and President Obama’s unprecedented use of his intelligence agencies to paint Trump as a Russian “Manchurian candidate” gave new hope to the neocons and their agenda.

    It has taken them a few months to reorganize and regroup but they now see hope in pressuring Trump so hard regarding Russia that he will have little choice but to buy into their belligerent schemes.

    As often is the case, the Family Kagan has charted the course of action – batter Republicans into joining the all-out Russia-bashing and then persuade a softened Trump to launch a full-scale invasion of Syria. In this endeavor, the Kagans have Democrats and liberals as the foot soldiers.

  • Paul Craig Roberts Exposes "The Conspiracy Against President Trump"

    Authored by Paul Craig Roberts,

    Listening yesterday to the broadcast of testimony by FBI Director Comey and National Security Agency Director Admiral Michael Rogers before the House Intelligence Committee (an oxymoron) made it clear that the Democrats, Comey, and Rogers intend conflict with Russia.

    The Republicans, for the most part, were interested to know how security leaks targeted at Trump Republicans came from meetings at which only the CIA Director, NSA Director, and FBI director were present. Of course, they did not get an answer, which shows how powerless congressional oversight committees are. Comey repeatedly said that he could not tell the committee anything, because it would confirm that a press leak was true. But, he said, speaking generally and of no specific leak, most leaks come from “someone who heard something” and passes it on to the media, which also explains the inaccuracy of some leaks. In other words, don’t blame us.

    The Democrats were out in force to demonize Russia, Putin, and everyone, especially Trump Republicans, who speaks to a Russian even if the person is still a private citizen, as was Gen. Flynn when he recommended to the Russian ambassador that Russia not respond in kind to President Obama’s expulsion of Russian diplomats over Christmas.

    The Democrats bestowed yet another demonic title on Putin. In addition to being “the new Hitler,” a “thug,” and a “Mafia don,” today Putin became a “tarantula in the center of the spy web.”

    The Democrats’ position was that Flynn, by discouraging a Russian tit for tat, had interfered with the Obama regime’s policy of worsening relations between the US and Russia. Some Democrats saw this as treason. Others saw it as proof that Flynn and Trump are in Putin’s pocket, and still others see it as even worse.

    The Democrats were also very concerned about lobbyists, if they be Republican, working for Russian interests, including Tillerson, the Secretary of State. The fact that every country employs lobbyists and that the lobbyists don’t always register as foreign agents, such as Israel’s lobbyists, or if news reports at the time were correct, neocon Richard Perle who represented Turkey in Washington.

    Democrats were also after Gen. Flynn for saying that he had not received money from the Russian government. Flynn received a fee for attending the 10th Anniversary celebration of RT in Moscow. Is RT, a news organization, the Russian government? Its budget is supported by the Russian government, but how does this differ from the US government’s support of the budgets of National Public Radio, Radio Free Europe/Radio Liberty, Voice of America? Does this mean that everyone who gives an interview to NPR, Radio Liberty, and VOA is an American agent in the pocket of the US president? If you attend a function of one of these organizations, does it make you an “American agent/dupe”? Will there be a list of these people?

    What the Democrats tried to do yesterday was to criminalize everyone who works for better relations between the US and Russia. To be for peace between the nuclear powers is to be a Russian agent and to be put on a list. The Democrats insisted that Russia was an enemy out to get us, and the Democrats had no difficulty getting Comey and Rogers, both Obama appointees, to agree.

    Comey and Rogers said that Russia was the main threat to the US, was working against our interests, and intends to harm us. Harming us includes opposing US hegemony and unilateralism. In other words, if the Russian government acts in the interests of Russia, the Russian government is harming the US. From the testimony it clearly emerged that any kind of opposition to anything Washington does is against American interests.

    Both Comey and Rogers declared, falsely, that Russia had invaded Ukraine and seized Crimea by force. If Comey and Rogers are so poorly informed that they believe this, they are unfit for office. Crimea has been a part of Russia for 300 years. The population is almost entirely Russian. When the Soviet Union collapsed and Washington broke it apart, the Ukraine became independent for the first time in history. Crimea, which had been transferred by Khrushchev in 1954 from the Russian Soviet Socialist Republic to the Ukrainian Soviet Socialist Republic, was included in the transfer on the condition that Russia had a long term lease on the naval base in Crimea.

    When Washington’s coup overthrew the democratically elected government in Ukraine, the Russian populations in Crimea, and in the new republics of Luhansk and Donetsk, were attacked and threatened by the neo-nazi elements in eastern Ukraine that had fought for Hitler against the Soviet Union. The populations of these areas voted overwhelmingly to reunite with Russia, from whence they had come. The votes were fair and open. As Crimea is the Russian Navy’s Black Sea base, Crimea was already occupied by Russian forces. For Comey and Rogers to call this an “invasion” displays either ignorance or a lack of integrity.

    Indeed, the lack of integrity of the FBI, NSA, CIA, and Obama regime is evidenced by the sustained campaign of lies, distortions, and targeted “news leaks,” that is, stories planted on the presstitutes by the intelligence services about Russian interference in the presidential election. It is all about protecting the massive military/security budget and powers. Trump threatened both the budget and the power when he declared that his policy would be to normalize relations with Russia. If relations are normalized, the carefully orchestrated “Russian threat” disappears. The intelligence services are not willing for this to happen. The US intelligence services prefer the risk of nuclear Armageddon to a budget cut.

    The Democrats are probably not sufficiently intelligent to understand that they are fanning the flames of war between nuclear powers. The Democrats are desperate to find someone on whom to pin their loss of the election. Moreover, by pinning it on a conspiracy between Trump and Putin, they hope to remove Trump from office. Although Pence, who is a Russophobe, is acceptable to the military/security complex, the Democrats have hopes of clearing out Pence as well, as his election resulted from the alleged conspiracy, and reinstalling themselves in the White House.

    Americans need to understand that the political competition between the Democrats and Republicans is over which party gets to collect the money for being the whore for the One Percent. Traditionally, the party in the White House gets most of the money, so that is where both parties want to be.

    Michael Morell, a supporter of Hillary Clinton and President Obama’s last CIA director in an acting capacity, who was slated to become CIA director under Hillary, said, “On the question of the Trump campaign conspiring with the Russians, there is smoke, but there is no fire, at all. There’s no little campfire, there’s no little candle, there’s no spark. And there’s a lot of people looking for it.” 

    Morell does believe that it was the Russians who hacked Hillary’s incriminating emails but not in collusion with Trump, although the evidence is that they were a leak from inside the Democratic National Committee by disaffected supporters of Bernie Sanders.

    Obama’s Director of National Intelligence James Clapper said on Meet the Press on March 5 that he had seen no evidence of a Putin-Trump conspiracy when he left office on January 20.

    Listening to Comey and Rogers yesterday, if they are not working against President Trump, what would classify as working against Trump? Trump supporters ask why Trump doesn’t fire these two men who are working to block a reduction in the dangerous tensions between Washington and Russia. Are the Democrats, Comey, Rogers, the CIA and their media whores so stupid that they don’t understand what it means when the President of Russia says, “the Americans have destroyed our trust in them?”

    Trump doesn’t fire Comey and Rogers, because he cannot fire them. If he fires them, the Democrats and presstitutes will explain the firings as proof that Trump is a Russian agent and is covering up his treason by removing those investigating it.

    Trump is trying to use Twitter to respond to the orchestrated media assault against him and to achieve some organization among his supporters, the working class that elected him. However, Trump cannot even count on the Republican Party. Most Republicans are also dependent on political contributions from the military/security complex, and Republicans know that the intelligence agencies have all the dirt on them. To fight for Trump is to expose themselves.

    It is undeniable that the CIA controls the media, both in Europe and in the US. Udo Ulfkotte’s book, Gekauftge Journalisten, exposed the CIA’s hold on European journalists when it was published in Germany in 2014. An English language edition, Journalists for Hire: How the CIA Buys the News, is due out in May. In the meantime Joel Whitney’s book, Finks: How the C.I.A. Tricked the World’s Best Writers, suffices to establish that America’s most respected journalists drank the CIA’s Kool-Aid “and thought they were saving freedom” by serving as propagandists. http://www.truthdig.com/avbooth/item/joel_whitney_cia_propaganda_cold_war_scheer_intelligence_20170317

    People in the West need to understand that if the news they receive bears on the interests of the US military/security complex, the news is scripted by the CIA. The CIA serves its interests, not the interests of the American people or the interests of peace.

  • Ivanka Trump Gets West Wing Office, Access To 'Classified Information'

    Despite holding no official title, President Trump's 35-year-old daughter Ivanka is reportedly getting an office (and access to classified information and a government-issued phone) in the White House West Wing, stepping up her highly visible role in helping advise her father.

    Reuters reports that a White House official on Monday confirmed reports that Trump's daughter would be getting her own West Wing space, as well as access to classified information and a government-issued phone.

    She is not expected to have an official title and will not be paid a salary.

     

    Ivanka Trump will be joining her husband, Jared Kushner, who is a chief adviser to the president and is a regular presence at his father-in-law's side.

     

    When Kushner's job was announced earlier this year, aides said Ivanka would not take on a role in her father's White House but would focus on settling her family in Washington.

     

    Since then, she has been a frequent behind-the-scenes adviser. Last Friday, she sat next to visiting German Chancellor Angela Merkel when Merkel visited the White House.

    We are sure this 'access to classified information' will become a brief media narrative (all eyes still on Gorsuch and Comey) as Democrats raise 'conflict of interest' concerns, even though Ivanka has divested her 'Ivanka Trump' brand into a trust.

  • South Korea Says North Korea Conducted Unsuccessful Missile Launches, US Officials Aware

    Just hours after US military officials warned of a North Korea missile launch, Japanese media is reporting that Japanese officials said North Korea may have launched four missiles from the vicinity of Eastern Motoyama. Kyodo additionally reports that the missile launch may have failed, citing unnamed government officials.

    • *SUGA RESPONDS TO REPORTS OF NORTH KOREA LAUNCHING MISSILES
    • *SUGA: JAPAN HASN’T CONFIRMED MISSILES FLYING
    • *N. KOREA MISSILE LAUNCH MAY HAVE FAILED: KYODO
    • *KYODO SAYS DETAILS INCLUDING TYPE OF N. KOREA MISSILE UNKNOWN

    Yonhap news is now reporting that:

    • *S. KOREA SAYS N. KOREA MISSILE DIDN'T LAUNCH PROPERLY: YONHAP
    • *YONHAP NEWS CITES UNIDENTIFIED S. KOREA MILITARY OFFICIAL
    • *S. KOREA, U.S. AWARE OF N. KOREA-RELATED SITUATION: YONHAP

    North Korea test-fired a salvo of missiles Wednesday, but it ended in failure, South Korea's military said. "South Korea and the United States are aware of the related issue," the defense ministry said in a one-sentence statement.

    Bloomberg's Michael McDonough provides this excellent timeline of North Korean events and the South Korean Won…

    *  *  *

    As we detailed earlier, on the same day as Kim Jong Un threatens the US with "first-strike' nuclear ICBM and unveils propaganda showing the destruction of American forces, AP reports U.S. military officials expect another North Korean missile launch in the next several days.

    Earlier today a Pyongyang envoy stated that North Korea will pursue "acceleration" of its nuclear and missile programs. This includes developing a "pre-emptive first strike capability" and an inter-continental ballistic missile, according to Choe Myong Nam, deputy ambassador at the DPRK (North Korean) mission to the United Nations in Geneva.

    The latest development follows a previous report also from Reuters, in which it said the Trump administration is considering sweeping sanctions as part of a broad review of measures to counter North Korea's nuclear and missile threat. "I think this is stemming from the visit by the Secretary of State (Rex Tillerson) to Japan, South Korea and China…We of course are not afraid of any act like that," Choe told Reuters.

    "Even prohibition of the international transactions system, the global financial system, this kind of thing is part of their system that will not frighten us or make any difference." He called existing sanctions "heinous and inhumane".

    Choe said his country wants a forum set up to examine the "legality and legitimacy of the sanctions regime" and denounced joint annual military exercises currently being carried out by the United States and South Korea on the divided peninsula and criticized remarks by Tillerson during his talks with regional allies last week.

    "All he was talking about is for the United States to take military actions on DPRK (the Democratic People's Republic of Korea," Choe said.

    Additionally, North Korea rejects claims by Washington and Seoul that the military drills taking place at this moment are defensive. They involve strategic nuclear bombers and a nuclear submarine Columbus that recently entered South Korean ports, he said.

    And then, just days after Kim threatened to reduce the US “to ashes” as tensions with North Korea continue to increase, which in turn followed a warning by Tillerson that the US is preparing for a "first strike" against the irrational dictator, while US special forces conduct drills in South Korea to "eliminate" the country's ruler, the Supreme Leader released his latest materpiece of propaganda, showing the USS Carl Vinson nuclear-powered aircraft carrier up in flames.

    And now, AP reports that the U.S. military expects another North Korean missile launch in the next several days, American defense officials said Tuesday.

    The officials said the U.S. has increased its surveillance over the isolated, communist country and has seen a North Korean missile launcher moving around, as well as construction of VIP seating in the eastern coastal city Wonsan.

    The officials, who weren't authorized to discuss the matter publicly and spoke on condition of anonymity, said the new surveillance includes satellites, drones and other aircraft.

    The U.S. officials on Tuesday said it's unclear what type of missile launch may be coming. North Korea previously has conducted tests in Wonsan of its medium-range ballistic Musudan missile.

    White House press secretary Sean Spicer on Tuesday described the North Korean threat as "grave and escalating," and a National Security Council official told a nuclear conference that the administration is conducting a high-priority review of North Korea policy.

    Christopher Ford, senior director for weapons of mass destruction and nonproliferation on the NSC staff, said reviewers are considering a "full spectrum of possibilities."

    "There's this enormously broad continuum, and we are looking at that entire conceptual space," Ford told the Carnegie International Nuclear Policy Conference. He gave no concrete examples, but in an attempt to illustrate his point that the choices run the gamut, he said they range from "warm hamburger" to "war hammers."

  • The True Legacy Of David Rockefeller

    Via MintPressNews.com,

    While often remembered for his philanthropy, the last surviving grandson of America’s first billionaire died today, leaving behind a dark legacy indicative of how American nobility often shape policy from behind the scenes.

    No one person encapsulates the enduring legacy of the “robber barons” of the Industrial Age quite like David Rockefeller. Rockefeller, who died this week at the age of 101, was the last surviving grandson of John D. Rockefeller, the oil tycoon who became America’s first billionaire and the patriarch of what would become one of the most powerful and wealthiest families in American history. David Rockefeller, an undeniable product of American nobility, lived his entire life in the echelons of U.S. society, becoming symbolic of the elite who often direct public policy to a much greater extent than many realize, albeit often from the shadows.

    Rockefeller made it clear that he preferred to operate out of public view despite his great influence in American – and international – politics. Due to his birthright, Rockefeller served as an advisor to every president since Eisenhower, but when offered powerful positions such as Federal Reserve chairman and Secretary of the Treasury – he declined, preferring “a private role.”

    As evidenced by the numerous obituaries bemoaning the loss of the last of the Rockefeller’s grandsons, he was largely successful in hiding his most significant wrongdoings from public view, as evidenced by his characterization as a generous philanthropist and influential banker.

    But as is often the case, Rockefeller’s true legacy is much more mired in controversy than major publications seem willing to admit. In addition to having the ear of every U.S. president for the better part of the last 70 or so years, Rockefeller – once again operating “behind the scenes” – was instrumental in shaping the more cringe-worthy aspects of U.S. policy during that time, as well as being a major force in establishing banking policies that led to debt crises in the developing world.

    Rockefeller – as the head of Chase Manhattan Bank from 1969 to 1981 – worked with government and multinational corporations throughout the world to create a “global order” unequivocally dominated by the 1 percent, of which his family was a part. As the New York Times noted back in the 1970s, Rockefeller became embroiled in controversy when his constant trips overseas caused the bank to become less profitable, as he prioritized the bank’s influence on foreign politics over its actual business dealings.

    During his time as Chase CEO, Rockefeller helped lay the foundation for repressive, racist and fascist regimes around the world, as well as architecture for global inequality. In addition, Rockefeller helped to bring the debt crisis of the 1980s into existence, in part by direct action through Chase Bank and also indirectly through his former employee-turned-Federal Reserve chairman Paul Volcker. Two years before the debt crisis erupted, Rockefeller, Volcker and other top bankers met at the International Monetary Conference in 1980s to argue for the establishment of a “safety net” for major banks – like Chase – that were embroiled in bad loans given largely to countries in the developing world.

    David Rockefeller, center, then chairman of the Chase Manhattan Bank International Advisory Committee, receives the 1983 International Leadership Award presented by Dr. Henry A. Kissinger, left, and Ralph A. Pfeiffer, Jr. on, Dec. 9, 1983. (AP/Ron Frehm)

    After the crisis brought financial ruin to Latin America and other developing areas throughout the world, Rockefeller – along with other bankers – created austerity programs to “solve” the debt crisis during subsequent IMC meetings, provoking inequality that still persists to this day. However, thanks to the “safety net” conveniently established years prior, Chase avoided the economic consequences for its criminal actions.

    In addition, Rockefeller supported the bloody and ruthless dictatorships of the Shah of Iran and Augusto Pinochet of Chile while also supporting Israeli apartheid. Rockefeller then went on to found the influential Trilateral Commission while also serving as a major force on the Council on Foreign Relations that he, along with his close friend Henry Kissinger, would come to dominate.

    Both of these organizations have come under fire for using their powerful influence to bring about a “one-world government” ruled by a powerful, ultra-wealthy elite – an accusation to which David Rockefeller confirmed as true in his autobiography. Far from the generous philanthropist he is made to be, David Rockefeller deserves to be remembered for his true legacy – one of elitism, fascism and economic enslavement.

  • Perfect Example Of Why Job Losses From Minimum-Wage-Hikes Are Being Underestimated, 'Bigly'

    Over the past several months, we’ve highlighted a number of economic studies analyzing the potential negative impact, in terms of job losses, that may be expected to result from the state-mandated minimum wage hikes that are currently being implemented around the country.

    One such study came from the American Action Forum (AAF) and estimated that 2.6 million jobs will be lost around the country over the next several years as states phase-in minimum wage hikes that have already been passed (see “State Minimum Wage Hikes Already Passed Into Law Expected To Cost 2.6 Million Jobs, New Study Finds“).  Here were a few of the key takeaways:

    • In isolation, the minimum wage increases in 2017 will cost 383,000 jobs;
    • The entire minimum wage increases currently phasing-in will cost over 2.6 million jobs; and
    • Each job lost only leads to an extra $6,900 in total wage earnings across all workers.

    After running a lot of really complicated math using complex equations that most of us stupid people just wouldn’t understand, these studies ultimately come down to a simple economic premise: elasticity of demand (a.k.a. ‘the higher shit is priced the less people will buy of it’ rule).  In fact, the AAF analysis even summarized their study by saying that each 10% increase in wages results in an proximate 0.3% – 0.5% decline in net job growth…a rule which they used to conclude the following:

    While proposals to raise the minimum wage are well intended, it is important to consider the negative labor market consequences. Meer & West (2015) find that raising the minimum wage reduces job creation. Specifically, they find that a 10 percent increase in the real minimum wage is associated with a 0.3 to 0.5 percentage-point decline in the net job growth rate. As a result, three years later employment becomes 0.7 percent lower than it would have been absent the minimum wage increase.

     

    While the Meer & West (2015) findings may not seem very problematic, when taking into account the magnitude of the minimum wage increases and the number of states implementing new laws, the negative labor market consequences add up. Let’s first examine the minimum wage hikes of 2017 in isolation, without considering previous or future minimum wage increases under the new state laws.

    Minimum Wage

     

    The problem is that these studies consistently underestimate the number of jobs that will be impacted by minimum wage hikes.  For the most part, the economists simply tally up the number of jobs in a given market that currently fall beneath the new minimum wage threshold and then assume that a certain percentage of them will disappear.

    In reality, minimum wage hikes trigger pay increases across the pay scale, not just for the employees earning minimum wage, because most people make employment decisions based on relative wages and not absolute wages

    Consider, for example, the folks working at a California McDonalds where the minimum wage was $10 per hour in 2016 but is set to increase to $15 over the coming years.  Lets also assume that most of the customer service staff earns the minimum pay rate while managers earn $15.  Under the methodology above, the manager would never be counted as an ‘at-risk’ position because his job would never technically fall below the new minimum wage.  But, in reality, there’s no conceivable world where the manager will simply agree to keep his $15 per hour pay rate once all of his workers have received a 50% pay increase and now make the same as him…instead, he’ll run some basic math and conclude he needs to be making $22.50 per hour to have the same ‘relative’ compensation he had before or he’ll just go work as an order taker with less responsibility. 

    And while these are simple concepts to most of us, even if we don’t understand the complicated econometrics equations, as the Associated Press points out today they’re completely foreign concepts to our elected officials who ignorantly passed minimum wage bills across the country without understanding the real economic consequences.  As a perfect example, apparently New York Governor Andrew Cuomo was shocked to learn that home healthcare experts would rather take his new $15 per hour minimum wage job flipping burgers with no stress than to earn the same amount of money for a job that requires a ton of expensive education and stressful, long hours….who knew?

    It’s a national problem advocates say could get worse in New York because of a phased-in, $15-an-hour minimum wage that will be statewide by 2021, pushing notoriously poorly paid health aides into other jobs, in retail or fast food, that don’t involve hours of training and the pressure of keeping someone else alive.

     

    “These should not be low-wage jobs,” said Bruce Darling, executive director at the Center for Disability Rights. “We’re paying someone who gives you a burger the same as the person who operates your relative’s ventilator or feeding tubes.”

     

    There are 2.2 million home health aides and personal care aides in the U.S., with another 630,000 needed by 2024 as the Baby Boomer generation ages, according to the nonprofit research and consulting group PHI. New York state employs about 326,000 home health workers but is predicted to need another 125,000 by 2024.

     

    For now, home health aides in New York state earn an average of about $11 an hour, though wages are lower in upstate regions. Advocates say the system needs an overhaul that focuses on higher pay, worker retention and finding methods of compensation beyond what is provided through Medicaid.

    Here’s an idea…how about we just let markets set wage rates?

  • Noted Putin Critic Warns Of Confrontation Between Trump And Russia, Not Collaboration

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    One thing we should have learned over the past year or so is you can take any narrative being pushed by the corporate media and Democrats, and assume that the exact opposite is true. The current Trump-Russia hysteria could very well turn out to be the latest and most embarrassing example of this phenomenon. In fact, well known Putin-critic, Masha Gessen, recently warned in an interview with Politico that her biggest fear is a Trump-Putin conflict, not some imagined alliance.

    Below I provide the excerpts from this lengthy interview which I believe are relevant to the topic.

    From Politico:

    Glasser: I want to talk a little bit about where we are right now. And then back up to why it is, in your life, you’ve figured out this expecting the unimaginable. But recently, you know, American politics has been consumed by Russia. Russia, Russia, Russia, Russia. And you wrote something that a lot of people were surprised by the other day, although I was not. And you said, “Beware the conspiracy trap.”

     

    And that, in fact, the Russia scandal that now threatens to engulf President Trump’s very new presidency, you wrote, “In effect, could be actually helping President Trump and amount to a sort of a colossal distraction for us.” What did you mean by that?

     

    Gessen: Well, a couple things. One is that, if you look at, you know, what we actually know about the Russia story, which changes every day, but what—at this point, what we actually know suggests that the likelihood that there’s going to be a causal link between the Russian interference in the American election and the outcome of the election. The likelihood that was a causal link, and that that causal link can be shown, is basically vanishingly small, right?

     

    So—and I think that part of the reason—there are basically two reasons that a lot of journalists and a lot of activists have been focusing on Russia is because it serves as a crutch for the imagination. And again, I’m coming back to this topic of imagination, which obsesses me.

     

    So one way in which it serves as a crutch for the imagination is that it allows us to imagine that, maybe, Trump will be so sullied by this Russia scandal, by this connection, even if he can’t prove a cause—causal link, just that the darkness of the scandal will be thick enough of a cloud that he will eventually be impeached by a Republican Congress.

     

    That’s a huge leap. And it also, I think, doesn’t take into account the tools—the rhetorical tools that will have to be used to sully Trump in such a way, right? Which are basically xenophobic and, you know, corrosive to the public sphere. And the other way in which it serves as a crutch for the imagination is it also serves to explain how Trump could have happened to us, right? The Russians did it.

     

    Glasser: That’s exactly right; if it’s an external thing. And you wrote that very, very early on. Actually, before this latest round, that the real threat to Trump would be to misunderstand where this comes from. And if it’s not Americans who voted for him, but somehow, it’s a wily, dark conspiracy theory. That leads you down a whole different set of responses to Trump.

     

    Gessen: Right. Which—

     

    Glasser: I think that’s your point.

     

    Gessen: That is my point. And also that it’s destructive to politics. Politics is what happens out in the open. And there’s lots of politics happening, right? There’s this endless barrage of frightening bills being filed at this point. There are the Cabinet appointments. There’s the, you know, dismantling of the federal government as we have known it for generations.

    All of that is going on out in the open. And we only have so much bandwidth. If we’re not talking about what’s going on out in the open, if we’re talking about conspiracy instead, then we are, by doing that, destroying the politics that we should be preserving, right? I mean, how do we emerge out the other end, when Trump ends, and Trump will eventually end. Everything ends, right?

     

    If we’ve engaged in conspiracy theorizing this whole time, instead of engaging in politics—and only by engaging in politics can we actually preserve the political space…

     

    Gessen: I’m worried about Russia. I’m—this is—I mean, we’re already out of the honeymoon phase, and it’s been less than two months. And I think it’s—I mean, the danger of having these two unhinged power-hungry men at their—respective nuclear buttons cannot be overestimated. But—

     

    Glasser: So you would see them as potential enemies as much as potential friends? That this scenario—

     

    Gessen: Oh, absolutely.

     

    Glasser: —we should worry about is Trump versus Putin, not just Trump and Putin uniting?

     

    Gessen: Right. I’m actually worried about a collision with them.

    She’s exactly right. I completely agree that the disaster scenario with Putin and Trump is if and when they actually clash. Once that happens, the corporate media and Democrats will pretend they had nothing to do with it, as they always do. As Mark Ames noted on Twitter:

    //platform.twitter.com/widgets.js

    Moving on, I want to once again turn to Robert Parry of Consortium News to highlight just how ridiculous the whole “Putin bought off Trump aides” conspiracy is. From yesterday’s piece, The Missing Logic of Russia-gate:

    Democrats circulated a report showing that retired Lt. Gen. Michael Flynn, who served briefly as President Donald Trump’s national security adviser, had received payments from several Russia-related entities, totaling nearly $68,000.

     

    The largest payment of $45,386 came for a speech and an appearance in Moscow in 2015 at the tenth anniversary dinner for RT, the international Russian TV network, with Flynn netting $33,750 after his speakers’ bureau took its cut. Democrats treated this revelation as important evidence about Russia buying influence in the Trump campaign and White House. But the actual evidence suggests something quite different.

     

    Not only was the sum a relative trifle for a former senior U.S. government official compared to, say, the fees collected by Bill and Hillary Clinton, who often pulled in six to ten times more, especially for speeches to foreign audiences. (Former President Clinton received $500,000 for a Moscow speech from a Russian investment bank with ties to the Kremlin, The New York Times reported in 2015,)

     

    Yet, besides Flynn’s relatively modest speaking fee, The Washington Post reported that RT negotiated Flynn’s rate downward.

     

    Deep inside its article on Flynn’s Russia-connected payments, the Post wrote, “RT balked at paying Flynn’s original asking price. ‘Sorry it took us longer to get back to you but the problem is that the speaking fee is a bit too high and exceeds our budget at the moment,’ Alina Mikhaleva, RT’s head of marketing, wrote a Flynn associate about a month before the event.”

     

    So, if you accept the Democrats’ narrative that Russian President Vladimir Putin is engaged in an all-out splurge to induce influential Americans to betray their country, how do you explain that his supposed flunkies at RT are quibbling with Flynn over a relatively modest speaking fee?

    Of course, you’ll never hear any of this emphasized in the corporate media, they’re too busy pushing for a conflict between the U.S. and Russia. A conflict that once it happens, they will vehemently deny playing any role in propagating.

  • PBOC Injects Hundreds Of Billions Into Chinese Banks After Sudden Defaults In Interbank Payments

    As is customary virtually every time the Chinese central bank commences some form of tightening, overnight the PBOC injected “hundreds of billions of yuan into the financial system after some smaller lenders failed to repay borrowings in the interbank market”, according to people familiar with the matter.

    According to a brief note by Bloomberg, Tuesday’s injections followed missed interbank payments on Monday, anonymous sources said; the matter is not made public over concerns of bank deposit flight risk. The institutions that missed payments included rural commercial banks. One of Bloomberg’s trader sources said a borrower failed to repay an overnight repo of less than 50 million yuan ($7.3 million). China’s smaller lenders have been squeezed by a rise in money market rates this week, with the benchmark seven-day repurchase rate jumping to the highest level since April 2015 on Tuesday. As we described last Wednesday, the PBOC for the second time in a month engaged in tightening by hiking the rate on reverse repos as well as various liquidity conduit operations such as the MLS.

     

    While the tightening of liquidity reflects factors including quarter-end regulatory checks and a wall of maturing certificates of deposit, BBVA said the People’s Bank of China may also be sending a message to over-leveraged firms to rein in borrowing.

    “The PBOC wants to warn the smaller lenders not to play the leverage game excessively,” said Xia Le, chief economist at BBVA in Hong Kong. “It’s a tug of war between the central bank and the financial institutions.”

    And while some smaller banks were on the verge of failure, overnight virtually everyone felt the surge in the 7-day repo fixing to the highest since 2014, driven by China’s liquidity squeeze amid policy tightening and continued high leverage  

    As Goldman’s MK Tan explains, China’s 7-day repo fixing interest rate rose to 5.5% on Tuesday, the highest level since late 2014. This followed PBOC’s statement last Thursday signaling a deviation from the previous framework of regarding interbank rates as de facto “policy rates”. Reflecting the prospective quarter-end MPA (macro-prudential assessment) examination and continued tightening bias from the PBOC, interbank rates may remain fairly volatile in the coming days, although most analysts do not expect such elevated rates to be sustained, especially since the PBOC will promptly have to bail out any banks suffering a liquidity squeeze.

    Some more details for those unfamiliar with China’s stealth tightening process.

    Interbank interest rates had been more clearly drifting higher in the past month, especially following the PBOC’s OMO rate increase last Thursday. In particular, the gap between R007 (general repo rate covering all counterparties including funds) and DR007 (covering only banks) has widened again in recent days, suggesting tight liquidity conditions faced by non-bank financial institutions (NBFIs) (Exhibit 1).

    Exhibit 1: Interbank rates spiked as liquidity scramble by NBFIs intensified (as seen in the widened R007-DR007 spread)

    Tuesday’s fixing rate (set at 11:30am based on morning transactions) spiked, although funding conditions in the afternoon seem to have moderated somewhat (fixing is non-weighted average interest rate; see the appendix below for more on the fixing process). The rate surge reflects a combination of:

    • A tightening bias by the PBOC. The central bank has shifted policy stance since autumn last year, but the clearer interbank rate rise in recent days suggests that the hawkish bias has stepped up further.
    • Diminished clarity of the role of interbank rates in the PBOC’s policy framework. Since mid-2015, interbank rates had been kept largely steady, partly reflecting the PBOC’s efforts to build up a policy rate framework centering on interbank rates. The PBOC has also introduced SLF (standing lending facility), which is understood as a tool to keep volatility in interbank funding conditions low. However, in a signal that deviates from these previous efforts, the PBOC last Thursday tried to dissociate interbank rates from “policy rates”, which the PBOC said should mean benchmark bank lending and deposits rates. The comment appeared to open up a bigger scope for the PBOC to allow interbank rates to move higher (with the possible intention to avoid conflict with its official “stable and neutral” policy stance or potential pushback from other policy authorities).
    • The SLF mechanism appears to have not functioned effectively in recent days. There have been occasional breaches of the general 7-day repo rate above the SLF rate (3.35% per PBOC’s official communication, although it was reportedly raised to 3.45% last week). This suggests that SLF has not effectively fulfilled its supposed function of imposing a ceiling to interbank rates. One possible reason is that SLF is accessible only by banks, and much of the spikes of the general 7-day repo rate have been a result of liquidity scramble by NBFIs (which have no SLF access), while banks’ interbank funding cost (as measured by DR007; Exhibit 1) has remained more moderate and still below the SLF rate (note that the 7-day repo fixing rate is partly based on funding cost of NBFIs as well). Nevertheless, the apparent lack of effectiveness of SLF in suppressing interbank rate volatility might have weakened the anchoring of the market’s rate expectations in the near term, and such uncertainty could have compounded the liquidity squeeze.
    • Continued high interbank repo borrowing by funds. The wide gap of R007-DR007 reflects continued stress imposed by NBFIs, likely particularly funds, on the funding market. Indeed, as of end-Feb, interbank repo borrowing by funds remained high at over 30% of the interbank repo borrowing (Exhibit 2) despite the increased pressure on the commercial viability of repo trades (borrowing via interbank repo to finance long-dated bond holdings).
    • Regulatory impact. The PBOC has tightened the prudential requirements (particularly on the growth of banks’ balance sheet) under its MPA examination, which is to be conducted at quarter-end. This has likely further contributed to, and amplified the impact of, a tightening in the interbank market.

    In total, the interbank rate volatility may remain quite high in the coming days, especially in light of the near-term consideration of MPA examination at quarter-end and the PBOC’s apparent deviation from the previous monetary policy framework. Alternatively, today’s plunge in the dollar may have had a secondary purpose of easing Chinese financial conditions, where the ongoing dollar rally has pushed the local financial sector to the brink of illiquid collapse.

    Analysts – Goldman included – expect the PBOC policy stance to remain in tightening mode, but do not expect interbank interest rates to remain at today’s elevated levels in the weeks ahead. Sustained elevated rates could cause significant volatility in financial markets–particularly the bond market–given still-significant repo leverage of funds. More importantly, the recent rise in interbank rates will contribute to a moderation in growth later this year, and bank lending rates might also face upward pressures amid higher market rates and thereby increase corporates’ borrowing cost (Exhibit 3).

    Exhibit 2: Funds’ borrowing still accounts for a large share of the interbank repo market

    Exhibit 3: The ongoing rise in market rates may feed through to banks’ lending rates (and corporates’ funding cost) in the months ahead .

    For now, however, the PBOC may have come up with a deus ex machina again: moments ago the first print of the recently soaring seven-day money rate tumbled 64 bps from a two-year high tp 2.45%, affording banks some time to get their financial matters in order. Of course, none will, which means the next time repo rates soar again, it will be up to the PBOC to bail out the local banking system, all over again.

  • Ally Financial Slashes Guidance As Used Car Prices Suffer "Worst Decline In 20 Years"

    For those of you holding out hope that the North American auto market is anything but a massive debt-fueled bubble on the verge of imminent collapse, you may want to avert your eyes now.  For the rest of us who prefer to live in reality, as painful as it can be, today’s FY2017 earnings warning from Ally Financial offers a stinging wakeup call to auto investors. 

    And while Ally’s CEO, Chris Hanley, tried to downplay the company’s 2017 earnings guidance cut to “5% – 15%” on today’s call by saying that it was “generally in line with a 15% EPS growth path that we previously described to analysts and investors,” the market didn’t buy it. 

    And, for an equity market that often, at least to us, seems to be math-challenged, we take some solace from the fact that investors were able to quickly decide that “5% – 15%” earnings growth is not quite the same as “15%” growth. 

    ALLY

     

    Unfortunately for the rest of the auto industry, the reasoning behind Ally’s earnings cut was in no way company specific and was instead attributed to all the warning signs we’ve been writing about for months now, including: sinking used car prices courtesy of a flood of lease returns, spiking consumer delinquencies and rising OEM incentives.

    “As mentioned on the last earnings call, the lease portfolio and used vehicle declines and transition of the retail loan book with respect to provision are some things we need to work through, and makes 2017 a bit of a transition year.”

     

    “As you’ve heard from many lenders, we’re closely watching the environment, and we’ve seen some more noticeable shifts recently.”

     

    “Consumer losses have also been drifting higher, and most notably in lower credit tiers. You’ve heard back from others as well. We have seen some additional deterioration in the first quarter, and we believe that the
    delayed tax refunds may have had an impact here.”

     

    “Used vehicle prices continue to decline at a manageable rate, but a bit higher than last year’s pace. We’ve seen manufacturer incentive levels creep up, so we’re watching that closely, and we’ve seen captives continuing to increase their lease presence.”

    All of which seems to align perfectly with the data presented in J.D. Power’s latest “NADA Used Car Guide Industry Update” which recently revealed that wholesale prices of used vehicles dropped 1.6% sequentially in February 2017, marking the biggest February decline in at least 20 years.

    In a reversal of what typically occurs in February, wholesale prices of used vehicles up to eight years old fell substantially last month, dropping 1.6% compared to January. The drop was counter to the 1% increase expected for the month and marked just the second time in the past 20 years prices fell in February (last years’ scant 0.2% being the other instance).

     

    NADA Used Car Guide’s seasonally adjusted used vehicle price index fell for the eighth straight month, declining 3.8% from January to 110.1. The drop was by far the worst recorded for any month since November 2008 as the result of a recession-related 5.6% tumble. February’s index figure was also 8% below February 2016’s 119.4 result and marked the index’s lowest level since September 2010.

    NADA

     

    Of course, cars continue to be the hardest hit segment while trucks and SUV’s are holding up slightly better (you know, because oil will trend to $0 over the long-term).

    NADA

     

    Meanwhile, the OEM’s continue to undermine their own pricing by increasing incentives YoY by 15-25% in order to prop up new car volumes…

    NADA

     

    …even though it still hasn’t been enough to keep inventory under control.

    NADA

     

    But, it’s all probably nothing…those tier 2 auto suppliers probably do deserve to be trading at all-time highs.

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Today’s News 21st March 2017

  • US' Main Target In Syria Is Iran; ISIS Comes Second

    Authored by Melkulangara Bhadrakumar via The Strategic Culture Foundation,

    The common thread running through the two major ‘hot spots’ in the Middle East today – the conflicts in Syria and Libya – is undoubtedly the threat to international security from the extremist groups operating in these theatres. Therefore, Syria and Libya become test cases of the efficacy of the international community – Russia and the United States in particular – working together to steer these conflicts toward a denouement that results in the elimination of the terrorist threat and the stabilization of the situation in the two countries.

    There is a history of Russian-American engagement over Syria during the Barack Obama administration, which was surprisingly intense at times – and productive too occasionally, such as over the removal of chemical weapons from Syria or in the creation of the International Syria Support Group as a platform for a peace process.

    In the final analysis, of course, the Russian-American engagement over Syria turned out to be sub-optimal in results, which is not surprising, given the steady erosion of mutual trust in the overall relationship as a result of the Obama administration’s containment strategies toward Russia through the last year or two of his presidency.

    Plainly put, it will not be an exaggeration to say that Russia and the US are virtually in ground zero today in terms of their cooperation and coordination in meeting the terrorist challenges in Syria. The final months of the Barack Obama presidency witnessed even a calamitous decline in the US-Russia ties.

    High hopes were raised when Donald Trump emerged victorious in the US presidential election last November and the expectation was that a brave new dawn of accelerating US-Russia cooperation in fighting the Islamic State, al-Qaeda and other extremist groups in Syria was breaking.

    But so far that has not happened, and day by day the prospect seems to be altogether fading. There has been some degree of common ground between the US and Russia to ensure that a conflict situation did not arise recently over control of the strategic town of Manbij to the east of Aleppo in northern Syria, detracting attention away from the all-important offensive on Raqqa.

    Presumably, this remained an understanding specific to the fluid situation around Manbij, which were limited in scope and were rather tactical in content and completely devoid of any strategic underpinning evolved through political and diplomatic exchanges.

    The fact of the matter is that conflicting signals are emanating out of Washington. Although Trump administration is yet to spell out its policies in the Middle East, the statement made by the US Central Command chief General Joseph Votel at the Senate Armed Services Committee on March 9 contains the Pentagon’s approach that do not augur well for an effective anti-terrorist campaign in Syria.

    Gen. Votel’s testimony took place nine days after the Pentagon submitted its report on a new Middle East strategy to the White House and its postulates must be deemed to be authoritative – most certainly, they cannot be out of sync with the policymaking discourses going on in Washington at present. What emerges from Gen. Votel’s statement are mainly the following:

    Unless the «root causes of instability» in Syria are addressed, the defeat of the ISIS may turn out to be a Pyrrhic victory.

     

    Iran is responsible for propping up the Syrian government.

     

    – In the «current resource-constrained environment», US’ main preoccupation in Syria will be the operations to seize Raqqa and, secondly, the security operations «along the Jordanian border» to cut off the ISIS’ supply routes. (The game plan seems to be to cut off Iran’s access to Lebanon via land route so that Israel gets a free hand to take out Hezbollah.)

     

    Turkey, despite its transgressions in northern Syria, remains a key NATO ally and has a pivotal role to play in the fight against terrorism. (Significantly, Trump administration has deferred a final decision on Raqqa operations until the Turkish referendum on April 16 got over.)

     

    Russia and Iran are pursuing geopolitical objectives in Syria. (Gen. Votel totally ignored the two countries’ contributions in the war against terrorist groups and made no references to it.)

     

    – The Pentagon visualizes cooperation with Russia in Syria at the military level in terms of «enhancing our de-confliction mechanisms».

    It appears that the US is not looking for an anti-terrorist coalition to fight the ISIS in Syria in a concerted manner, which Russia would have liked. Washington’s preference seems to be for a limited alliance under its leadership, comprising the US’ European partners, Turkey and the GCC states. (The recent conclave in Washington on Syria, which excluded Russia and Iran, falls into perspective.)

    A question that arises here is whether it is the defeat of the Islamic State that is the US’ number one priority in Syria or the containment of Iran.

    In the US estimation, rolling back Iran’s influence in Iraq, Syria and Lebanon has become a pressing demand by its regional allies – Israel and Saudi Arabia principally – and it is, therefore, integral to the restoration of American hegemony in the Middle East.

    In the fullness of time, once Syria stabilizes, if northern and eastern Syria were to remain under US’ control or as its «sphere of influence», it could create conditions for the laying of gas pipelines connecting Qatar to the European market, which indeed has been an idea on the backburner for almost a decade.

    Curiously, the recent developments in Libya also point toward a similar ambivalent approach on the part of the US toward the fight against the extremist groups. If Trump were to keep his word about the war against terrorism being the urgent and top most priority, the US ought to be backing Khalifa Haftar who is the only figure in the chaotic Libyan landscape with the capability to vanquish the terrorist groups and bring some modicum of stability to the country in a conceivable future.

    Indeed, Haftar also happens to be a figure well-known to the US security establishment and US intelligence. However, what we are witnessing is instead a Obama-era policy of low-intensity western intervention and covert support for the Islamist Benghazi militia to push back at Haftar.

    If it is the rollback of Iran’s regional influence that seems to be the US’ number one priority in Syria, when it comes to Libya, it seems to be the old story of gaining control of its vast oil resources. Unsurprisingly, Libya’s oil ports have become the focus of months of fighting.

  • Stealing From The Citizenry: How Government Goons Use Civil Asset Forfeiture To Rob Us Blind

    Authored by John Whitehead via The Rutherford Institute,

    “Civil forfeiture laws represent one of the most serious assaults on private property rights in the nation today. Under civil forfeiture, police and prosecutors can seize your car or other property, sell it and use the proceeds to fund agency budgets—all without so much as charging you with a crime. Unlike criminal forfeiture, where property is taken after its owner has been found guilty in a court of law, with civil forfeiture, owners need not be charged with or convicted of a crime to lose homes, cars, cash or other property. Americans are supposed to be innocent until proven guilty, but civil forfeiture turns that principle on its head.  With civil forfeiture, your property is guilty until you prove it innocent.”

    – “ Policing for Profit: The Abuse of Civil Asset Forfeiture,” Institute for Justice

    In jolly old England, Robin Hood stole from the rich to give to the poor.

    In modern-day America, greedy government goons steal from the innocent to give to the corrupt under court- and legislature-sanctioned schemes called civil asset forfeiture. In fact, according to The Washington Post, “law enforcement took more stuff from people than burglars did.”

    This is how the American police state continues to get rich: by stealing from the citizenry.

    Here’s how the whole ugly business works in a nutshell.

    First, government agents (usually the police) use a broad array of tactics to profile, identify, target and arrange to encounter (in a traffic stop, on a train, in an airport, in public, or on private property) those  individuals who might be traveling with a significant amount of cash or possess property of value. Second, these government agents—empowered by the courts and the legislatures—seize private property (cash, jewelry, cars, homes and other valuables) they “suspect” may be connected to criminal activity.

    Then—and here’s the kicker—whether or not any crime is actually proven to have taken place, without any charges being levied against the property owner, or any real due process afforded the unlucky victim, the property is forfeited to the government, which often divvies it up with the local police who helped with the initial seizure.

    It’s a new, twisted form of guilt by association.

    Only it’s not the citizenry being accused of wrongdoing, just their money.

    What this adds up to is a paradigm in which Americans no longer have to be guilty to be stripped of their property, rights and liberties. All you have to be is in possession of something the government wants.

    Motorists have been particularly vulnerable to this modern-day form of highway robbery.

    For instance, police stole $201,000 in cash from Lisa Leonard because the money—which Leonard planned to use to buy a house for her son—was being transported on a public highway also used by drug traffickers. Despite the fact that Leonard was innocent of wrongdoing, the U.S. Supreme Court upheld the theft on a technicality.

    Police stole $50,000 in cash from Amanee Busbee—which she planned to use to complete the purchase of a restaurant—and threatened to hand her child over to CPS if she resisted. She’s one of the few to win most of her money back in court.

    Police stole $22,000 in cash from Jerome Chennault—which he planned to use as the down payment on a home—simply because a drug dog had alerted police to its presence in his car. After challenging the seizure in court, Chennault eventually succeeded in having most of his money returned, although the state refused to compensate him for his legal and travel expenses.

    Police stole $8,500 in cash and jewelry from Roderick Daniels—which he planned to use to purchase a new car—and threatened him with jail and money-laundering charges if he didn’t sign a waiver forfeiting his property.

    Police stole $6,000 in cash from Jennifer Boatright and Ron Henderson and threatened to turn their young children over to Child Protective Services if they resisted.

    Tenaha, Texas, is a particular hotbed of highway forfeiture activity, so much so that police officers keep pre-signed, pre-notarized documents on hand so they can fill in what property they are seizing.

    As the Huffington Post explains, these police forfeiture operations have become little more than criminal shakedowns:

    Police in some jurisdictions have run forfeiture operations that would be difficult to distinguish from criminal shakedowns. Police can pull motorists over, find some amount of cash or other property of value, claim some vague connection to illegal drug activity and then present the motorists with a choice: If they hand over the property, they can be on their way. Otherwise, they face arrest, seizure of property, a drug charge, a probable night in jail, the hassle of multiple return trips to the state or city where they were pulled over, and the cost of hiring a lawyer to fight both the seizure and the criminal charge. It isn’t hard to see why even an innocent motorist would opt to simply hand over the cash and move on.

    Unsurprisingly, these asset forfeiture scams have become so profitable for the government that they have expanded their reach beyond the nation’s highways.

    According to USA Today, the U.S. Department of Justice received $2.01 billion in forfeited items in 2013, and since 2008 local and state law enforcement nationwide has raked in some $3 billion in forfeitures through the federal “equitable sharing” program.

    So now it’s not just drivers who have to worry about getting the shakedown.

    Any American unwise enough to travel with significant amounts of cash is fair game for the government pickpockets.

    In fact, the Drug Enforcement Administration (DEA) has been colluding with the Transportation Security Administration (TSA) and local police departments to seize a small fortune in cash from American travelers using the very tools—scanners, spies and surveillance devices—they claimed were necessary to catch terrorists.

    Mind you, TSA agents already have a reputation for stealing from travelers, but clearly the government is not concerned about protecting the citizenry from its own wolfish tendencies.

    No, the government isn’t looking to catch criminals. It’s just out for your cold, hard cash.

    As USA Today reports, although DEA agents have seized more than $203 million in cash in airports alone since 2006, they almost never make arrests or build criminal cases in connection to the seized cash.

    For instance, DEA agents at the Cincinnati/Northern Kentucky International Airport stole $11,000 in cash from college student Charles Clarke—his entire life savings, in fact—simply because they claimed his checked suitcase smelled like marijuana. Apart from the sniff test, no drugs or evidence of criminal activity were found.

    Christelle Tillerson was waiting to board a flight from Detroit to Chicago when DEA agents stole $25,000 in cash from her suitcase, money she planned to use to buy a truck. Tillerson was never arrested or charged

    Joseph Rivers was traveling on an Amtrak train from Michigan to Los Angeles when police stole $16,000 in cash in a bank envelope—money the 22-year-old had saved up to produce a music when he arrived in Hollywood—based solely on their groundless suspicions that the money could have been associated with drugs.

    How does the government know which travelers to target?

    Through surveillance of Americans’ domestic travel records, by profiling train and airport passengers, and by relying on a “network of travel-industry informants that extends from ticket counters to back offices.” In one instance, the DEA actually promised to give a TSA security screener a reward for identifying luggage with large sums of cash: the more cash found, the bigger the reward.

    Starting to notice a pattern?

    First, the government claims it needs more powers and more weapons in order to fight crime and terrorism: the power to spy on Americans’ communications and travel; the ability to carry out virtual and actual strip searches of Americans’ luggage, persons and property; the authority to stop and interrogate travelers for any reason in the name of national security.

    Then, when government agents have been given enough powers and weapons to transform them into mini-tyrants, they’re unleashed on an unsuspecting citizenry with few resources to be able to defend themselves or protect their property.

    So much for those long-cherished ideals about the assumption of innocence and due process.

    For example, the federal government attempted to confiscate Russell Caswell’s family-owned Tewksbury, Massachusetts, motel, insisting that because a small percentage of the motel’s guests had been arrested for drug crimes – 15 out of 200,000 visitors in a 14-year span – the motel was a dangerous property. As Reason reports:

    This cruel surprise was engineered by Vincent Kelley, a forfeiture specialist at the Drug Enforcement Administration who read about the Motel Caswell in a news report and found that the property, which the Caswells own free and clear, had an assessed value of $1.3 million. So Kelley approached the Tewksbury Police Department with an “equitable sharing” deal: The feds would seize the property and sell it, and the cops would get up to 80 percent of the proceeds.

    Thankfully, with the help of a federal judge, Caswell managed to keep his motel out of the government’s clutches, but others are not so fortunate.

    Gerald and Royetta Ostipow had their Michigan farm and property seized, including a classic muscle car, and then sold by the local sheriff’s office. As USA Today reports:

    The Ostipows were required to provide a $150,000 cash bond before they could begin the legal proceedings to contest the forfeiture and get their property back. But they couldn’t afford to. An appeals court later overturned the Ostipow’s hefty bond requirement… But the ruling didn’t stop the nightmare for the couple who were never charged with a crime. They still had to win a court case seeking the return of hundreds of thousands of dollars’ worth of property taken from the Ostipow’s rural Michigan home, including a cherished classic car. Eventually, an appeals court found that the property was wrongly forfeited. But it was too later to recover the car. With the odometer mysteriously bearing an additional 56,000 miles, police had already sold the car and spent the proceeds.

    Despite the fact that 80 percent of these asset forfeiture cases result in no charge against the property owner, challenging these “takings” in court can cost the owner more than the value of the confiscated property itself. As a result, most property owners either give up the fight or chalk the confiscation up to government corruption, leaving the police and other government officials to reap the benefits.

    Under a federal equitable sharing program, police turn asset forfeiture cases over to federal agents who process seizures and then return 80% of the proceeds to the police. Michigan police actually get to keep up to 100% of forfeited property.

    This is what has become known as “policing for profit.”

    According to USA Today, “Anecdotal evidence suggests that allowing departments to keep forfeiture proceeds may tempt them to use the funds unwisely. For example, consider a 2015 scandal in Romulus, Michigan, where police officers used funds forfeited from illicit drug and prostitution stings to pay for …  illicit drugs and prostitutes.”

    Police agencies have also used their ill-gotten gains “to buy guns, armored cars and electronic surveillance gear,” reports The Washington Post. “They have also spent money on luxury vehicles, travel and a clown named Sparkles.”

    So what’s to be done?

    As I make clear in my book Battlefield America: The War on the American People, we are now ruled by a government so consumed with squeezing every last penny out of the population as to be completely unconcerned if essential freedoms are trampled in the process.

    Our freedoms aren’t just being trampled, however.

    They’re being eviscerated.

    At every turn, “we the people” are getting swindled, cheated, conned, robbed, raided, pickpocketed, mugged, deceived, defrauded, double-crossed and fleeced by governmental and corporate shareholders of the American police state out to make a profit at taxpayer expense.

    President Trump has made it clear his loyalties lie with the police, Attorney General Jeff Sessions has previously declared his love for civil asset forfeiture, the Supreme Court keeps marching in lockstep with the police state, and the police unions don’t want their gravy train to go away, so there’s not much hope for federal reform anytime soon.

    As always, change will have to begin locally and move upwards.

    Some state legislatures (Florida, Michigan, Nebraska, New Mexico, and Ohio) are beginning to push back against these clearly unconstitutional asset forfeiture schemes. As the National Review reports, “New Mexico now requires a criminal conviction before law enforcement can seize property, while police in Florida must prove “beyond reasonable doubt” that property is linked to a crime before it’s seized.”

    More than legislative change, however, what we need is a change of mindset on the part of the citizenry. We need to stop acting like victims and start acting like citizens with rights.

    Remember, long before Americans charted their revolutionary course in pursuit of happiness, it was “life, liberty, and property” which constituted the golden triad of essential rights that the government was charged with respecting and protecting.

    To the colonists, smarting from mistreatment at the hands of the British crown, protecting their property from governmental abuse was just as critical as preserving their lives and liberties. As the colonists understood, if the government can arbitrarily take away your property, you have no true rights: you’re nothing more than a serf or a slave.

    The Fifth Amendment to the U.S. Constitution was born of this need to safeguard against any attempt by the government to unlawfully deprive a citizen of the right to life, liberty, or property, without due process of law.

    Little could our ancestral forebears have imagined that it would take less than three centuries of so-called “independence” to once again render us brow-beaten subjects in bondage to an overlord bent on depriving us of our most inalienable and fundamental rights.

    Yet if the government can arbitrarily freeze, seize or lay claim to your property (money, land or possessions) under government asset forfeiture schemes, you have no true rights.

    Enough is enough.

  • Half Of Canadians Want Illegal Immigrants Deported

    Canada, and more specifically Prime Minister Justin Trudeau, has been applauded in recent months for its decision to lift visa requirements for Mexican ‘tourists’ as of December 1st.  Rather than a visa, under Trudeau’s administration, border hoppers are now only required to have a so-called Electronic Travel Authorisation (ETA) which can be purchased online for CAD $7.

    But, while enlightened politicians and progressive media commentators of the world endlessly praise open borders, Canada’s ‘average joes’, much like in the U.S., are apparently overwhelmingly in favor of deporting the recent influx of illegal immigrants looking to escape the ‘xenophobic’, ‘racist’ policies of Trump’s administration in the U.S.  According to a Reuters/Ipsos poll released earlier today, nearly half of Canadians want to deport people who are illegally crossing into Canada from the United States, and a similar number disapprove of how Prime Minister Justin Trudeau is handling the influx.

    Of the 1,001 Canadian voters polled by Reuters, 48% said that illegal border hoppers should be deported back to the U.S. while a similar margin, 46%, said they disagree with how Trudeau is handling the recent immigration crisis.

    Canada Immigrants

     

    Of course, just like in America, Canadians are far less concerned about ‘legal’ immigration and instead disapprove of people who are blatantly ignoring the sanctity of international borders to immigrate to their country ‘illegally’.  Nonetheless, we presume the progressives of our northern neighbor still look down upon the “xenophobic” views of the masses with the same level of indignation afforded the silent “racist” majority here in the U.S.

    The increasing flow of hundreds of asylum-seekers of African and Middle Eastern origin from the United States in recent months has become a contentious issue in Canada.

     

    There has been broad bipartisan support for high levels of legal immigration for decades in Canada. But Trudeau has come under pressure over the flow of the illegal migrants. He is questioned about it every time he appears in parliament, from opponents on the left, who want more asylum-seekers to be allowed in, and critics on the right, who say the migrants pose a potential security risk.

     

    Canadians appeared to be just as concerned about illegal immigration as their American neighbors, according to the poll, which was conducted between March 8-9. Some 48 percent of Canadians said they supported “increasing the deportation of people living in Canada illegally.”

     

    When asked specifically about the recent border crossings from the United States, the same number – 48 percent – said Canada should “send these migrants back to the U.S.” Another 36 percent said Canada should “accept these migrants” and let them seek refugee status.

    Meanwhile, just over 40% of Canadians say the recent wave if illegal immigrants make their country less safe.
    Canada Immigrants

     

    This sudden ‘racism’ epidemic, the first signs of which surfaced in the Midwest last November and resulted in the election of Donald Trump, seems to be spreading rapidly to the north and was undoubtedly planted by none other than Vladimir Putin himself…we demand that Chuck Schumer hold a hearing on this critical issue immediately. 

  • Americans Refuge In "Matrix Of Rackets" Is Failing

    Authored by Howard Kunstler via Kunstler.com,

    You might not know it, given all the ambient noise of the moment, but beyond the torments of news and propaganda there is still something called the nation. It’s more than just a political compact. Until not long ago it was also a culture, an agreed-upon set of values, practices, and customs that amounted to an identity: I’m an American. If you canvassed the crowd in Yankee Stadium one summer afternoon in 1947, I imagine each person would answer that way rather than saying I’m a wounded war veteran, I’m a WASP, I’m an oppressed housewife, I’m a negro, I’m Italian, I’m a Jew, I’m a union member, I’m a communist, I’m queer, I’m a rape victim….

    These days, the hardships of history are shattering the nation and our response politically has been to take refuge in a matrix of rackets. Most of these rackets are economic, because it’s the essence of racketeering to extract the greatest benefit possible from the object of your racket at the least cost to the racketeer. In plain English, it’s an organized way of getting something for nothing. The identity politics of our time is another form of racketeering — extracting current maximum benefits on claims of mistreatment, often bygone, specious, or only imagined.

    And so one of the truly existential questions of the moment is whether we’ll continue to be a nation, even geographically, and a lot of sentient observers aren’t too sure. Apparently we’re not too sure we even want to be. This is why the campaign slogan of Hillary Clinton, “Stronger Together,” rang so false when the Democratic Party worked so diligently in 2016 to construct separate identity fortifications and then declared culture war on the dwindling majority outside the ramparts. And you’re surprised that Donald Trump won the election?

    Trump won by making promises that he’ll never be able to keep under the current circumstances. The main promise was to restore the standard of living enjoyed in bygone decades by former industrial workers and clerks. His promise was based on a misunderstanding of history: the notion that the industrial organization of daily life was a permanent part of the human condition. You could detect by the early 21st century that this was not so anymore. That was exactly why we tried to replace it with an economy of rackets. When there’s nothing left, a lot of people are going to try to get something for nothing, because there’s nothing else to do.

    Hence, the financialization of the economy. In the 1950s, finance made up about five percent of the economy. It’s mission then was pretty simple and straightforward: to manage the accumulated wealth of the nation (capital) and then allocate it to those who proposed to generate greater wealth via new productive activities, mostly industrial, ad infinitum. It turned out that ad infinitum doesn’t work in a world of finite resources — but the ride had been so intoxicating that we couldn’t bring ourselves to believe it, and still can’t.

    With industry expiring, or moving elsewhere (also temporarily), we inflated finance to nearly 40 percent of the economy. The new financialization was, in effect, setting a matrix of rackets in motion. What had worked as capital management before was allowed to mutate into various forms of swindling and fraud — such as the bundling of dishonestly acquired mortgages into giant bonds and then selling them to pension funds desperate for “yield,” or the orgy of merger and acquisition in health care that turned hospitals into cash registers, or the revenue streams on derivative “plays” that amounted to bets with no possibility of ever being paid off, or the three-card-monte games of interest rate arbitrage played by central banks and their “primary dealer” concubines.

    Some of what I’ve listed above may be incomprehensible to the blog reader, and that is because these rackets were crafted to be opaque and recondite. The rackets continue without regulation or prosecution because there is an unstated appreciation in government, and in the corporate board rooms, that it’s all we’ve got left. What remains of the accustomed standard of living in America is supported by wishing and fakery and all that is now coming to a climax as we steam full speed ahead into Murphy’s law: if something can go wrong, it will.

    When all of America comes to realize that President Trump doesn’t know what he’s doing, it will make last November’s national nervous breakdown look like a momentary case of the vapors. What can go wrong awaits in markets, banks, currencies, and the immense dark pools of counterparty obligations that amount to black holes where notions of value are sucked out of the universe. There is so much that can go wrong. And then it will. And then maybe that will prompt us back to consider  being a nation again.

  • US "Too Big To Fail" Banks Top $1 Trillion – What Happens Next?

    For the first time ever, the market cap of America's "Big Four" banks topped $1 trillion having surged 30% since Donald Trump was elected president. While to some this is cause for celebration, we note that the last time a nation's "big four" banks topped $1 trillion in market cap did not end well…

    As Bloomberg notes, the four biggest U.S. banks were worth the most on record versus China's "Big Four" this month, as JPMorgan, Wells Fargo, Bank of America, and Citigroup were worth over $250 billion more than Industrial & Commercial Bank, China Construction Bank, Bank of China, and Agricultural Bank of China combined.

    The four Chinese banks, the world's most profitable, were worth about the same as the U.S. foursome as recently as June.

    However, as the chart above shows, while the American quartet's combined market value closed above $1 trillion for the first time last month, China achieved that goals in June 2015… and it did not end well.

  • Rex Tillerson To Skip NATO Meeting, Will Visit Russia Instead

    If after a day full of James Comey’s dramatic testimony in Congress, which according to MSNBC’s Joe Scarborough was “the worst day of Donald Trump’s presidency” after Comey stated on the record that he is not aware of any wiretapping of Trump Tower and that the FBI has been probing Russia for ties with the Trump campaign since July, Trump wanted to send the world a signal that his priorities remain focused on Russia, and he is not backing down from demanding NATO pay its “fair share”, his Secretary of State has done just that after Reuters reported that Rex Tillerson plans to skip the April 5-6 meeting of NATO foreign ministers to be present during the first US visit by China’s president, and will one week later travel to Russia, “a step allies may see as putting Moscow’s concerns ahead of theirs“, or in other words – an intentional snub.

    As Reuters adds, Tillerson intends to miss what would be his first meeting in Brussels with the 28 NATO members to attend President Donald Trump’s expected April 6-7 talks with Chinese President Xi Jinping at Trump’s Mar-a-Lago resort in Florida. While it goes without saying, two former US officials told Reuters that “the decisions to skip the NATO meeting and to visit Moscow risked feeding a perception that Trump may be putting U.S. dealings with big powers before those of smaller nations that depend on Washington for their security.”

    It is also likely to prompt further speculation of NATO-alternative alliances. State Department spokesman Mark Toner had no immediate comment on whether Tillerson would skip the NATO meeting or visit Russia. Two U.S. officials said Tillerson planned to visit Moscow on April 12.

    “It feeds this narrative that somehow the Trump administration is playing footsy with Russia,” said one former U.S. official who spoke on condition of anonymity. “You don’t want to do your early business with the world’s great autocrats. You want to start with the great democracies, and NATO is the security instrument of the transatlantic group of great democracies,” he added. NATO is also the alliance which installs anti-missile system, drastically shifting the nuclear balance of power in the region, and keeps piling up troops on the border with Russia, and is then shocked when a furious Russia lashes out.

    As for Tillerson’s visit to Russia, any visit to Moscow by a senior Trump administration official will be carefully scrutinized after the director of the FBI on Monday publicly confirmed his agency was investigating any collusion between the Russian government and Trump’s 2016 presidential election campaign.

    Perhaps this is Trump’s way of demonstrating how little he cares about the public’s reaction to Comey’s revelations. Furthermore, Trump has already antagonized and worried NATO allies by referring to the Western security alliance as “obsolete” and by pressing other members to meet their commitments to spend at least 2 percent of gross domestic product on defense.

    Quoted by Reuters, a former NATO diplomat said he hoped there might be a way for Tillerson to attend both meetings, for example by changing the date of the NATO talks.

    The former diplomat, who also spoke on condition of anonymity, said it was vital to present a united front toward Moscow. The North Atlantic Treaty Organization was created in 1949 to serve as a bulwark against the Soviet Union.

     

    “Given the challenge that Russia poses, not just to the United States but to Europe, it’s critical to engage on the basis of a united front if at all possible,” the diplomat said.

    The front may be united, but if Tillerson shows up in the Kremlin on April 12 without first making an appearance in Brussels one week prior, it will be a front of the US and Russia (and thus China) against Europe, hardly the outcome Angela Merkel was hoping for when she spoke to Trump just this past Friday.

  • Time for the US Army to invade Canada

    With the passing of David Rockefeller and Trump’s pro-USA policies, we’re seeing a number of interests in alignment that point back to one thing: a Pre-Industrial isolationist America, as we saw during the 20th century, as opposed to a New World Order leader creating superstates and intervening in costly foreign wars.  Iraq, Ukraine, Syria, Afghanistan – it all boils down to modern colonialism, a post-industrial colonialism; as we explain in our book Splitting Pennies.  

    Pulling back our troops from the middle east, closing the majority of military bases in the world like those in Germany and hundreds of other places, will leave our soldiers with little to do – putting them on the streets to fight gangs is not practical (especially with the high instances of gang members enlisted in the US Army already).  Logically, there’s one best solution – ‘as a practical matter’ that means the ‘best bang for the buck’ – INVADE CANADA.  It’s not our idea.  Take a look at this site, it’s been up for a long time:  http://invadecanada.us/

    You know if it wasn’t for Benedict Arnold (Yup, the traitor of later) losing a key battle in the Revolutionary War, Canada would probably be a part of the U.S. (But much like New Jersey, we probably wouldn’t want it).

    Reasons to invade Canada, instead of Syria:

    • More convenient.  Canada is one of two countries where the US could stage a real tank invasion, like Hitler did “Blitzkrieg”  America could have “BlingBling” and just roll over their non-existant border
    • Spoils of war.  Canada has it all!  Gold, oil, trees, minerals, coal – name it.  
    • Canada may as well be part of US.  Who are Canadians?  They are the jerks that didn’t want to leave the cozy British Empire.  
    • They speak English (although poorly).  
    • Probably will not put up a fight. 
    • Common currency system – “Loonie” can be easily absorbed into USD.  All of Canada can be 1 Fed district.
    • Although USA has invaded hundreds of countries mostly illegally – there’s only ONE COUNTRY in the WORLD other than the BRITISH that has ever INVADED USA’s borders – and that country is CANADA.  In fact, they nearly burnt the white house down to the ground.  Read about it here.

    You think it’s nuts?  Think again:

     This Is the War Plan America Will Use When It Invades Canada | The National Interest Blog

    What Would Happen in the Minutes and Hours After the US Invaded Canada? – VICE

    Revealed: America’s Secret War Plan to Invade Canada | The National Interest

    And practically, while we’re looking in caves for Terrorist camps, Canada is probably harboring more terrorists than anyone would care to admit.  With their security lacking ‘free love’ policies on immigration, anyone who can’t get into the US, goes to Canada.  We all know it.  

    It’s time for our military planners to step up and take action.  Canada, you’re next.  And hopefully, the last and only.  Mexico can remain behind Trump’s wall.  

    CANADA:  THE REAL 51ST STATE

    To learn how the Global Elite manipulate financial markets that ultimately make or break COUNTRIES – checkout Splitting Pennies – (read: Splitting Dendrites) a real mind opener.  Re Route your Axons.  Pick up a copy today!

  • US Bans Laptops, iPads, 'Anything Bigger Than A Cellphone' On Flights From 13 Countries

    U.S. government officials have temporarily banned most electronics (including laptops, iPads, and Kindles) on certain flights into and out of the country, according to Jordan’s national air carrier.

    As The Hill reports, Royal Jordanian posted on Twitter Monday that “following instructions from the concerned U.S. departments, we kindly inform our dearest passengers departing to and arriving from the United States that carrying any electronic or electrical device on board the flight cabins is strictly prohibited."

    The ban does not apply to cell phones or medical devices, but does include laptops, tablets, electronic games and cameras. Those items can be stowed in checked baggage, however.

    The Guardian notes that Saudi Arabia’s Saudia Airlines and Royal Jordanian airlines are among the affected countries; the full list has not been revealed to the affected airlines themselves.

    The email – described as a “circular” – is not a public regulation, but airlines will be expected to enforce the new rule. Airlines were issued the circular on Monday and given 96 hours to comply.

     

    The circular does not address electronic flight bags (EFBs), which allow flight crews to display diagrams mapping flight patterns, maps of airports and other digital documentation, usually on an iPad.

     

    The lack of specificity leaves airlines in the dark as to whether their employees will be cited or otherwise punished for performing the vital functions of aircraft crew as usual.

    Compliance has been swift: “Effective March 21st, the carriage of electronic and electrical devices inbound to the USA shall only be inbound in checked baggage except for mobile and medical devices,” according to a reservation agent at one of the affected airlines.

    Royal Jordanian airlines tweeted a reference to the restrictions, referring cryptically to “concerned US departments”.

    It was suggested that Royal Jordanian disobeyed the circular in part by making its existence known. (NOTE: The tweet has been deleted since The Guardian reported it.)

    Saudi Airlines, however, just tweeted and confirmed the ban..

    Makes you wonder…

    //platform.twitter.com/widgets.js

  • Ron Paul: Obamacare Repeal Or Obamacare 2.0?

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

    This Thursday, the House of Representatives will vote on a Republican bill that supposedly repeals Obamacare. However, the bill retains Obamacare’s most destructive features.

    That is not to say this legislation is entirely without merit. For example, the bill expands the amount individuals can contribute to a health savings account (HSA). HSAs allow individuals to save money tax-free to pay for routine medical expenses. By restoring individuals’ control over healthcare dollars, HSAs remove the distortions introduced in the healthcare market by government policies encouraging over-reliance on third-party payers.

    The legislation also contains other positive tax changes, such a provision allowing individuals to use healthcare tax credits to purchase a "catastrophic-only" insurance policy. Ideally, health insurance should only cover major or catastrophic health events. No one expects their auto insurance to cover routine oil changes, so why should they expect health insurance to cover routine checkups?

    Unfortunately the bill’s positive aspects are more than outweighed by its failure to repeal Obamacare's regulations and price controls. Like all price controls, Obamacare distorts the signals that a freely functioning marketplace sends to consumers and producers, thus guaranteeing chaos in the marketplace. The result of this chaos is higher prices, reduced supply, and lowered quality.

    Two particularly insidious Obamacare regulations are guaranteed issue and community ratings. As the name suggests, guaranteed issue forces health insurance companies to issue a health insurance policy to anyone who applies for coverage. Community ratings forces health insurance companies to charge an obese couch potato and a physically-fit jogger similar premiums. This forces the jogger to subsidize the couch potato’s unhealthy lifestyle.

    Obamacare’s individual mandate was put in place to ensure that guaranteed issue and community ratings would not drive health insurance companies out of business. Rather than repealing guaranteed issue and community ratings, the House Republicans’ plan forces those who go longer than two months without health insurance to pay a penalty to health insurance companies when they purchase new policies.

    It is hard to feel sympathy for the insurance companies since they supported Obamacare. These companies were eager to accept government regulations in exchange for a mandate that individuals buy their product. But we should feel sympathy for Americans who are struggling to afford, or even obtain, healthcare because of Obamacare and who will obtain little or no relief from Obamacare 2.0.

    The underlying problem with the Republican proposal is philosophical. The plan put forth by the alleged pro-free-market Republicans implicitly accepts the premise that healthcare is a right that must be provided by government. But rights are inalienable aspects of our humanity, not gifts from government.

    If government can give us rights, then it can also limit or even take away those rights. Giving government power to enforce a fictitious right to healthcare justifies government theft and coercion. Thievery and violence do not suddenly become moral when carried out by governments.

    Treating healthcare as a right leads to government intervention, which, as we have seen, inevitably leads to higher prices and lower quality. This is why, with the exception of those specialties, like plastic surgery, that are still treated as goods, not rights, healthcare is one of the few areas where innovation leads to increased costs.

    America’s healthcare system will only be fixed when a critical mass of people rejects the philosophical and economic fallacies justifying government-run healthcare. Those of us who know the truth must continue to work to spread the ideas of, and grow the movement for, liberty.

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Today’s News 20th March 2017

  • Why The Press Is Hated…

    Authored by Eric Peters via EricPetersAutos.com,

    The press wonders – or pretends to wonder – why it’s held in contempt by more than just a small handful of  people. Maybe the pressies should read what they publish.

    The other day, Automotive News published the following:

    “Dozens of U.S. cities are willing to buy $10 billion of electric cars and trucks to show skeptical automakers there’s demand for low-emissions vehicles, just as President Trump seeks to review pollution standards the industry opposes.”

    This slurry of dishonest or simply idiotic “reporting” is stupendously revealing – all the more so because it is representative of the norm. Where to begin?

    Let’s work from the back, since the worst lie – and that is exactly the correct word – squats toward the end of this vile dreck:

    “…to review the pollution standards the industry opposes.”

    Utter falsehood. I mean, other than the industry opposing part. Which of course is portrayed as all-but-demonic, with sulfurous undertones that practically waft off the page.

    The lie worthy of Dr. Goebbels at his best, though, is this business about carbon dioxide being a “pollutant.” In which case – uh oh! – it is time to put giant cones on top of volcanoes and catalytically converting muzzles on cows and for that matter us, too. Carbon dioxide is a “pollutant” in the same way that di-hydrogen monoxide (water) is a “pollutant.”

    It does not foul the air. Even slightly.

    It does not cause cancer or respiratory problems or acid rain.

    Or even acne.

    The Automotive News story is despicable because it purveys without comment or qualifier the package-dealing of an inert, non-reactive gas – C02 – with the byproducts of internal combustion engines that do foul the air, contribute to the formation of smog, irritate people’s lungs, create public health problems and cause acid rain.

    Those compounds which are pollutants, properly (scientifically) speaking.

    Carbon dioxide is a natural constituent component of the atmosphere, like water vapor and nitrogen and oxygen. To characterize C02 as a “pollutant” is either a titanic imbecility or a purposeful attempt to mislead.

    It is of a piece with the progagandizing the media performed for the government when it decided it was time to conflate those who (so they said) attacked America on 9/11 with the Iraqi government. You may recall. One minute, it was al Qaeda and the Taliban in Afghanistan. Then – as if a batch fax had been sent to every media organ in the country – it was non-stop Saddam. Just as C02 isn’t a “pollutant,” Saddam didn’t attack America. But the press did its best to purposefully confuse the issue, aiding and abetting a Nuremburg-worthy high crime – aggressive war – that went unpunished. Reichsmarschall Goring is smiling cynically, somewhere above . . . or below.

    The new Fake News is that carbon dioxide is something like carbon monoxide, or unburned hydrocarbons, oxides of nitrogen, or particulates – a danger that must be regulated and controlled. Not only is the untrue (see above) but unlike the actually harmful compounds classified (accurately) as pollutants, carbon dioxide can’t be “cleaned up” because of course it’s not “dirty” to begin with. The only thing that can be done – here it comes – is to reduce the volume produced and the only known way to do that is to . . . burn less fuel.

    In other words, it’s a fuel efficiency fatwa masquerading as an anti-pollution measure. And the object is not to increase fuel efficiency. It is to reduce the size of engines (and so, cars) and make them expensive – so that fewer people can afford to buy them. This is not spoken of openly, but it is the end goal. It must be; a single fool or demagogue could be dismissed as aberrant; this is systematic, organized.

    The government – which is a bunch of people – calculated, drew up ad then decreed (in the waning days of Obama’s presidency, knowing his successor might be  . . . skeptical)  that henceforth carbon dioxide would be considered a ”pollutant.”

    The media lapdogged that up. No “excuse me, but…”

    Nada.

    Just willing, complicit, lazy regurgitation. Or something much worse . . .

    The reaction of anyone reading the Automotive News pabulum who is in possession of junior high school-level chemistry knowledge will – rightly – be one of outrage. Unfortunately – deliberately – a working majority of the public is not in possession of junior high school-level knowledge of chemistry.

    Next item up for dissection:

    “Dozens of U.S. cities are willing to buy $10 billion of electric cars and trucks to show skeptical automakers there’s a demand for low-emissions vehicles.”

    God, my teeth ache.

    Firstly, it’s not not “dozens of cities” who will be buying these force-produced electric Edsels. It is the taxpayers of these cities who will be forced to buy them (but not own them) via the extorted funds they are compelled to provide, so that government workers can drive around in the electric Edsels.

     

    This isn’t supply and demand, market forces. It is make-work and wealth transfer. To characterize it as “demand for low-emissions vehicles” is another despicable upchuck of putrefying propaganda that depends upon the stupefaction (or enstupidation) of the reader, who will only allow the morsel to pass by if he is utterly in the dark about basic economic laws.

    And “low emissions”?

    Seriously?

    How many times must this be whack-a-moled? Electric vehicles do produce emissions, just not at the tailpipe. Does the source of pollution matter? Or just that it is produced?

    Bingo, if you picked the latter.

    First of all, the raw materials necessary to make the hundreds of pounds of batteries per electric car are not gently taken from Gaia’s willing bosom – and the batteries themselves are mini-Chernobyls of toxic waste. Oh, but they’ll be recycled! Except when they’re not. What then? Out here in The Woods, decrepit olds cars abound, left to rot in the backyard. The same fate awaits even shiny six figure Teslas. Which – one day – will be paint-blotched old hoopties left to rot – and leak – in someone’s back yard. Only instead of one roughly 45 pound led acid battery leaching into the earf, it’ll be 400-plus pounds of life-unfriendly compounds.

    Does anyone care? Shouldn’t “environmentalists”?

    Electric cars, by the way, also produce C02. In fact, they produce more “climate changing” C02 than a conventional car. Not at the tailpipe, perhaps.

    At the smokestack.

    At the “tailpipe” of the coal and oil-fired utility plants that generate the electricity which powers electric cars. If hundreds of thousands – if millions – of these electric cars are put into circulation, the demand on the grid will be great and the output of C02 even higher.

    What then?

    The press does not ask such questions. Instead:

    “Demonstrating demand” . . . so reads the subhead in the Automotive News propaganda piece.

    And yes, again, propaganda.

    Words matter. Using certain words conveys a certain meaning. People who deal in words professionally know this, instinctively. As the hawk knows how to dive.

    “Demonstrating demand” is a statement, as if of fact, that an entirely fictitious and fraudulent thing is the same thing as the real thing.

    Government buying things isn’t “demand” anymore than one is a “customer” of the IRS.

    Whatever “demand” is created, is artificial – dependent on wealth transfer, on the coercive power of the government. It is the same sort of “demand” that built the Volga canal in Stalin’s Soviet Union.

    Automotive News quotes – without comment – a statement made by a Seattle bureaucrat named Chris Bast, who is a “climate and transportation policy adviser” to the city of Seattle:

    “If you build it, we will buy it.”

    He means: If the government forces car companies to build electric cars, the government will force taxpayers to buy them. This, of course, is not translated thusly.

    The loathsome “news” article concludes:

    “Tailpipe fumes (my italics) are crucial in the fight to stop global warming.”

    The illiteracy is almost as striking as the dishonesty – or the imbecility, you decide which.

    Note the conflation – the inert, non-reactive gas (C02) is now a fume. And it is “crucial” in “the fight to stop global warming.”

    Not the galloping unchecked assumptions; the blithe acceptance, as of gravitation, of the political “science” of “global warming.”

    The awful construction would be enough to make my teeth feel loose. But the oily proselytizing is just too much.

    And they ask me why I drink . . . .

  • Technical vs. Fundamental, Report 19 Mar, 2017

    Every week we talk about the supply and demand fundamentals. We were surprised to see an article about us this week. The writer thought that our technical analysis cannot see what’s going on in the market. We don’t want to fight with people, we prefer to focus on ideas. So let’s compare and contrast ordinary technical analysis with what Monetary Metals does.

    Technical analysis, in all of its forms, uses the past price movements to predict the future price movements. In some cases (e.g. momentum analysis) it calculates an intermediate signal from the price signal (momentum is the first derivative of price). But no matter the style, one analyzes price history to guess the next price move.

    This is necessarily probabilistic. There is no way to know that a particular price move will follow the chart pattern you see on the screen. There is no certainty. And when it does work, it is often because of self-fulfilling expectations. Since all traders have access to the same charts, and the same chart-reading theories, they can buy or sell en masse when the chart signals them to do so.

    We are not here to argue for or against technical analysis. We simply want to say that it’s not what we are doing. Not at all.

    Our analysis is based on different ideas. The key idea is that there is a connection between the spot and futures market. That connection is arbitrage. Think of each market as a platform that moves up and down on its own vertical track. The two tracks are close together. And the platforms are connected to each other by a spring. Suppose platform A is a bit above platform B. If you push up on A, then the spring stretches a bit more and will pull B up, though perhaps not as much. The same happens if you push down on B.

    Conversely, if you push down on A, then it will compress the spring and platform B will tend to go down, though not as much.

    A and B are the futures and spot markets for gold (the same analogy applies to silver). Arbitrage works just like a spring. If the price in the futures market is greater than the price in the spot market, then there is a profit to carry gold—to buy metal in the spot market and sell a futures contract. If the price of spot is higher, then the profit is to be made by decarrying—to sell metal and buy a future.

    There are two keys to understanding this. One, when leveraged speculators push up the price of gold futures contracts, then that increases the basis spread. A greater basis is a greater incentive to the arbitrageur to take the trade. Two, when the arbitrageur buys spot and sells a future, the very act of putting on this trade compresses the spread.

    If someone were to come along and sell enough futures contracts to push down the price of gold by $50 or $150 or whatever amount is alleged, then this selling would be on futures only. It would push the price of futures below the price of spot, a condition called backwardation.

    Backwardation just has not happened at the times when the stories of the big “smash downs” have claimed. Monetary Metals has published intraday basis charts during these events many times.

    The above does not describe technical analysis. It describes physics—how the market functions at a mechanical level.

    There are other ways to check this. If there was a large naked short position in a contract that was headed into expiry, how would the basis behave? The arbitrage theory predicts the opposite basis move. We will leave the answer out as an exercise for the interested reader, as thinking this through is really good work to understand the dynamics of the gold and silver markets (and you can Google our past articles, where we discuss it).

    This check can be observed every month, as either gold or silver has a contract expiring (right now it’s gold, as the April contract is close to First Notice Day).

    This week, the prices of the metals both rose. The price of gold is almost back to where it was the prior week, but that of silver is not.

    Below, we will show the only true picture of the gold and silver supply and demand. But first, the price and ratio charts.

    The Prices of Gold and Silver
    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 moved sideways this week.

    The Ratio of the Gold Price to the Silver Price
    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 Gold Basis and Cobasis and the Dollar Price

    NB: we switched from the April to the June gold contract.

    As the price of the dollar fell (inverse of the rising price of gold, measured in dollars) we see the cobasis (our measure of scarcity) increased a bit. This means the buying in gold, which pushed up the price, was buying more of physical than of futures. This seems to be the new pattern of late, though it is sputtering a bit like an engine trying to start up and run at a steady RPM.

    Our calculated fundamental price of gold is up nearly $50. It is now over $1,400.

    Now let’s look at silver.

    The Silver Basis and Cobasis and the Dollar Price
    The Silver Basis and Cobasis and the Dollar Price

    The story is the same in silver. Rising price accompanied by rising scarcity.

    The silver fundamental price rose 50 cents. It is now aboit $1.30 over market.

    © 2017 Monetary Metals

  • Mike Krieger Asks "Is Trump About To Massively Expand America's Imperial Wars?"

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    Trump

    Equal and exact justice to all men, of whatever state or persuasion, religious or political; peace, commerce, and honest friendship with all nations, entangling alliances with none. – Thomas Jefferson’s Inaugural Address, March 4, 1801

    Many people voted for Donald Trump based on his pledge of “America First.” The idea behind this partly relates to the very legitimate concern that the U.S. Empire and its military-industrial-contractor benefactors have been squandering an enormous amount of treasure and tax money on foreign adventurism, funds which could be of much greater use at home helping struggling Americans, fixing our broken economy and infrastructure. I’m starting to become increasingly concerned that rather than winding down America’s foreign adventures, Trump and his team are preparing to expand them.

    The always excellent Robert Parry at Consortium News got me thinking about this with his recent post. Here are a few excerpts:

    The Kagan family, America’s neoconservative aristocracy, has reemerged having recovered from the letdown over not gaining its expected influence from the election of Hillary Clinton and from its loss of official power at the start of the Trump presidency.

     

    Back pontificating on prominent op-ed pages, the Family Kagan now is pushing for an expanded U.S. military invasion of Syria and baiting Republicans for not joining more enthusiastically in the anti-Russian witch hunt over Moscow’s alleged help in electing Donald Trump.

     

    In a Washington Post op-ed on March 7, Robert Kagan, a co-founder of the Project for the New American Century and a key architect of the Iraq War, jabbed at Republicans for serving as “Russia’s accomplices after the fact” by not investigating more aggressively.

     

    Then, Frederick Kagan, director of the Critical Threats Project at the neocon American Enterprise Institute, and his wife, Kimberly Kagan, president of her own think tank, Institute for the Study of War, touted the idea of a bigger U.S. invasion of Syria in a Wall Street Journal op-ed on March 15.

     

    Yet, as much standing as the Kagans retain in Official Washington’s world of think tanks and op-ed placements, they remain mostly outside the new Trump-era power centers looking in, although they seem to have detected a door being forced open.

     

    On Wednesday in The Wall Street Journal, Robert Kagan’s brother Frederick and his wife Kimberly dropped the other shoe, laying out the neocons’ long-held dream of a full-scale U.S. invasion of Syria, a project that was put on hold in 2004 because of U.S. military reversals in Iraq.

     

    But the neocons have long lusted for “regime change” in Syria and were not satisfied with Obama’s arming of anti-government rebels and the limited infiltration of U.S. Special Forces into northern Syria to assist in the retaking of the Islamic State’s “capital” of Raqqa.

     

    In the Journal op-ed, Frederick and Kimberly Kagan call for opening a new military front in southeastern Syria:

     

    “American military forces will be necessary. But the U.S. can recruit new Sunni Arab partners by fighting alongside them in their land. The goal in the beginning must be against ISIS because it controls the last areas in Syria where the U.S. can reasonably hope to find Sunni allies not yet under the influence of al Qaeda. But the aim after evicting ISIS must be to raise a Sunni Arab army that can ultimately defeat al Qaeda and help negotiate a settlement of the war.

     

    “The U.S. will have to pressure the Assad regime, Iran and Russia to end the conflict on terms that the Sunni Arabs will accept. That will be easier to do with the independence and leverage of a secure base inside Syria. … President Trump should break through the flawed logic and poor planning that he inherited from his predecessor. He can transform this struggle, but only by transforming America’s approach to it.”

     

    By the last years of the Obama administration, the stage was set for the neocons and the Family Kagan to lead the next stage of the strategy of cornering Russia and instituting a “regime change” in Syria.

     

    All that was needed was for Hillary Clinton to be elected president. But these best-laid plans surprisingly went astray. Despite his overall unfitness for the presidency, Trump defeated Clinton, a bitter disappointment for the neocons and their liberal interventionist sidekicks.

     

    Yet, the so-called “#Resistance” to Trump’s presidency and President Obama’s unprecedented use of his intelligence agencies to paint Trump as a Russian “Manchurian candidate” gave new hope to the neocons and their agenda.

     

    It has taken them a few months to reorganize and regroup but they now see hope in pressuring Trump so hard regarding Russia that he will have little choice but to buy into their belligerent schemes.

     

    As often is the case, the Family Kagan has charted the course of action – batter Republicans into joining the all-out Russia-bashing and then persuade a softened Trump to launch a full-scale invasion of Syria. In this endeavor, the Kagans have Democrats and liberals as the foot soldiers.

    Robert perfectly sets the stage for exactly how the neocons are attempting to push Trump into expanding these foolish imperial wars, specifically the war in Syria, which is actually just a proxy war against Russia. His warning takes on increased importance when viewed in the context of recent headlines about the Trump administration preparing to ramp up troop numbers in Syria.

    First, let’s take a look at an article published March 9th in The New York Times titled, U.S. Is Sending 400 More Troops to Syria:

    WASHINGTON — The United States is sending an additional 400 troops to Syria to help prepare for the looming fight for Raqqa, the capital of the Islamic State’s self-proclaimed caliphate, American officials said on Thursday.

     

    The increase, which includes a team of Army Rangers and a Marine artillery unit that have already arrived in Syria, represents a near-doubling of the number of American troops there.

     

    The United States military has declined to say how many troops it has deployed in Syria. The formal troop cap is 503, but commanders have the authority to temporarily exceed that limit.

     

    "The exact numbers and locations of these forces are sensitive in order to protect our forces, but there will be approximately an additional 400 enabling forces deployed for a temporary period to enable our Syrian partnered forces to defeat ISIS in Raqqa,” Colonel Dorrian added.

     

    Now, Marine artillery is being added, along with logistical support and training and protection in dealing with improvised explosive devises.

     

    Gen. Joseph L. Votel, the head of the United States Central Command, told reporters on Thursday that he was open to asking for more conventional military units if they are needed.

     

    Turning to other regions, General Votel said he agreed the Afghan conflict was stalemated and supported the appeal from the American commander in Afghanistan for additional troops.

    Now here’s where it gets a little weird. Less than a week after that article was published, the number of possible additional troops suddenly has surged to 1,000.

    The U.S. military has drawn up early plans that would deploy up to 1,000 more troops into northern Syria in the coming weeks, expanding the American presence in the country ahead of the offensive on the Islamic State’s de facto capital of Raqqa, according to U.S. defense officials familiar with the matter.

     

    The deployment, if approved by Defense Secretary Jim Mattis and President Trump, would potentially double the number of U.S. forces in Syria and increase the potential for direct U.S. combat involvement in a conflict that has been characterized by confusion and competing priorities among disparate forces. 

    Makes you wonder what the troop levels will be in a week, a month or a year from now. What the heck is going on here and where is the U.S. Congress in all of this? When did we declare war on Syria?

    The whole thing stinks of neocon foreign policy infiltration into the Trump administration, and it makes me wonder whether America’s imperial wars will be expanded aggressively under Trump, contrary to what many had voted for.

    Let’s hope not, but as we learned under Obama, hope is not a strategy.

  • Chinese Home Prices "Unexpectedly" Rebound; Government Loses Interest In "Curbs"

    On Friday, we summarized research reports from Deutsche Bank and Bank of America, which came to the same conclusion: the fate of the global economic rebound may be in the hands of the Chinese housing bubble, which through price appreciation has unleashed wealth effect equivalent to twice the annual disposable income of China.

     

    We concluded by saying that those who are looking for key inflection points to determine the future trajectory of the global economy, in addition to the global (read Chinese) credit impulse, we suggest keeping a close eye on what happens with Chinese housing, which has become a – if not the – top variable for the fate of the both the great inflation-deflation debate, as well as the overall fate of the world economy

    The key variable is “how Beijing manages to deflate the existing bubble: if it fails to be aggressive enough, home prices will once again spike, leading to an even more precarious bubble. If it is too aggressive, a hard landing is in store, coupled with what a crash in the country’s financial system, where the bulk of the banks’ $35 trillion in assets is collateralized by housing values. While such a crash may not necessarily lead to a catastrophe for China, where the government ultimately backstops all the banks, the deflationary wave spread around the globe from a housing crash would be dire.”

    One answer was revealed just hours later, when on Saturday China’s NBS revealed that following two months of broad but shallow declines, in February there was an unexpected rebound in Chinese home prices, which last month rose in more cities despite increased “restrictions” on property transactions by local authorities. As Bloomberg reported, new home prices, excluding subsidized housing, gained in February in 56 out of 70 cities tracked by the government, compared with 45 in January, the National Bureau of Statistics said Saturday. Furthermore, prices climbed in 67 out of 70 cities from a year earlier, compared with 66 in January. 

    As Goldman calculates, prices in the primary market increased 0.4% month-over-month after seasonal adjustment (weighted by population) in February, the same as the growth rate in January.

    And while on a year-over-year, population-weighted basis, housing prices in the 70 cities were up 12.0%, slightly lower than 12.4% yoy in January, the nuance was once again among the various city ties. On month-over-month basis, house price growth diverged among different city tiers. Home price inflation decelerated in tier-1 cities, but home price inflation in tier 2/3/4 cities was steady or accelerated, which goes back to the core issue discussed last Friday: for all the talk about moderating home prices, China is first and foremost focused on preserving the wealth effect, which a sharp drop in home prices would crush.

    February average price growth was 0.2% month-over-month after seasonal adjustment in tier-1 cities, vs. 0.3% in January. Average property price inflation in tier 2/3/4 cities was 0.6%/0.4%/0.5% month-over-month sa in February, vs 0.5%/0.4%/0.3% in January.  Indeed, as Bloomberg Intellgience wrote earlier in March, braking measures to counteract soaring home prices in eastern China’s largest cities appear to be diverting demand to smaller ones. Saturday’s data confirms this.

    * * *

    The unexpected pick up in prices takes place as various Tier 1 cities are taking further measures to cool the market: among them, Beijing on Friday raised down-payment requirements for second homes 10 percentage points to between 60 percent and 80 percent. The rule also applied to buyers who don’t currently own a home but previously had a mortgage with the same down-payment threshold, making it harder for someone to sell their house to upgrade to a bigger or more expensive property.

    Other cities taking additional measures were the southern export hub of Guangzhou, coastal Qingdao and Nanjing in the southeast have also tightened measures. Changsha, the capital of inland Hunan province, joined the ranks on Saturday after the home price data release.

    “The government intends to pause the surging home prices, and let them walk steadily up later,” said Xia Dan, a Shanghai-based analyst at Bank of Communications Co., adding that if curbs on demand are lifted, prices will rise further. “The government doesn’t want the prices to run all the time and ferment bubbles.”

    As Bloomberg notes, China’s biggest cities have seen a round of home price surges in the past year. In Beijing, new home prices rose 24 percent in February from a year earlier, while Shanghai saw a 25 percent gain. Shenzhen prices increased 14 percent in the same period.

    “Beijing’s tightening will have a short-term effect to stabilize the market, but the power of policy has become increasingly weaker,” Zhang Hongwei, a research director at Shanghai-based Tospur Real Estate Consulting Co., said Friday, adding more local tightening may follow.

    Or maybe not, because one may ask: is the rebound really unexpected. Perhaps not: as the WSJ reported on Sunday, “this year it seemed China was finally going to make headway on an idea familiar to U.S. homeowners: a property tax.

    For many Chinese families, owning a home is one of few options to build wealth, driving buying frenzies as people rush to purchase before prices soar. Imposing costs on homeowners through a property tax is seen as a way to tame such speculation, while also helping fund local governments.

     

    Lu Kehua, China’s vice housing minister, last month said the government needed to “speed up” a property-tax law. Economists and academics have long recommended the move.

     

    Yet the annual National People’s Congress came and went this month with no discussion of the topic. An NPC spokeswoman said a property tax wouldn’t be on the legislative agenda for the rest of the year.

    In short, China evaluted the risk of a potential housing bubble burst, and deciding that – at least for the time being – it is not worth the threat of losing a third of Chinese GDP in “wealth effect”, got cold feet. Expect the recent dip in home prices to promptly stabilize, with gains in the short-term more likely that not.

  • New Study In D.C. Finds That New $15 Minimum Wage Could Cost 1,200 Jobs

    Authored by Ted Goodman via The Daily Caller

    A new study that analyzes the potential effects of a $15 minimum wage in the District of Columbia (Washington, D.C.), found that an increase to $15 could cost 1,200 jobs.

    DC

     

    The District of Columbia’s Office of Revenue Analysis released a report Thursday, asserting that 150,000 workers in the District would be affected by the higher minimum wage and as many as 1,200 jobs could be lost by 2020 due to the new policy.  Of course, nearly one-third of those jobs are in the food service industry where young people, already suffering from massive unemployment rates, represent a disproportionate percentage of the labor force. 

    DC

     

    The study further states that as many as 2,000 jobs could succumb to the increased minimum wage by 2026.

    The mayor’s “Fair Shot Minimum Wage Amendment Act,” stipulates that the minimum wage increases to $15 an hour by 2020, with incremental increases each year. The minimum wage is currently $11.50.

    DC

     

    The findings revealed that nearly two-thirds of the pay increases will benefit non-D.C. residents who work in the District, but live elsewhere (likely Virginia or Maryland, which borders D.C.). While nearly two-thirds of the pay increases go to non-residents, D.C. residents will absorb 80 percent of the job losses.

    “This study proves what we’ve known all along: this dramatic D.C. wage hike will hurt the most vulnerable in the District, costing them jobs and important economic opportunities,” Jeremy Adler, Communications Director for America Rising Squared, a conservative policy organization, told the Daily Caller News Foundation (TheDCNF).

    “D.C. must focus on creating more good-paying jobs for workers that need them the most and it’s clear an artificial minimum wage increase is the wrong approach to achieving this goal,” Adler continued.

    The Obama administration proposed an increase to the federal minimum wage from $7.25 to $9.00 an hour in 2013. The former president continued to call for an increase in the federal minimum wage throughout his presidency.

    Seattle, Washington raised its minimum wage to $15 in 2014, followed by San Francisco and Los Angeles. New York Gov. Andrew Cuomo signed into law a new $15 minimum wage for his state in 2016, and the University of California proposes to pay its low-wage employees $15.

  • Deutsche Bank Prices €8 Billion Stock Offering At 35% Discount

    Two weeks after Deutsche Bank first announced it would raise €8 billion in capital as part of a comprehensive restructuring, the German lender on Sunday announced the terms of its upcoming massive dilution.

    In a nutshell, Deutsche Bank said it will raise €8 billion ($8.6 billion) by selling stock at a 35% discount to Friday’s closing price in a rights offering. The TERP (Theoretical ex-right price) of €15.79, is based on the last closing price of €17.86. The transaction subscription price is €11.65. The Subscription price represents a 26% discount to TERP based on the March 17 closing price.

    The mechanics of the offering: Deutsche Bank will issue 687.5 million new shares at €11.65 apiece, it said in a statement Sunday, in-line with the firm’s March 5 announcement on the planned sale. The offer compares with the stock’s closing price of €17.86 on Friday, and is almost 41% lower than where the stock traded when Bloomberg first broke the news of the imminent capital raising on March 3.

    As part of the rights offering, DB shareholders may subscribe for 1 new ordinary share for every 2 existing shares held. The subscription rights expected to be traded on German exchanges March 21-April 4, and on NYSE March 21-31. As Bloomberg adds, the reference price for rights is expected to be approximately €2.07.

    The sale of equity will be the fourth capital infusion for Deutsche Bank since 2010. Chief Executive Officer John Cryan, who had previously said he didn’t want to tap shareholders, reversed course this month after the shares almost doubled from their September low and Deutsche Bank was unable to find a buyer for a consumer banking unit. Still, even after DB’s shares decline this month ahead of the capital increase, the stock is still up 80% from the record low on Sept. 30, amid what Bloomberg call “renewed optimism for banks as investors speculate economic growth and rising borrowing costs could revive earnings.”

    “The environment for the share sale is almost perfect, given the expectation of higher interest rates and buoyant equity markets,” Ingo Frommen, an analyst with LBBW who has a hold recommendation on the stock, said ahead of Sunday’s announcement.

    So “perfect” in fact, buyers of DB equity would not take less than a 35% discount to market.

    As a reminder, Deutsche Bank earlier said that the capital increase was fully underwritten at €11.65 a share by banks including Credit Suisse, Barclays, Goldman Sachs, BNP Paribas, Commerzbank, HSBC, Morgan Stanley and UniCredit. The group of banks underwriting the deal has increased to 30, it said Sunday.

    Who is the dumb money this time around: Qatar’s royal family and China’s HNA Group Co., two of Deutsche Bank’s biggest investors, plan to buy shares in the rights offer with a view to increasing their stakes, Bloomberg reported.

  • America First? 200,000 Troops Deployed To 177 Nations

    There was no shortage of cuts proposed in Trump’s budget for 2018, which was released earlier this week. However, as Visual Capitalist's Jeff Desjardins notes, one of the few departments that did not receive a haircut was the Department of Defense. If the proposed budget ultimately passes in Congress, the DoD would be allocated an extra $54 billion in federal funding – a 10% increase that would be one of the largest one-year defense budget increases in American History.

    To put the proposed increase in context, the United States already spends more on defense than the next seven countries combined. Meanwhile, the additional $54 billion is about the size of the United Kingdom’s entire defense budget.

    Courtesy of: Visual Capitalist

     

    “BE ALL YOU CAN BE”

    With over half of all U.S. discretionary spending being put towards the military each year, the U.S. is able to have extensive operations both at home and abroad. Our chart for this week breaks down military personnel based on the latest numbers released by the DoD on February 27, 2017.

    In total, excluding civilian support staff, there are about 2.1 million troops. Of those, 1.3 million are on active duty, while about 800,000 are in reserve or part of the National Guard.

    On a domestic basis, there are about 1.1 million active troops stationed in the United States, and here’s how they are grouped based on branch of service:

    Internationally, there are just under 200,000 troops that are stationed in 177 countries throughout the world.

    In 2015, Politico estimated that there are 800 U.S. bases abroad, and that it costs up to $100 billion annually to maintain this international presence.

  • Senator Hints That Trump May Resign: "I Think He Is Going To Get Himself Out"

    Authored by Mac Slavo via SHTFplan.com,

    It’s no secret that there is a concerted effort underway to do everything possible to remove President Donald Trump from office.

    From Russian ties to business conflicts of interests, both Democrats and Republicans are actively working to find chinks in the President’s armor.

    But for those with hope of change in their hearts, Democrat Senator Diane Feinstein says there is a possibility that Trump will eventually remove himself from office by filing his own resignation.

    Speaking to a crowd during a town hall-style Questions and Answers session, Feinstein was asked how Congress is going to deal with Trump’s alleged illegal activities:

    Journalist: We don’t know what’s happening but we know that he is breaking laws every day, he’s making money at Mar-a-lago, he’s getting copyrights in China, he has obvious dealings with Russia, the Dakota pipeline… there’s some many things that he’s doing that are unconstitutional… how are we going to get him out?

     

    Feinstein: We have a lot of people looking at this… Technical people… I think he’s going to get himself out… I think sending sons to another country to make a financial deal for his company and then have that covered with government expenses… I think those government expenses should not be allowed.. we are working on a bill that will deal with conflict of interest… it’s difficult…

    Videos of Feinstein speaking to what appears to be a local press pool of reporters and protesters appear below. You can jump to 1:30 in the first video to listen to Feinstein discuss Trump’s conflicts of interests, or watch from the beginning to hear Feinstein’s response to how her husband’s firm directly benefited from bills she voted into law, proving once again that the hypocrisy of socialist Congressional representatives from California has no bounds…

    Part 1:

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    Part2:

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  • Deutsche Bank: "The Probability Of A Negative Shock Is High"

    For the second week in a row, Deutsche Bank’s strategist Parag Thatte has a somewhat conflicted message for the bank’s clients: on one hand, he writes that positive economic surprises continue “but are getting less so”, and although the divergence between hard data surprises and sentiment is diminishing the bank is somewhat confident that a “pullback in the very near term is unlikely” (here DB disagrees with Goldman Sachs). However, Thatte is increasingly hedging, and notes that because a “rally without a 3-5% sell-off that is typical every 2-3 months is now running over 4 months and is in the top 10% of such rallies by duration”, he cautions that “the probability of seeing a negative shock is high” especially since Q1 buyback blackout period has begun.

    Here are the key observations from the Deutsche Bank strategist:

    • The equity market rally has been going uninterrupted for a long time, driven by the unusual resurgence of positive data surprises. Strong data surprises drove equity inflows and fund positioning, adding to the steady support from buybacks. An expectation that positive data surprises were likely to persist underpinned DB’s call 2 weeks ago that a pullback was unlikely in the very near term. The bank takes stock of the current situation below:
    • Duration of rally now in top 10%. The rally without a 3-5% sell-off that is typical every 2-3 months is now running over 4 months and is in the top 10% of such rallies by duration.

    • Data surprises positive but getting less so. While incoming data in the last week has continued to surprise to the upside relative to consensus, it has done so at a more modest rate and DB’s data surprises index, the MAPI, is now declining off its highs.

    • Divergence between sentiment and hard data surprises diminishing. Attention has focused on the divergence between sentiment data which has run up strongly and hard data which has so far lagged. In terms of surprises, i.e., relative to what’s priced into consensus forecasts, hard data surprises have fallen back to neutral over the last two weeks, while sentiment surprises have declined this week but remain elevated. The surge in sentiment data is getting built into consensus forecasts and sentiment surprises also moving down to neutral over the next 3-4 weeks.

    • Fund positioning already trimmed in line with neutral hard data surprises. US funds have already been trimming equity exposure for the last three weeks in line with the decline in hard data surprises suggesting funds may already be anticipating a modest slowdown in overall data. Real money equity mutual funds are already close to neutral but asset allocation funds and long-short equity hedge funds are still overweight. Macro hedge funds are exposed to short rates positions in our view, not long equities.

    • Inflows accelerate. The pace of US equity fund inflows has accelerated over the last 4 weeks ($36bn). However flows have been closely tied to overall data surprises and could start to moderate in turn.

    • Buyback blackout period has begun. Heading into the Q1 earnings season, the pace of buybacks will slow as an increasing number of companies enter earnings blackout periods starting this week.

    * * *

    DB’s summary take on near-term equity moves:

    Continued muddle through most likely in the near term. The fundamental drivers as well as demand-supply considerations for equities point to a continued muddle through in the near term. However history suggests that with the duration of the rally already in the top 10% by duration, the probability of seeing a negative shock is high. But the medium term outlook remains robust with the unfolding growth rebound having plenty of legs while from a demand-supply point of view flow under-allocations to US equities and robust buybacks remain very supportive.

    * * *

    Away from equities, the picture in rates, commodities and currencies based on trader flows is as follows:

    • Oil falls but still expensive and long positioning still elevated. Following the November OPEC supply-cut announcement oil prices became very expensive on our medium term valuation framework for oil and commodities based on the trade-weighted dollar and global growth (Trading The Commodity Underperformance Cycle, Apr 2013). The decline in oil prices over the last two weeks has trimmed the extent of overvaluation but leaves oil prices slightly above the upper-end of the historical 30% overvaluation band which has marked extremes (currently $48). Net long positions are off of recent record highs but remain quite elevated.
    • Extreme short positions remain an overhang for rates moving up. Bond yields fell sharply after the rate hike this week much like they did after the December one. While real money bond funds remained close to neutral going into the FOMC this week, leveraged funds shorts in bond futures remained near extreme highs. Outside of HY funds which saw a large outflow as oil prices fell this week, bond funds have continued to receive robust inflows. Indeed duration sensitive funds have this year completely recouped all of the outflows seen in the aftermath of the elections.
    • Gold valuations stretched again. Gold prices have rallied on the back of a return of inflows into gold funds this year reversing the modest outflows in Q4. Massive cumulative inflows since early 2016 ($40bn) remain an overhang. Gold longs had been declining heading into the FOMC meeting. Gold prices have again disconnected sharply to the upside from the historical drivers of the dollar and the 10y yield as well as global growth. Copper long positions continued to slide for a 6th straight week.

    • Shorts in the Mexican peso, the best performing currency this year, have collapsed to neutral. Mexican peso shorts fell sharply last week to the lowest levels in over 15 months as gross shorts fell sharply while longs also rose. Aggregate long dollar positions had been rising going into the FOMC meeting reflecting rising shorts in the yen and sterling even as euro shorts were pared.

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Today’s News 19th March 2017

  • Beijing Goes Global: China Expands Marine Force 400%; First Overseas Military Base Almost Complete

    Authored by Daniel Lang via SHTFplan.com,

    For most of its recent history, China has largely been a land power with no significant naval capabilities. They haven’t been able to exert much military influence beyond their coastline for hundreds of years. In fact, one of the reasons why Western powers had no trouble bullying China during the 19th and 20th centuries, was because the Imperial Navy under the Qing dynasty was incredibly weak. With that in mind, it’s no surprise that lately, China has been putting a lot of effort into building an effective overseas naval force.

    Not only have they been busy constructing their first combat-ready aircraft carrier, the Chinese have also been developing new aircrafts to accompany it. Of course, a navy can’t really exert much military influence if it doesn’t have soldiers to deploy. That’s why Chinese officials have recently announced that they are preparing to rapidly expand the ranks of the People’s Liberation Army Marine Corps.

    Chinese media is reporting the People’s Liberation Army’s ambitious new plans following the announcement of a 7 per cent increase to $200 billion in defence spending last week.

     

    Among the details to emerge is a move to boost China’s marine corps — highly trained and well equipped troops intended for rapid deployment and offensive missions launched from the sea — from an existing 20,000 troops to more than 100,000.

     

    Chinese officials have stated this is to protect arterial maritime trade routes and enforce its growing overseas interests.

    “What growing overseas interests” you might ask?

    Well, China has been in the process of building their first overseas military base in Djibouti, on the Horn of Africa. And that base is expected to be completed this summer.

    Marine Gen. Thomas Waldhauser, commander of AfriCom, told the Senate Armed Services Committee that he expected the Chinese base on the Horn of Africa to be operational later this summer.

     

    Without getting specific, Waldhauser said he recently met with Djibouti’s President Ismail Omar Guelleh “and expressed our concerns about some of the things that are important to us about what the Chinese should not do at that location.”

     

    The Chinese base would be about four miles from the U.S. base at Camp Lemonnier, one of the Pentagon’s largest and most important foreign military installations, where about 3,000 U.S. military personnel and contractors are assigned to Combined Joint Task Force-Horn of Africa.

    Given that base’s close proximity to Camp Lemonnier, China’s intentions are obvious.

    They want what the United States has, which is a vast overseas empire, and an expeditionary force that can reach any coastline in the world. They want to compete with our current role in the global theater. Unfortunately, there isn’t enough room in the world for two countries carrying out that role. We may very well be witnessing the first stages of a new conflict between the United States and China.

  • Is Denmark On The Brink?

    Authored by Erico Matias Tavares via Sinclair & Co.,

    Iben Thranholm examines political and social events with focus on their religious aspects, significance and moral implications. She is one of Denmark’s most widely read columnists on such matters. Thranholm is a former editor and radio host at the Danish Broadcasting Corporation (DR), at which she created a religious news program that set a new standard for religious analysis in the newsroom. She has traveled extensively in the Middle East, Italy, the United States and Russia to carry out research and interviews. She has been awarded for her investigative research into Danish media coverage of religious issues.

     

    E Tavares: Iben, thank you for being with us today. Over a year ago we talked to Dr. Tino Sanandaji, an economics professor at a leading Swedish university, on the inconsistencies of Swedish immigration policies. The resulting post was hit, revealing a significant interest for this topic. 

    In a sense Sweden is the canary in the coalmine of Europe’s demographic future, since they have been at the forefront of this transformation and openly embrace it. Being a close neighbor we would like to get your views on what is happening there, as well as in Denmark. How do the Danes look at Sweden, with hope or apprehension? 

    I Tranholm: With absolute horror! 

    The Swedish media, which is quite pro-government and its leftwing policies, does not always report the full extent of the problems in their society. So it is hard to have a very accurate picture of what is going on. But we in Denmark have a good sense. We are very aware of the murders, rapes, riots, violence and the hand grenades that go on there. This does not often make the news but we know it is going on. And we don’t want to go down the same route. 

    This is the result of decades of policies promoting multiculturalism in Sweden. And what is left is this hollow house. You know, in the Bible it is said that if a house is left swept, tidied and unoccupied it eventually it will be taken over by evil. And I fear that this is what is happening in Sweden. Far from being a multicultural paradise, the problems can no longer remain hidden. 

    ET: Indeed, even President Trump made some controversial comments about Sweden at a recent rally in the US, causing an international uproar, with many debates on whether he was right or wrong. Did this cause some discussion in Denmark as well?

    IT: It wasn’t much of a discussion because we in Denmark know what is happening in Sweden. Malmo is very close so we only need to go there to see it with our own eyes. 

    There was a TV ad partially paid by the Swedish government recommending that all Swedes integrate into this new multicultural society they are creating. Think about that. Even old Swedes now need to adjust to this new reality, instead of immigrants adapting to Swedish society. They call it “Det nya landet”, which means the new country. Traditional Sweden is gone.

    ET: Swedes and Danes share many cultural traits. What explains this divergence in opinions? Is it because you do not face the same societal problems? 

    IT: We are not as politically correct as the Swedes. So there is a lot of discussion here. (…) As such we have a greater awareness of our heritage and tend to be more protective of it.

    Which is not to say we don’t have problems. We do. We face the same identity issues, and our traditions – in particular our Christian heritage – are fast disappearing from our society. That same hollowness is now becoming mainstream in Denmark. And this eliminates much of the arguments to defend ourselves against the importation of foreign values and customs, many of which are at odds with our own. Simply forbidding things will not change this reality. 

    ET: And how has integration been? Seems to be going better than other European countries since we don’t hear much about “no-go” zones and riots in your country, unlike France and Sweden, for instance.

    IT: We have those problems as well but because Denmark is a small country you won’t hear about them as much. 

    We have this belief here that welfare is the solution for everything. No matter who comes here from whatever part of the world will get housing, work, entertainment and healthcare. The government will give those to you with the expectation that if you have all those things you will happily assimilate into Danish society, learn Danish and adapt to our culture. As a result we will become a vibrant multicultural society. 

    The reality is quite different. The relativism that this multiculturalism engenders ends up putting different sides of society at odds with each other, especially when their values and beliefs are very different to begin with.

    When immigrants come to Denmark they may be taken care of, but they have no dominant culture that they can assimilate into, certainly not in the religious sense. We are completely devoid of God. And as a result they end bringing elements of their culture and religion which often create friction, misunderstandings and also crime. So Danish society becomes more and more divided as a result. 

    ET: Politicians seem to be getting the message. Your parliament recently passed legislation to ensure that immigration would never reach a level that would threaten Danish national identity. What do you make of this?

    IT: We have a very divided society here as well, even without considering the waves of immigration that have recently settled here. 

    Half of the population wants open borders, mass immigration and welfare for all. They reject traditional values and are very much in favor of globalism and multiculturalism. The other half is very much opposed to that, but they lack any persuasive arguments to support that position. All they can do is to forbid immigration, forbid women from wearing a head cloth and so on. 

    We no longer have a moral compass. Before, Christianity provided this role, keeping us united over centuries. Now we can no longer distinguish between good and evil, and ultimately this is what this struggle comes down to. Without this any preventive measures like this are just quick fixes that will not solve anything over the longer term. What is needed is a positive alternative in a moral sense. 

    ET: Is there any data or independent studies on the benefits and costs of immigration in Denmark? In Sweden for instance this topic is almost taboo, but there are many concerns in terms of finding good employment opportunities for immigrants, coming from the immigrants themselves in fact.

    IT: With this new culture we have adopted in the West we stopped having enough children to support our welfare state. So yes, one argument is that we need more people to support it. 

    In our own very secular society the state is God. It is supposed to provide and care for everybody. So the economic arguments become less relevant. Of course they are consideration since people are paying for these policies, but in a sense they are secondary.

    ET: We are at the cusp of an automation wave that threatens to displace millions of workers across the developed world. This will raise even more concerns regarding mass immigration, which traditionally consists of lower skilled workers. Is there any discussion in Denmark about this?

    IT: No. The only discussion is around the cultural aspect, namely the impact on our values and traditions. 

    And in a sense this just shows how weak we are. For instance, there are only 250,000 Muslims in Denmark, so a tiny minority. And yet the majority of our political debates focusing on culture over the last ten years have largely revolved around Islam. That’s how weak our culture has become.

    So while as an open society there is resistance to women having to cover themselves up, having separate swimming pools for men and women and so forth, we have lost the argument to combat these imported traditions largely because we have lost our Christian roots and values. So over time they will become more prevalent in our society. We are already seeing it.

    ET: Secular Muslims may also lose out a result. Many cherish Western values but will increasingly find a native society that is at odds with them, as their own communities become more extremist. Many complain that the Islam in Denmark and other European countries is more hardcore or even radical than in their home countries.

    IT: That is true. And again that is largely a result of this cultural hesitation in the societies that host them. As a result, those more aggressive forms gain more ground to the detriment of everyone, especially women. 

    ET: Much of the developing world faces a difficult situation and undoubtedly the countries that can help should. Let’s face it, faulty Western foreign policies have made bad situations even worse across much of the Middle East, although other very important sectarian and ethnic conflicts play a large role as well. 

    There are those who suggest that instead of opening the borders this help should be provided at the origin, which would be cheaper and thus could help many more people, would place refugees closer to their homes and avoid many of the social problems we are unfortunately seeing across Europe – caused by a minority to be sure, but still very problematic. What do Danish politicians think about this?

    IT: That would be logical in many ways, but again the debate is not economical. People want to be perceived as doing good, meaning opening their communities, welcoming and caring for others. 

    I would be in favor of that if we were talking about women and their children, even families. But the reality is different. The majority of people we have welcomed in recent years, especially following the migrant crisis, are fit young men. They bring their conflicts and their frustrations with them, creating a difficult environment for everyone. 

    So yes, arguably it would be more efficient to provide care at the source but this is not how the debate is framed.

    ET: Denmark is supposedly the happiest country on the planet. But you have little reason to be happy these days as you find yourself on the receiving end of government censorship, not only for expressing your concerns about the future of your country but also for working for a Russian news outlet. What happened here? You recently wrote a powerful piece about this, expressing your feelings not only as a woman who does not toe the party line but especially as a Christian. 

    IT: In 2015 I wrote an article criticizing our politicians who for the most part hate Christianity but nevertheless use Christian values, especially charity and compassion, to promote their own agendas, in particular mass immigration. So I called them out on that.

    A few months later I got a call from a politician here who told me that I was on a government blacklist, supposedly acting as a pro-Russian propagandist agent, despite having absolutely no evidence to that effect. I occasionally work for a Russian news outlet, but that’s simply my job as a journalist. 

    Today, in a society where supposedly there is freedom of speech, if politicians want to silence their critics they simply accuse them of working for the Kremlin, or having some unexplained ties with Russia. That is what happened to me, and it also happening to high profile politicians and journalists in the US, France and Germany. If you don’t agree with the multicultural policies of Europe then you are labeled a Russian agent. Which is really a form of political or character assassination. 

    They are so afraid of the rise of what leftist politicians in Europe call “populism”, which threaten the existence of their beloved European Union. And this year the stakes are very high with elections in France and Germany. So they resort to these kinds of tactics to quash any dissenters. 

    So I find myself in a blacklist in a supposedly free country like Denmark, but if a conflict with Russia emerges I can end up in prison under the pretext of being a foreign agent. Again, with no proof and no judicial process. This is very much how totalitarian societies operate. First they put you on a list, then when there is a problem or a made-up reason they will come for you.

    ET: You were only expressing views that are consistent with those of many conservatives on both sides of the Atlantic. There are certainly many people concerned about the future of Western societies. In many ways this evokes memories of the Soviet Union, and the great new society they tried to create, with the disastrous consequences we all know.

    That is actually a very real and concerning comparison. After all, communism was a Western idea and it was imposed on Russia, they did not create it. And it did not die with the collapse of the Soviet Union. On the contrary, it is still very much alive and roaming around our continent. While it operates differently, the goals are not too dissimilar. The version we have spreading across the West is Cultural Marxism.

    We no longer have families, religion, even genders. In Sweden now they have invented a gender neutral term to address little boys and girls at kindergarten. This is a complete change from traditional Western values that have kept Europe safe from outside invasion for centuries. And this is now gone. 

    All this talk of multiculturalism and open borders sounds very nice, but in practice it has led to a progressive transformation of our societies, and as Sweden shows not for the better. Less freedoms, less safety, less cohesion; more crime, more fragmentation, more social problems. It really is a struggle of good versus evil, and we in the West can no longer distinguish between the two. I would even call it diabolical disorientation. 

    ET: So how long you think before the Christian cross is removed from your flag? And how does the Danish monarchy, which is sworn to protect Danish culture and religion, feel about all of this?

    IT: No European politician will stand up for Christianity. Nobody. Expect from perhaps Hungarian Prime Minister, Victor Orbán. 

    There is this unholy alliance between the left and radical Islam. Many Europeans have such a disdain for their own traditions that they would prefer to see Christianity being eradicated even if it might cost their way of life and even personal freedoms in the end. 

    We have this bizarre situation where Western feminists support women having to wear a head cloth, along with foregoing many of the rights they should be able to enjoy in our countries. And these women often get penalized by their own communities when they try to assimilate into our society, while the feminists stay quiet. It is all very multicultural and good.

    ET: You know Russia well as part of your work. Can you contrast what is happening there relative to the transformation taking place across much of Western Europe?

    Believe it or not, we have swapped lanes. Now it is Russia who is adopting Christianity as the West gets rid of it by any means possible. 

    Christianity runs very deep in Russia: in their literature, in their arts, in their culture. When the Soviets brutally tried to suppress it, at the cost of countless lives, it survived underground. People still celebrated it in secrecy, performing baptisms and the like behind closed doors. 

    President Putin recently inaugurated an enormous statue of St. Vladimir, the patron saint of the Russian Orthodox Church, about 100 yards from the Kremlin walls. If you stand at a certain point across the street from the Kremlin, the cross that he bears is even taller than the star in the Red Square, so the symbolism is very potent. 

    In the West, as we discussed, we are going the other way. We can’t discard our values and heritage fast enough. 

    ET: There was a 2014 Russian movie, Leviathan, which alluded to this transformation. However it put Orthodox Christianity in a less positive light, essentially being used as an ideological argument to justify the power of the oligarchs in society. President Putin is certainly no saint. Isn’t this all just superficial?

    IT: There are people in Russia who are also opposed to their own traditional values and who want a more Westernized Russia. I have not seen that movie so I can’t say if the director supports that view or not. 

    People need to go to Russia and see it for themselves. President Putin is only responding to what is happening there and he respects the Russian people’s faith in Orthodoxy.

    This is one of the reasons why I believe the West hate the Russians so much. They cannot tolerate the thought of having a resurgent and powerful Christian Russia who openly rejects their Cultural Marxism. And accordingly they demonized it in much of our media and political circles.

    ET: So, is Denmark on the brink? Indeed, is the rest of Europe on the brink?

    IT: Yes, Denmark is on the brink. And Europe is on the brink. We completely lost our culture, our values and our moral compass. What used to be good is now evil and vice-versa. 

    You mentioned Denmark being the happiest country in the world but I am not sure that is true. We have high alcohol consumption and about half a million people on happy pills for a reason. 

    Channel 1, our main TV channel here, recently aired a documentary on three Danish girls who converted to Islam out of their own will, not because they got married or anything like that. They all had the same background, coming from broken homes, dealing with alcoholism and so forth – basically part of the legacy of the 1968 revolution we had across Europe. What these girls lacked was structure, and they found it in Islam because it regulates all aspects of your life: how you dress, what you eat, with whom you can socialize with, how to pray, how to interact as a wife and so on. 

    That is what the right-wing parties in Europe don’t understand. This is a spiritual battle. There is no political freedom without spiritual freedom. If you go around just forbidding things, like don’t wear the head cloth and so forth, it will not work. Our civilization will gradually disappear.

    The only thing that can save Europe right now is a true spiritual, dare I say Christian, revival across the Continent. This played a significant role in the demise of communism in the Soviet Union and East Germany. The churches there provided hidden venues for people to congregate, express ideas and share their faith and hardships.

    Since its inception Christianity was always about fighting evil with love, prayer and faith because these three are the key to freedom. And these are the values that the radical left and radical Islam do not tolerate, because of course both demand total obedience to the state and their conception of God, respectively. 

    ET: Thank you so much for sharing your thoughts and your courage. You deserve to be in the cover of a magazine, not on some government blacklist. Wish you all the best.

    IT: Thank you.

  • Signs That The Silicon Valley Tech Bubble Is About To Burst

    18 months ago there was a seemingly limitless number of Silicon Valley future billionaires buying up multi-million dollar homes and renting out lavish pads.  But if demand for excessively priced real estate is any indication of the health of Silicon Valley’s tech industry then all the venture capitalists who have tripped over themselves to invest in the next ‘decacorn’, or startups worth $10s of billions pre-IPO despite burning billions of cash quarterly, should be getting pretty worried right about now.

    As the following chart from Zillow points out, home prices in San Francisco stalled about a year ago and rents have followed a similar path.

    San Fran

     

    But home prices aren’t the only thing stalling, according to a note from The Guardian, resumes are also starting to flood into Silicon Valley headhunters from recently unemployed software engineers who were let go after their companies failed to attract its required latest round of financing at a ridiculous valuation.

    “We’re starting to get a lot of résumés from [software engineers at] companies where the business model isn’t working and they can’t get funding, so they are closing down or cutting back,” said Mark Dinan, a software recruiter based in the Bay Area, who keeps track of companies’ hirings and firings.

     

    These startups are running out of money because VCs are being more discerning about where they place their money, making fewer, bigger bets.

     

    “The number of investments [in the private market] has fallen by about a third, but the amount of capital is around the same,” said Tomasz Tunguz, a venture capitalist at Redpoint, adding that some of the “fast money” from hedge funds and mutual funds had shifted away from the sector.

     

    “It’s been happening for a couple of years. It’s not as easy to raise capital and VCs are demanding better terms,” added Aswath Damodaran, a professor of finance at the Stern School of Business.

    Despite the meteoric rise in the stock market over the past several years, venture capitalists have been forced to pull back on new investments partly because of a slowdown in companies going public. Last year was the slowest for US IPOs since the recession, with the amount raised by technology companies falling 60% from 2015.

    Tech IPOs

     

    Meanwhile, if SNAP’s IPO is any indicator of how other potential tech IPOs might be expected to perform, then we wouldn’t hold out hope for public investors to save the venture market from their valuation sins.

    SNAP

     

    But, a series of “down rounds” – when a company raises funds by selling shares that are valued lower than the last time they raised funds, leading its overall valuation to fall – may imply that there just isn’t a healthy backlog of companies that are IPO-worthy. CB Insights has tracked more than 100 of these down rounds and exits since 2015, including software company Zenefits, mobile app Foursquare and online music streaming service Rdio.

    “It used to be that 95% of [investment] rounds were up, now 20% are down,” Tunguz said.

     

    Then there are the so-called “decacorns” – unicorn startups valued at tens of billions of dollars – such as Airbnb, Uber and Palantir – which some believe are overvalued, but it’s hard to tell until they go public and are forced to reveal details of their underlying finances.

     

    Ride-sharing app Uber, for example, has raised more than $16bn and is valued at more than $69bn. That’s more than automotive giants such as General Motors and Ford, despite the company losing $2.2bn last year.

     

    “The interesting question with Uber is how long they can keep as a private company. They are raising capital like a public company without any of the disclosure and consequences of being a public company,” said Damodaran, who believes the company’s value is overinflated and it’s really worth $23bn.

    So, how does this moment compare with the time leading up to the dotcom crash?  Here is the take of one Silicon Valley software recruiter:

    “I got here in 97 and it was like it is now – incredibly packed, impossible to commute, high apartment costs,” Dinan said.

     

    “We’re seeing overvalued companies, funded based on hopes and dreams and aspirations and not good business models. Companies counting users and eyeballs rather than profits. There are a lot of similarities.”

     

    Another echo of the dotcom era is what Dinan calls “bad habits” such as the allegations of sexual harassment at Uber and human resources startup Zenefits cheating on mandatory compliance training.

     

    “There was a lot of crazy behaviour in the late 1990s, including sexual harassment. It’s a result of there not being discipline,” Dinan said.

     

    “The [dotcom crash] happened very suddenly and without any warning,” Damodaran said. “When it does happen everyone says they saw it coming. If you saw it coming then why didn’t you get out of it?”

    Well, when all else fails there’s always the ‘negging’ option to drive valuation…

  • What The New CIA Leaks Tell Us About The US Government

    Authored by Alice Salles via TheAntiMedia.org,

    “The greatest danger to the State is independent intellectual criticism.” – Murray Rothbard

    WikiLeaks may have finally done what many small and anti-government advocates have only dreamed of. They exposed the Central Intelligence Agency (CIA) for what it is: a bloated government bureaucracy that has grown much too large to be restrained.

    According to the document dump released by Julian Assange’s whistleblower hub, this list of highly confidential information regarding the CIA emerged from the agency’s Center For Cyber Intelligence in Langley, revealing details on the agency’s “global covert hacking program.”

    The CIA’s hacking effort has been so powerful and effective, the leaks show, that it includes the weaponization of exploits used against products such as the iPhone, Android phones, Samsung TVs, and Microsoft Windows. This means any of these devices can be used as spying mechanisms at any given time.

    But perhaps most troubling is the revelation that the CIA lost control of the majority of its hacking arsenal over time. That includes viruses, malware, trojans, malware remote control systems, and the previously mentioned weaponized exploits. In so many words, this means the U.S. government has handed over the key to the most intimate secrets of every single one of us to anyone with access to these lost tools. By allowing the CIA to grow so absolutely powerful, we also allowed the agency to be absolutely careless with our own lives.

    What have we learned from this? That regardless of how detached we may seem from politics, its influence and power grows as we refrain from restricting it — even if most of those involved aren’t quite aware of the mechanisms that allow for this expansion.

    The Government Is The Ultimate Monopoly And That’s Why The CIA Is So Powerful

    As Austrian economist Murray Rothbard wrote in his pivotal essay, “Anatomy of the State,” the government is entirely wired to be “that organization in society which attempts to maintain a monopoly of the use of force and violence in a given territorial area.” This is not because there’s a conspiracy to ensure every subject lives solely to serve the state, but because government has no moral legitimacy.

    In other words, government is only powerful because we, the individuals, have allowed it to have sole guardianship over our property — including self-ownership — and freedoms.

    Once government has total control over every basic aspect of our lives, those within government see no boundaries. Why? Because the burden of self-censorship or even personal responsibility doesn’t lie with the individual any longer. Once the government employee crosses over, stepping into a world where he’s protected by an invisible authority, he is no longer a person who is led by the same morals that guided him before he assumed this position — he’s now a bureaucrat. And as such, he now knows he will no longer have to be accountable for his actions.

    What does that have to do with the latest revelations on the CIA? When a lack of personal responsibility meets the always ravaging needs of the monopolistic State, the individual loses any sovereignty he has over his own life. The government worker becomes a thirsty member of the State, always looking for ways to undermine freedom while the so-called private individual becomes just another government enabler under its control.

    The CIA has been careless with the tools it uses to spy on all of us, and whether or not we are guilty of committing crimes, it is clear that it has been equally careless with what it’s extracted from us over the years. This invites abuse from inside, which is what we saw happening within the National Security Agency (NSA) after Edward Snowden revealed the massive spying program sweeping our personal data (while also giving malicious elements outside of the CIA the same access to our personal communications).

    We only have ourselves to blame for how out of control the CIA has become, and that’s because we have forgotten — or perhaps never known — that the government’s monopoly over our lives is granted, not warranted. Will the CIA leaks be the straw that broke the camel’s back?

    Somehow, I highly doubt it.

  • Trump Wins: G-20 Drops 'Anti-Protectionist, Free-Trade, & Climate-Change Funding' Pledge

    After delays and hours of discussions amid tensions over 'trade' comments between the United States and the rest of The G-20, it appears President Trump has 'won'. While China was "adamantly against" protectionism, the finance ministers end talks without renewing their long-standing commitment to free trade and rejection of protectionism after US opposition.

    The world's financial leaders are unlikely to endorse free trade and reject protectionism in their communique on Saturday because they have been unable to find a wording that would suit a more protectionist United States, G20 officials said.

    This would break with a decade-old tradition among the finance ministers and central bankers of the world's 20 top economies (G20), who over the years have repeatedly rejected protectionism and endorsed free trade.

    But the new administration in the United States is considering trade measures to curb imports with a border tax and would not agree to repeat the formulations used by previous G20 communiques, clashing with China and Europe, the officials said.

    "Unless there is a last minute miracle, there is no agreement on trade," one official, who declined to be named, told Reuters.  "This is not a good outcome of the meeting," a G20 delegate quoted Bundesbank President Jens Weidmann as saying.

    In a partial face-saving move, as The FT details, G20 finance ministers meeting in the German resort town of Baden-Baden noted the importance of trade to the global economy, but dropped tougher language from last year that vowed to “resist all forms of protectionism”.

    The new communique said: “We are working to strengthen the contribution of trade to our economies. We will strive to reduce excessive global imbalances, promote greater inclusiveness and fairness and reduce inequality in our pursuit of economic growth.”

     

    The watered-down commitments on free trade reflected the anti-globalisation mood that Donald Trump has brought to Washington and came in the first G20 meetings between Steven Mnuchin, the new US Treasury Secretary, and his foreign counterparts.

    US Treasury Secretary Mnuchin spoke to reporters after the meeting:

    • *MNUCHIN: LOOKING FORWARD TO WORKING CLOSELY W/ G-20 COLLEAGUES
    • *MNUCHIN: CONFIDENT U.S. CAN WORK CONSTRUCTIVELY WITH PARTNERS
    • *MNUCHIN: U.S. BELIEVES IN FREE, BALANCED TRADE
    • *MNUCHIN SAYS WILL LOOK AT TRADE SURPLUSES WITH VIEW TO CORRECT
    • *MNUCHIN SAYS MULTILATERAL AGREEMENTS HAVE VERY IMPORTANT PLACE
    • *MNUCHIN SAYS U.S. WANTS TO RE-EXAMINE TRADE DEALS INCL. NAFTA
    • *MNUCHIN: U.S. BELIEVES IN APPROPRIATE REGULATION
    • *MNUCHIN SAYS IMPORTANT BANKS CAN PROVIDE LIQUIDITY IN MARKETS

    Reuters also points out another potential win for Trump as the communique will also drop a reference, used by the G20 last year, on the readiness to finance climate change as agreed in Paris in 2015 because of opposition from the United States and Saudi Arabia.

    Trump has called global warming a "hoax" concocted by China to hurt U.S. industry and vowed to scrap the Paris climate accord aimed at curbing greenhouse gas emissions.

     

    Trump's administration on Thursday proposed a 31 percent cut to the Environmental Protection Agency's budget as the White House seeks to eliminate climate change programs and trim initiatives to protect air and water quality.

     

    Asked about climate change funding, Mick Mulvaney, Trump's budget director, said on Thursday, "We consider that to be a waste of money."

    The G20 do agree, however, to show continuity in their foreign exchange policies, using phrases from the past on foreign exchange markets.

    As we noted earlier, needless to say, such an acrimonous end to the weekend's summit would likely result in a surge in FX volatility when markets open for trading late on Sunday, reflecting the new state of global trade flux, in which the future of the US Dollar is completely unknown, and reflecting the emerging chaos over the future parameters of trade.
     

  • House Democrat Warns Nuclear War With Russia "Real Possibility"

    Having failed to find any evidence that Russia interefered with the election, it seems Democrats are resorting to the 1980s playbook as Rep. Seth Moulton – a member of the House Armeed Service Committee – tells CNN that a nuclear war with Russia is a real possibility the U.S. should prepare for.

    As The Hill reports, Moulton said Friday on CNN's "New Day".

    For a long time, Russia and the United States had this sort of mutual agreement, mutually assured destruction,

     

    “If they shot their weapons at us, we’d shoot our weapons at them, and therefore a nuclear war was unlikely to happen. But what Russia now says is that they will quote, 'escalate to deescalate'."

    If that didn't have you searching for fallout shelters already, Moulton goes to explain that US military forces are unprepared… though offers no facts to back that up.

    "They are willing to use nuclear weapons to deescalate a conventional attack. I think that the problem here is that we don’t really have a plan to deal with that."

     

    //platform.twitter.com/widgets.js

    Moulton said he can imagine scenarios where the Trump administration must respond to Russian use of nuclear weapons.

    "If Russia starts using nukes against our allies in Europe, we may well use nukes in retaliation,” said Moulton, a member of the House Armed Services Committee.

     

    “What if they target American troops — like the American troops who are training right now in Poland — with a nuclear attack?” he asked.

     

    "What are we going to do and how quickly can that get out of control? That is why this is such a serious threat and why the Trump administration has got to take this more seriously.

    Which seems odd because the only possible reaction to such an event would be nuclear retaliation and the 'mutually assured destruction' which he seems to believe is no longer vald. Either way, we are fairly certain that not since The Bay of Pigs has the word 'nuclear' been so relevant.

  • CNN: President Trump "Has Spent His Whole Life Bullshitting"

    With the "Russians are to blame" narrative fading – due to lack of any evidence – it appears CNN has turned back to ad hominem attack 'reporting' on the Trump administration.

    "CNN Tonight" network host Fareed Zakaria proclaimed magnanimously that President Donald Trump has succeeded only by "bullshitting."

    “I think the president is somewhat indifferent to things that are true or false. He has spent his whole life bullshitting. He has succeeded by bullshitting. He has gotten the presidency by bullshitting. It’s very hard to tell somebody at that point that bullshit doesn’t work because look at results. Right?

     

    But that’s what he does. He sees something he doesn’t particularly care if it’s true or not. Just puts it out there and then he puts something else out. Notice again at the press conference, when pushed on it, does take responsibility. ‘I wasn’t saying that just quoting somebody else.’

     

    When you have the White House press secretary quote somebody to prove a point, you’re endorsing that view.”

    It appears Zakaria has not been paying attention to the constant stream of lies, hypocrisy, and narrative-confirming half-truths that his network and most of America's politicians have been spewing for what seems like years now? It's different this time though.

  • Russian Parliament Launches Investigation Of "CNN And Other American Media"

    A few days ago Jeanne Shaheen, a Democratic Senator from New Hampshire, introduced a piece of legislation that would give the Department of Justice “new authority” to investigate potential violations of the Foreign Agents Registration Act by the ‘Russian Times’.  Among other things, Shaheen said the legislation was necessary to determine whether “RT News is coordinating with the Russian government to spread misinformation and undermine our democratic process.”  We won’t even bother to touch on the inherent hypocrisy of such a statement, but here is the press release from Shaheen’s website:

    Following intelligence reports that RT News operates as a propaganda outlet for the Russian government, U.S. Senator Jeanne Shaheen (D-NH) has introduced legislation that gives the Department of Justice new authority to investigate potential violations of the Foreign Agents Registration Act by RT America.

     

    “We have good reason to believe that RT News is coordinating with the Russian government to spread misinformation and undermine our democratic process,” said Shaheen. “The American public has a right to know if this is the case. RT News has made public statements boasting that it can dodge our laws with shell corporations, and it’s time for the Department of Justice to investigate. My bill provides the authority needed to request documentation of RT News and find out who they’re accountable to.”

     

    The Director of National Intelligence’s recent report titled Assessing Russian Activities and Intentions in Recent US Elections concluded that RT News officials have structured their affiliate organizations to deliberately circumvent U.S. reporting and disclosure requirements under the Foreign Agents Registration Act.  Senator Shaheen’s Foreign Agents Registration Modernization and Enforcement Act gives the Department of Justice new authority to compel organizations like RT America to produce documentation on funding sources and foreign connections.

    Well, as it turns out, Russian officials have the power to launch meaningless witch hunts in their country as well and have decided to demonstrate that power with the announcement today that they’ll launch a similar investigation into all U.S. media currently operating in Russia.  Per Reuters:

    The Russian lower house of parliament, the State Duma, has approved a proposal to launch an investigation into U.S. media organizations that operate in Russia, it said in a statement posted on its web site late on Friday.

     

    The investigation, which will be conducted by the Duma’s information policy, technologies and communications committee, will check whether CNN, the Voice of America, Radio Liberty and “other American media” are complying with Russian law.

     

    Deputy Konstantin Zatulin, who initiated the move, calls it “a response to the actions of American politicians who have systematically accused Russian news media of interference in U.S. internal affairs,” according to the Friday statement.

    Putin

     

    Shaheen’s legislation, of course, drew wide criticism from Russian agencies including the Russian Foreign Ministry whose spokesperson mocked the bill saying it should have included a clause defining a list of books that should be collected for burning.

    The statement said the Duma backed the move on Friday evening after Konstantin Zatulin, an MP from the pro-Kremlin United Russia party, proposed an investigation to retaliate for what he called a “repressive” U.S. move against Russian state-funded broadcaster RT.

     

    He said he was referring to an initiative by U.S. Senator Jeanne Shaheen, who has introduced a bill to empower the Justice Department to investigate possible violations of the Foreign Agents Registration Act by RT.

     

    Foreign media in Russia are overseen by the Russian Foreign Ministry, whose spokeswoman Maria Zakharova this week singled out Shaheen’s demarche for criticism, quipping ironically that the senator should have included a clause drawing up a list of books for burning.

     

    The U.S. move also solicited the ire of Margarita Simonyan, RT’s editor-in-chief, who on Wednesday told the daily Izvestia it had echoes of the activities of U.S. Senator Joseph McCarthy, who oversaw a campaign to expose people he regarded as communists in the 1950s.

    Meanwhile, all of this comes even as top Democrats admitted on Friday that their investigation into Trump’s campaign was unlikely to yield any evidence of collusion with Russia (see “The Democrats’ Trump-Russia Conspiracy Campaign Collapses“).  Of course, not many politicians are willing to let facts get in the way of a good narrative.

  • Caught On Video: Hillary Clinton Warns She's "Ready To Come Out Of The Woods"

    After months of crying in bed and moping around the woods of Chappaqua sulking over her shocking loss last November, Hillary Clinton told “The Society of Irish Women” at a St. Patrick’s Day speech in Scranton, Pennsylvania on Friday night that she’s finally ready to “come out of the woods.”  And while that comment could be interpreted in a whole bunch of different ways, we’re going to take the high road and assume that it’s simply a hint that she’s ready to return to public life in some capacity.

    “Our country seems so divided right now. I do not believe that we can let political divides harden into personal divides.  And we can’t just ignore or turn a cold shoulder toward someone because they disagree with us politically.”

     

    “We’ve gotta keep trying to listen to each other, to reason together and try to work to help people have better lives.”

     

    “I’m like a lot of my friends right now. I have a hard time watching the news, I’ll confess.  I am ready to come out of
    the woods and to help shine a light on what is already happening around
    kitchen tables, at dinners like this.”

    Unfortunately, while Hillary is all too willing to encourage the rest of us to “listen to each other”, she’s apparently not yet ready to listen to the advice of the 60+ million people around the country who decided they would prefer she not be an active participant in public life any longer.

     

    Of course, these latest comments will inevitably spark rumors, once again, of Hillary possibly throwing her hat in the ring for the New York City Mayoral race.  As we pointed out a couple of months ago, while polls show that Mayor De Blasio will win in a blowout against most candidates, he would almost certainly lose in a landslide to Hillary…

    The latest example comes from a Quinnipiac University Poll which analyzed a hypothetical head-to-head match-up between Clinton and New York’s current mayor, Bill de Blasio.  Unfortunately for de Blasio, the poll found that, while he would beat almost everyone else whose name has been mentioned as potential contender, he would almost certainly be crushed by Hillary. 

    In a very hypothetical race for New York City Mayor, Hillary Clinton, running as an independent, tops incumbent Bill de Blasio, running as a Democrat, 49 – 30 percent, according to a Quinnipiac University poll released today.

     

    “New Yorkers aren’t in love with Mayor Bill de Blasio, but they seem to like him better than other possible choices – except Hillary Clinton, who probably is an impossible choice,” said Tim Malloy, assistant director of the Quinnipiac University Poll.

     

    “None of the possible contenders has made any real noise or spent any money, so this race still could get interesting.”

     

    In the Clinton – de Blasio matchup, Clinton leads 61 – 29 percent among Democrats and 45 – 31 percent among independent voters. Republicans back de Blasio 28 – 18 percent. She leads among men and women and black, white and Hispanic voters. She also leads in every borough except Staten Island, which goes to de Blasio 28 – 22 percent.

    And here is a full break down of the results:

    Hillary Poll

     

    …that is, unless that nagging case of “pneumonia
    that brings with it random, yet inevitable, bouts of full-body paralysis, rears its ugly head again.

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