• 20 Amazing Things That Happen Every Single Minute Of Every Single Day In Our Rapidly Changing World

  Authored by Michael Snyder via The End of The American Dream blog,

  Our world is changing at a blinding pace that is accelerating with each passing day. 

  

  Thanks to the Internet, information travels at a speed that would have been unimaginable at other times in human history, and our technological capabilities are advancing at a rate that is exponentially increasing.  What all of this means is that seismic cultural shifts that used to take decades can now be accomplished in a matter of months or even weeks. 

  The following are 20 amazing facts about what happens every single minute of every single day in our rapidly changing world… 

  #1 250 babies will be born, and 113 of them will be born into poverty.

  #2 500 hours of video will be uploaded to YouTube.

  #3 The Earth will travel 1,118 miles around the sun.

  #4 McDonald’s will sell 4,500 hamburgers.

  #5 Lightning will strike our planet about 6,000 times .

  #6 28,500 trees will be cut down.

  #7 51,000 applications will be downloaded from Apple’s App Store.

  #8 65,000 barrels of oil will be used used.

  #9 People will watch 64,444 hours of content on Netflix.

  #10 120,673 pounds of edible food will be thrown away in the United States.

  #11 $203,596 worth of products will be sold on Amazon.com.

  #12 448,800 tweets will be posted on Twitter.

  #13 527,760 photos will be shared on Snapchat.

  #14 3.3 million posts will be made to Facebook.

  #15 3.8 million Google searches will be conducted.

  #16 5 million pounds of garbage will be generated.

  #17 6 million chemical reactions will happen in each one of our cells.

  #18 20.8 million messages will be sent using WhatsApp.

  #19 25 million Coca-Cola products will be consumed.

  #20 204 million emails will be sent.

  So will all of this change lead to a wonderfully positive future for humanity, or will it result in a dystopian nightmare?  Only time will tell, but what everyone can agree on is that our world is rapidly becoming a much different place than the world that our parents and grandparents grew up in.

  

  

• Doug Casey On Why Gold Is Money

  Authored by Doug Casey via InternationalMan.com,

  

  It’s an unfortunate historical anomaly that people think about the paper in their wallets as money. The dollar is, technically, a currency. A currency is a government substitute for money. But gold is money.

  Now, why do I say that?

  Historically, many things have been used as money. Cattle have been used as money in many societies, including Roman society. That’s where we get the word “pecuniary” from: the Latin word for a single head of cattle is pecus. Salt has been used as money, also in ancient Rome, and that’s where the word “salary” comes from; the Latin for salt is sal (or salis). The North American Indians used seashells. Cigarettes were used during WWII. So, money is simply a medium of exchange and a store of value.

  By that definition, almost anything could be used as money, but obviously, some things work better than others; it’s hard to exchange things people don’t want, and some things don’t store value well. Over thousands of years, the precious metals have emerged as the best form of money. Gold and silver both, though primarily gold.

  There’s nothing magical about gold. It’s just uniquely well suited among the 98 naturally occurring elements for use as money…in the same way aluminum is good for airplanes or uranium is good for nuclear power.

  There are very good reasons for this, and they are not new reasons. Aristotle defined five reasons why gold is money in the 4th century BCE (which may only have been the first time it was put down on paper). Those five reasons are as valid today as they were then.

  When I give a speech, I often offer a prize to the audience member who can tell me the five classical reasons gold is the best money. Quickly now—what are they? Can’t recall them? Read on, and this time, burn them into your memory.

  Money

  If you can’t define a word precisely, clearly, and quickly, that’s proof you don’t understand what you’re talking about as well as you might. The proper definition of money is as something that functions as a store of value and a medium of exchange.

  Government fiat currencies can, and currently do, function as money. But they are far from ideal. What, then, are the characteristics of a good money? Aristotle listed them in the 4th century BCE. A good money must be all of the following:

  • Durable: A good money shouldn’t fall apart in your pocket nor evaporate when you aren’t looking. It should be indestructible. This is why we don’t use fruit for money. It can rot, be eaten by insects, and so on. It doesn’t last.

  • Divisible: A good money needs to be convertible into larger and smaller pieces without losing its value, to fit a transaction of any size. This is why we don’t use things like porcelain for money—half a Ming vase isn’t worth much.

  • Consistent: A good money is something that always looks the same, so that it’s easy to recognize, each piece identical to the next. This is why we don’t use things like oil paintings for money; each painting, even by the same artist, of the same size and composed of the same materials is unique. It’s also why we don’t use real estate as money. One piece is always different from another piece.

  • Convenient: A good money packs a lot of value into a small package and is highly portable. This is why we don’t use water for money, as essential as it is—just imagine how much you’d have to deliver to pay for a new house, not to mention all the problems you’d have with the escrow. It’s also why we don’t use other metals like lead, or even copper. The coins would have to be too huge to handle easily to be of sufficient value.

  • Intrinsically valuable: A good money is something many people want or can use. This is critical to money functioning as a means of exchange; even if I’m not a jeweler, I know that someone, somewhere wants gold and will take it in exchange for something else of value to me. This is why we don’t—or shouldn’t—use things like scraps of paper for money, no matter how impressive the inscriptions upon them might be.

  Actually, there’s a sixth reason Aristotle should have mentioned, but it wasn’t relevant in his age, because nobody would have thought of it…it can’t be created out of thin air.

  Not even the kings and emperors who clipped and diluted coins would have dared imagine that they could get away with trying to use something essentially worthless as money.

  These are the reasons why gold is the best money. It’s not a gold bug religion, nor a barbaric superstition. It’s simply common sense. Gold is particularly good for use as money, just as aluminum is particularly good for making aircraft, steel is good for the structures of buildings, uranium is good for fueling nuclear power plants, and paper is good for making books. Not money. If you try to make airplanes out of lead, or money out of paper, you’re in for a crash.

  That gold is money is simply the result of the market process, seeking optimum means of storing value and making exchanges.

  *  *  *

  Doug thinks the price of gold could hit $5,000 in the coming years. To help you take advantage of this rare opportunity, he’s sharing the specific method he’s used to make gains as large as 487%, 711%, and even 4,329% in previous gold bull markets. The “Casey Method” is unlike any other investing strategy. If used properly, it could make you HUGE gains over the next few years. Doug explains it all right here. You’ll also learn how to get instant access to a special report that names 9 gold stocks with huge upside. Each of these stocks could rise 100%, 200%, or more in the coming years. Click here to get started.

  

  

• No, the NSA Has NOT Stopped Spying On Americans’ Emails

  The NSA announced Friday that they would stop the controversial program which sweeps up all emails and text messages which an American exchanges with someone overseas that makes reference to a real target of NSA surveillance.

  By way of background, if Russia’s Putin was an NSA target, and an American received an email from a Russian saying “I hate Putin”, then that American could be surveilled by the NSA.

  Washington’s Blog asked Bill Binney what he thought of the NSA’s announcement.

  Binney is the NSA executive who created the agency’s mass surveillance program for digital information, who served as the senior technical director within the agency, who managed six thousand NSA employees, the 36-year NSA veteran widely regarded as a “legend” within the agency and the NSA’s best-ever analyst and code-breaker, who mapped out the Soviet command-and-control structure before anyone else knew how, and so predicted Soviet invasions before they happened (“in the 1970s, he decrypted the Soviet Union’s command system, which provided the US and its allies with real-time surveillance of all Soviet troop movements and Russian atomic weapons”).  Binney is the real McCoy.  Binney has been interviewed by virtually all of the mainstream media, including CBS, ABC, CNN, New York Times, USA Today, Fox News, PBS and many others.

  Specifically, we asked Binney:

  Do you buy it? https://www.yahoo.com/tech/us-nsa-spy-agency-halts-controversial-email-sweep-215107654.html 

  Or do you think they’re just collecting under a different authorization/program?

  Binney responded:

  Short answer, NO.

   

  This is a farce given the bulk continuous domestic data collection and storage from the Upstream programs: Fairview, Stormbrew and Blarney. [Here’s background on Fairview/Stormbrew/Blarney.]

   

  This FAA 702 [Section 702 of the Foreign Intelligence Surveillance Act] has been a charade from the beginning. [Specifically, the NSA is spying on all Americans under Executive Order 12333, and only talking about Section 702 to confuse people as to what they’re doing.]

   

  It was a way to make people/congress/judiciary think that they were trying to conform to the law.

  And, by spreading false information, which our useless MSM fail to challenge, it’s a way of subverting our republic – all done in secret with only a few people in the know of what really is going on.

   

  Meanwhile in the background, NSA through program “Muscular” was unilaterally tapping the fiber lines between Google and Yahoo and others data centers; so that when they backed up their data between centers, NSA got it all and the companies did not even know that was happening.

  Absolutely nothing has changed.

  

• Silver Takes the Elevator Down, Report 30 April, 2017

  Last week, we talked about the effect of the French election on the gold and silver markets, and noted:

  Of course, traders want to know how this will affect gold and silver. As we write this, we see that silver went down 30 cents before rallying back up to where it closed on Friday. Gold went down about $20, and then half way back up.

  At this point, we are not sure if the metals are supposed to go up because more printing. Or go down because the euro constrains France from printing. Or silver at least should go up because the economy is going to be better with France remaining in the Eurozone. Or go down because the ongoing malaise will only progress as it has been. Or some other logic… and the price gyrations this evening show that traders don’t agree either.

  It didn’t take too long. Here is what happened to silver this week. The graph below shows the price of silver in real money (i.e. gold).

  The Price of Silver in Real Money
  

  Silver has been falling for going on one year, but clearly since March 1. After one last hurrah at the end of March, it has been taking the elevator down. And by its fundamentals it should be quite a bit lower—0.0125.

  In any case, we are interested in watching what the fundamentals of the metals are doing. We will take a look at the graphs below, but first, the price and ratio charts.

  The Prices of Gold and Silver
  

  Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It had another major move up this week, after a major move up last week.

  Last week, we said:

  If prior peaks are an indication, there may be a spot of resistance at 72.5 (+0.8 above Friday’s close) and another at 73.25. If the ratio should go over these levels, then it may go all the way to its fundamental level (discussed below).

  Well, it broke those levels and ended the week just under 74.

  The Ratio of the Gold Price to the Silver Price
  

  For each metal, we will look at a graph of the basis and cobasis overlaid with the price of the dollar in terms of the respective metal. It will make it easier to provide brief commentary. The dollar will be represented in green, the basis in blue and cobasis in red.

  Here is the gold graph.

  The Gold Basis and Cobasis and the Dollar Price
  

  The scarcity (i.e. the cobasis, the red line) was on the rise this week. It makes sense, that as the price of gold drops (which is the mirror of what this graph shows, the price of the dollar in gold milligrams) the metal becomes scarcer. This means speculators are selling their paper. If owners of metal were selling, then the metal would not become scarcer and might even become more abundant.

  However, it only became a little scarcer while the price dropped almost twenty bucks. So our calculated fundamental price fell $15 to $1,274, a few bucks above the market price.

  Now let’s look at silver.

  The Silver Basis and Cobasis and the Dollar Price
  

  In silver, the price fell a lot. 72 cents. The cobasis rose (i.e. abundance dropped and scarcity increased).

  Last week, we asked:

  Some speculators definitely got flushed. However, the question is how many and how much?

  Clearly it happened to more of them this week. And, unless the fundamentals get stronger, it is likely to flush even more leveraged futures positions. Our calculated fundamental price fell three cents this week, now a buck thirty under the market.

  © 2017 Monetary Metals

  

• Congress Reaches Deal To Keep Government Open Through September

  Update: Senate Democratic Leader Chuck Schumer seems very positive on the bipartisan agreement too (but can’t resist a few jabs at President Trump)…

  “This agreement is a good agreement for the American people, and takes the threat of a government shutdown off the table.

   

  The Bill “ensures taxpayer dollars aren’t used to fund an ineffective border wall, excludes poison pill riders, and increases investments in programs that the middle-class relies on, like medical research, education, and infrastructure”

   

  “Early on in this debate, Democrats clearly laid out our principles..” and the deal “reflects those principles.”

  *  *  *

  As we detailed eariler, one of the biggest political overhangs facing the market may have just been removed, when moments ago AP and other newswires reported that House Democrats and Republicans are said to have reached a $1 trillion spending deal to keep the government – which is currently operating thanks to a last minute one-week stopgap measure enacted on Friday – open until October 1.

  BREAKING: Congressional Republicans, Democrats reach agreement on $1T measure to fund government until Oct. 1.

  — AP Politics (@AP_Politics) May 1, 2017

  //platform.twitter.com/widgets.js

  According to Washington Post, negotiators from both parties reached an agreement on a spending package to fund the government through the end of September, alleviating fears of a government shutdown later this week. Congress is expected to vote early this week on the package, with the bipartisan agreement expected to include increases for military spending and border security, a major priority for GOP leaders in Congress.

  The agreement follows weeks of tense negotiations between Democrats and GOP leaders after President Trump insisted that the deal include funds to begin construction of a wall along the U.S. border with Mexico. Trump eventually dropped that demand, leaving Congress to resolve lingering issues over several unrelated policy measures.

  There is a non-trivial chance the Sunday night announcement is merely a trial balloon, because as the WaPo adds “the details of the agreement were not yet clear on Sunday night” which would suggest that there is a high likelihood that whatever tentative deal was reached, ultimately falls through.

  For now, however, this is good news, and it has sent both the pound and yen sliding, and the dollar rising on hopes that politics will not be a major risk factor for at least 5 months.

  House Republicans have struggled in recent weeks to keep their members focused on spending as White House officials and conservatives pressed leaders to revive plans for a vote on health-care legislation. The health-care fight became tangled last week with the spending talks as leaders worried that forcing a vote to repeal the Affordable Care Act risked angering Democrats whose votes are necessary to avoid a government shutdown.

  Another possible threat is that the GOP pushes on with Obamacare repeal, a gambit which may prompt Democrats to withdraw any support they voiced for Sunday’s “deal.”

  GOP leaders worked last week to determine if there are enough votes in the House to pass a revised health-care bill brokered by the White House, the head of the conservative House Freedom Caucus and a top member of the moderate Tuesday Group. House Speaker Paul D. Ryan (R-Wis.) and his top lieutenants announced Thursday that they did not have sufficient votes to be sure the health-care bill would pass but vowed to press on.

   

  “We’re still educating members,” House Majority Leader Kevin McCarthy (R-Calif.) told reporters after a late-night health care meeting last week. “We’ve been making great progress. As soon as we have the votes, we’ll vote on it.”

  And now, in the spirit of trial balloons everywhere, we await the denial from yet other “unnamed sources.”

  

  

• North Korea Threatens To Sink "Doomed" US Nuclear Submarine

  North Korea threatened to sink a US nuclear sub currently deployed in South Korean waters if the US take provocative action, responding to a statement from Donald Trump that the president won’t be “happy” if Pyongyang conducts another nuclear test.

  

  After the US deployed a nuclear-powered submarine and an aircraft carrier to South Korean waters amid high Korean tensions, Yonhap reported that North Korea on Sunday threatened to sink the submarine, accusing America of stepping up military intimidation.

  “The moment the USS Michigan tries to budge even a little, it will be doomed to face the miserable fate of becoming a underwater ghost without being able to come to the surface,” the North’s propaganda website Uriminzokkiri wrote in a vivid article. North Korea’s nuclear deterrent will assure that American aircraft carriers, nuclear submarines, and other military hardware will be “shattered into pieces of molten metal” if they threaten Pyongyang, the article read.

  The North warned – once again using its dramatically vivid jingoist language – that “whether it’s a nuclear aircraft carrier or a nuclear submarine, they will be turned into a mass of scrap metal in front of our invincible military power centered on the self-defense nuclear deterrence.”

  “The urgent fielding of the nuclear submarine in the waters off the Korean Peninsula, timed to coincide with the deployment of the super aircraft carrier strike group, is intended to further intensify military threats toward our republic,” the website further claimed. According to the article, recent statements from the Trump administration indicate that Washington is close to implementing a strategic scenario in which an actual military confrontation is a real possibility.

  Earlier on Sunday, Donald Trump told CBS that he “will not be happy” if North Korea conducts another nuclear test. When asked to clarify, the US president said: “I would not be happy. If he (North Korean supreme leader, Kim Jong-un) does a nuclear test, I will not be happy.”

  “And I can tell you also, I don’t believe that the president of China, who is a very respected man, will be happy either,” Trump said, adding that he believes Xi Jinping was also “putting pressure” on North Korea to bring a halt to its nuclear tests.

  CBS host John Dickerson then directly asked Trump whether US military action was possible, the US president replied: “I don’t know. I mean, we’ll see.”

  The guided-missile submarine USS Michigan sailed into the South Korean port of Busan on April 25 before heading out to sea four days later. The Ohio-class submarine is reportedly conducting various drills. At the same time, the U.S. has also directed the nuclear-powered aircraft carrier USS Carl Vinson to the waters near South Korea. The supercarrier is currently engaged in a joint exercise with South Korean naval forces of the Korean peninsula.

  The threat followed North Korea’s failed missile launch. On early Saturday, North Korea fired off a ballistic missile which the South Korean military said exploded after flying only 71 kilometers. The launch marks the third missile test in April.

  Trump told CBS that the failed test wasn’t significant enough to warrant action against North Korea. “This was a small missile. This was not a big missile. This was not a nuclear test, which he was expected to do three days ago. We’ll see what happens,” the president said.

  Joint US-South Korean naval wargames, Foal Eagle, involving 20,000 Korean and nearly 10,000 American troops kicked off in the region on Sunday.

  Washington has said that the USS Carl Vinson aircraft carrier and USS Michigan nuclear sub will remain in the area due to the spike in tensions between Washington and Pyongyang.

  

  

• The Real WMD In Syria – The West's Weapon Of Mass Disorientation

  Authored by Finian Cunningham via The Strategic Culture Foundation,

  

  A senior Rand analyst, inadvertently, gave the game away in a recent article inculpating Syrian President Bashar al Assad over the alleged toxic massacre of civilians on April 4. The Rand Corporation, a longtime conduit for CIA propaganda, wrote: «The use of chemical weapons today provokes international condemnation… Those who order their deployment risk being charged with war crimes».

  The Western objective, as tacitly admitted above, is therefore to brand the Syrian leader and his government as depraved war criminals, deserving pariah status and excommunication by the «international community».

  The alleged use of chemical weapons, a particularly odious weapon of mass destruction (WMD), serves as an effective prop to channel Western public outrage against Assad. Allegedly killing civilians with bullets and bombs just doesn’t have the same psychological power to incite public disgust. Poisoning little children with lethal chemicals is a more effective label with which to demonize the alleged perpetrator.

  But the more pertinent WMD issue here is Weapon of Mass Disorientation. And in particular how Western governments, their servile corporate-controlled media, like the Rand Corp, New York Times, CNN, BBC, Guardian and France 24, and so on, and local proxy mercenaries inside Syria are covertly deploying deadly chemicals in a series of propaganda stunts. Not only deploying deadly chemicals against civilians in a most cynical and callous way, but getting away with their crimes of murder through an audacious distortion of reality. All made possible because of the West’s media weapon of mass disorientation.

  By massive manipulation of facts and images, the Western public are disorientated to condone the wider criminal agenda that their governments are pushing – that of regime change. Part of that disorientation involves the Western public suspending critical thinking over what are otherwise highly dubious circumstances and claims; it also involves an abject manipulation of perception and emotions, whereby some victims of violence are the focus for Western public trauma, while many other victims in Syria and elsewhere are unseen or overlooked with callous indifference. Those anomalies surely speak of a phenomenal disorientation of Western public intelligence, emotion and morals.

  Immediately following the incident in the militant-held Syrian town of Khan Sheikhoun, in northern Idlib Province, on April 4, Western governments and the corporate news media began accusing the Syrian leader of responsibility for a «chemical weapon attack». The US ambassador the UN Nikki Haley made a dramatic presentation at the Security Council on April 5, holding aloft enlarged photos purportedly of children dying from toxic exposure. Two days later, on April 7, US President Donald Trump ordered a full-scale barrage of cruise missile strikes on a Syrian airbase out of «revenge» for the murder of «beautiful babies».

  Trump’s decision to attack Syria was reportedly prompted by his disgust at watching videos of the alleged victims, and by the emotional angst that his daughter and special advisor Ivanka Trump felt on also watching the same footage. The video and images were, by the way, released to the Western news media solely by militant-aligned sources, the so-called White Helmets, operating at the location of the alleged chemical weapon attack.

  White House spokesman Sean Spicer later said that any one «who gases a baby» can expect more US military retribution. Spicer also made the crass claim that Syrian President Assad was «worse than Hitler» because of his alleged uniquely barbaric use of chemical weapons on civilians.

  Meanwhile, US and British warplanes operating in Syria, Iraq and Yemen are slaughtering at the very same time hundreds of civilians. In Yemen, thousands of children are dying from starvation due to a US-backed blockade on that country by Saudi Arabia in its war for regime change there. Why aren’t Donald Trump, his daughter Ivanka, and his spokesman Sean Spicer traumatized by these deaths? Why is the Western public also not outraged, traumatized?

  In Syria, on Easter Saturday, April 15, busloads of civilians were murdered by terrorist suicide bombers, whom the Western governments and media refer to as «rebels». Over 120 civilians were massacred including 68 children. Where was the Western outrage at the images of charred children’s bodies hanging out of mangled buses? Indeed, the Western media coverage of that carnage was minimal and was downplayed with insidious words that the victims were «pro-regime supporters».

  But the victims of the bus attacks were more numerous than those allegedly killed during the chemical weapons incident two weeks before at Khan Sheikhoun.

  President Trump has condemned Syria’s Assad as an «animal» due to the alleged use of chemical weapons. Britain’s Foreign Secretary Boris Johnson has also called Assad a «monster». Clearly, the image-projection here is aimed at demonizing and dehumanizing the Syrian leader. Once that image-making is «successful» – and the saturation pejorative Western media coverage is crucial to that success – then a moral, legalistic mandate is created which allows Washington and its allies to escalate their aggression against Syria. Either through diplomatic sanctions at the United Nations or by military means with direct military force, as seen with Trump’s cruise missile barrage on April 7, or with increased support to proxy militant groups inside Syria.

  All the while that Western governments and media have been demonizing Syria over alleged chemical weapons, the political-media campaign has also been directed at smearing Russia for alleged complicity because of its alliance with Syria.

  Britain’s Johnson said earlier this month that Russian leader Vladimir Putin had «toxified» Russia’s international reputation by its alliance with Syria. The British diplomat’s choice of words betrayed an overly contrived attempt to push the propaganda theme.

  In what should be seen as a transparently crude effort, the Western governments tried to splice Russia’s support for Syria by hyping up the «horror» of chemical weapons. The Western political momentum has since dissipated somewhat, but there was an obvious bid by the West in the days following the incident at Khan Sheikhoun to force an ultimatum on Moscow to abandon the Assad government, and to in effect cede to Western demands for regime change in Damascus.

  Russia seems to have succeeded in rebuffing this tawdry tactic by holding firm to principles of international law and objective facts.

  Last week, the UN-affiliated Organization for the Prohibition of Chemical Weapons (OPCW) issued a statement claiming that there was «incontrovertible evidence» that the lethal chemical weapon sarin was used in Khan Sheikhoun on April 4.

  The OPCW did not say who used the alleged sarin. But the inference pushed by Western media was that it was the Syrian government.

  Russia’s Foreign Minister Sergey Lavrov deprecated the OPCW as «discrediting» itself. The supposedly neutral, scientific organization was basing its conclusions on samples supplied by illegally armed groups, in a dubious chain of «evidence» that is neither impartial nor verifiable.

  The «sarin conclusion» announced by the OPCW is in accordance with the assertions made by the US, Britain, France and Turkey. They are not disinterested parties. They are protagonists for regime change and sponsors of a covert war against the Syrian government since March 2011. Yet, audaciously, their partisan claims are afforded credibility by Western media.

  Russia’s call last week for an impartial, on-site investigation into what actually happened at Sheikhoun was rejected by the Western governments. Russia’s demand for an independent probe was also supported by Iran and the Syrian government.

  As Sergey Lavrov noted: «The spreading of false information on the use of chemical weapons by the Syrian government is being used to move away from implementing UN resolutions on finding a peaceful settlement and instead to switch to the long-cherished objective of regime change».

  There is abundant evidence that sarin was not the toxic agent used at Khan Sheikhoun on April 4. American MIT professor Theodore Postol, a highly accredited weapons expert, as well as neuroscientist Dr Denis O’Brien, are just two of many sources who have concluded from the observing the symptoms and circumstances that sarin could not have possibly been used.

  There is abundant evidence too that the Western-backed regime-change militants in Syria have been involved in fabricating supposed «chemical weapons» incidents, creating media-ready videos which the Western news outlets have avidly disseminated and which Western governments have cited as «evidence» against Assad. That was the conclusion of the Swedish Doctors for Human Rights, among other reputable sources.

  Considering that the only «evidence» for the latest chemical weapon incident on April 4 comes in the form of unverifiable videos supplied by terrorist-affiliated groups, it is highly plausible that the narrative put out by these groups, the Western governments and media is false. That narrative is that Syrian warplanes dropped chemical weapons on Khan Sheikhoun, killing over 80 civilians.

  By contrast, it is plausible that the entire incident is an orchestrated fabrication. That is, that there was no chemical «weapon of mass destruction» used at Khan Sheikhoun. If a weapon of that sort were used, as alleged, then one would expect the death toll to be in the hundreds, if not thousands, as happened at Halabja in 1988 when up to 5,000 Kurdish civilians were massacred by the Iraqi dictator Saddam Hussein.

  Instead, what likely happened in Syria was simply the murder by intoxication of civilians by militants using lethal chemicals, such as cyanide or chlorine. Why were the supposed aid responders of the White Helmets not also poisoned if highly toxic sarin had been used? Why do the «responders» seem too preoccupied with making videos instead of actually treating victims with due medical care? Why have no sarin antidotes or decontaminants been requested or sent to Khan Sheikhoun in the days and weeks following the alleged attack?

  Thus the militants and their media-savvy agents in the White Helmets (who are funded by Western military intelligence) could very well have staged the poisoning of unwitting civilians. The despicable, cynical act of homicide may not have even happened on the alleged date of April 4, or even in the alleged location of Khan Sheikhoun.

  Bear in mind that it has been reported in the past that US and other Western military forces have «trained» the so-called Syrian «rebels» (terrorists) on the handling of lethal chemicals. Those Western media reports mendaciously spun the notion that the «rebels» were being trained in the event of Assad’s «chemical weapons arsenal being unleashed».

  The Syrian government has repeatedly and categorically denied that its forces used chemical weapons at Khan Sheikhoun earlier this month or in any other incident. It says that all its chemical weapons were destroyed back in 2014 under a Russian-brokered deal, a result that was confirmed at the time by the OPCW.

  Tenuously, the US Secretary of Defense James Mattis claimed last week that the Syrian government cheated the OPCW and secretly kept a portion of chemical weapons in reserve.

  The Western narrative of chemical weapons (sarin) used by the Syrian government is riven with anomalies if interrogated with critical thinking. Indeed, when looked at with due skepticism, it is apparent that the Western narrative is not merely a misinformed, erroneous perspective. The whole affair is a deliberate, carefully constructed and delivered Western psychological operation, a false-flag propaganda stunt, to demonize and dehumanize the Syrian government in order to propel the Western agenda of regime change. The American CIA and British MI6 have been trying to implement regime change in Syria since 1949 in on-off clandestine projects. The chemical weapon of mass destruction allegation is but the latest ploy in a long-running project.

  Western governments, their military intelligence agencies and the propaganda service of the corporate media have been working on this particular psychological operation for several years in Syria, going back to the first major «chemical weapon» incident in East Ghouta, near Damascus, in August 2013. That stunt failed to effectively demonize the Assad government then. But the Western operation has continued and evolved over time until its latest episode at Khan Sheikhoun on April 4. The «chemical weapon» nomenclature is spurious from the nature of the injuries inflicted. It is more likely an incident of mass poisoning by militants carried out on hapless victims, which is conveniently broadcast around the world by Western governments and media as a «chemical weapon of mass destruction» used by the «Assad regime».

  What is overlooked, however, is the WMD weapon of mass disorientation being used against Western public. The disorientation of critical thinking, emotions and moral standards is deployed in order to more easily manipulate public consent for the Western governments’ criminal enterprise of regime change in Syria.

  There is an abominable charade taking place before our very eyes. A charade in which supposedly «moral», «law-abiding», «democratic» Western governments are colluding with the most vile terror groups using the most vile means of deception and murder. Why this simple glaring truth is not recognized more widely by the Western public is because their own governments have deployed weapons of mass disorientation through dutiful mass media purporting to act as «news services».

  

  

• Contagion Fears Rise In Aftermath Of Home Capital Group Collapse

  With the bank run at Home Capital Group hitting a crescendo on Friday, when in one day 36% of the liquidity at Canada’s largest non-bank lender escaped through the front door, and only an emergency rescue loan yielding over 20% has prevent a liquidation at HCG so far, suddenly some are wondering if the dreaded “C” word is applicable to what Bloomberg has dubbed “one of the world’s strongest financial systems.”

  The word in question is contagion, and the party casually bringing it up is Mawer Investment Management, one of HCG’s largest former investors. Jim Hall recalculating the odds of a contagion widening across one of the world’s strongest financial systems.

  According to Bloomberg, Mawer CIO Jim Hall is recalculating the odds of a contagion widening across the Canadian financial system.

  “The probability has gone from infinitesimal to possible — unlikely, but possible,” said Hall, chief investment officer of the Calgary-based money manager, in an interview Saturday. “If depositors or bondholders start to lose faith in their banks, well then that becomes systemic.”

  Mawer is not waiting to find out either way: the company which oversees more than C$40 billion in assets, sold about 2.8 million shares, or a 4.3 percent stake, in Home Capital in the past week, joining another Calgary-based money manager, QV Investors Inc., in exiting its investment amid the imbroglio consuming the Toronto-based lender.

  Speaking to Bloomberg, Hall said that in his view, the odds that woes at Home Capital – which had C$20.5 billion in assets at the end of 2016, and whose C$15 billion home-loan book represents about 1% of Canada’s C$1.45 trillion mortgage market – spread through Canada’s financial system are low, “despite a growing chorus of voices speculating such fears in a nation gripped by an overheated housing market and runaway home prices in two of its three biggest real-estate markets: Vancouver and Toronto.“

  “It’s a pretty hot fire in one little corner of the forest, and it doesn’t look like it’s spreading,” Hall said. “There are firefighters standing around it right now, so if it starts to move, they’ll put it out.”

  Unless, of course, the firefighters are just as capable as the rating agencies or the company’s investors, the vast majority of whom never saw this coming.

  As reported last week, after admitting it was the subject of a furious bank run, Home Capital secured a loan to stem dwindling deposits and said it’s weighing a sale, hiring RBC Capital Markets and BMO Capital Markets to advise on financing and “strategic options.” Canada’s banking regulator says it’s closely monitoring the situation and surveying other financial firms to assess their condition. 

  “The assets look, at this point, still reasonably good,” Hall said, adding that Home Capital’s problem is a matter of confidence. “Confidence was lost in this company and the business model breaks apart. That’s the problem with banks.”

  So what would a worst case scenario look like?

  Canada’s financial system has lots of fire breaks, as Hall describes it, to prevent problems from spreading.

   

  “Even if a bank gets itself into a confidence issue, it can be effectively bailed out by another bank or by another financial institution or by ultimately the regulator,” Hall said.

   

  Bank failures in Canada’s financial system, deemed the world’s soundest by the World Economic Forum for eight straight years until 2016, are rare. Canadian banks sidestepped the worst of the 2008 financial crisis, having only a fraction of the $1.95 trillion of writedowns and losses suffered by financial firms worldwide.

  Ultimately, it is the “safest” financial systems, those that have taken virtually no reserves against a downside case, that end up being most exposed to unexpected shock factors.

  “In a system that’s well capitalized, there are lots of firefighters around and they’ve got lots of equipment and they’ve got lots of water – that’s kind of where we’re at right now,” Hall said. “But it doesn’t mean it can’t get out of control.” As a reminder, in the US stocks surged for months after the US had its own “New Century” moment, hitting all time highs nearly half a year later, when it took months for the market to digest just what the collapse of subprime meant for the US and global economy.

  

  

• HaPPY MaY DaY 2017…

  

  //embedr.flickr.com/assets/client-code.js

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• Alex Jones Invites Media to Discuss His Child Custody Trial, Then Delivers His Magnum Opus

  The media was gleefully cheering on the specter of Jones losing sole custody of his children. So he invited them to the front of the courthouse to discuss the facts about the trial, and then about 15 minutes in started to redpill them on things, like chimeras and other wondrous and nightmarish mutations.

  This was his magnum opus.

  Watch.

  Content originally published at iBankCoin.com

  

• Paul Craig Roberts Asks "Does Washington Plan To Nuke Russia & China?"

  Authored by Paul Craig Roberts,

  Not everyone likes to hear about the threat of nuclear war. Some find refuge in denial and say that nuclear war is impossible because it makes no sense. Unfortunately, humankind has a long record of doing things that make no sense.

  In previous posts in recent years I have pointed out both written documents and changes in US war doctrine that indicate that Washington is preparing a preemptive nuclear attack on Russia and China. More recently, I have shown that Washington’s demonization of Russia and President Putin, the incessant lies about Russian deeds and intentions, and the refusal of Washington to cooperate with Russia on any issue have convinced the Russian government that Washington is preparing the Western populations for an attack on Russia. It is obvious that China has come to the same conclusion.

  It is extremely dangerous to all of mankind for Washington to convince two nuclear powers that Washington is preparing a preemptive nuclear strike against them. It is impossible to imagine a more reckless and irresponsible act. Yet this is precisely what Washington has done.

  Lt. Gen. Viktor Poznikhir, Deputy Head of Operations of the Russian General Staff has concluded that Washington in pursuit of global hegemony is implementing an anti-ballistic missile system that Washington believes can prevent a Russian nuclear response to a US pre-emptive attack. 

  Careful studies have convinced the Russians that Washington is investing in and arranging components that have no other function than to devastate Russia and cripple the country’s retaliatory capability. In short, Washington is preparing to launch a nuclear war. 

  As I explained previously, the theory behind this insane scheme is that after America’s preemptive strike Russia will be so devastated that Russia would not retaliate with any remaining forces out of fear that Washington would launch a second major strike. Washington also plans to use agents in place to assassinate as many members as possible of the Russian government, thus leaving the government in confusion without leadership.

  Yes, the insane American/Israeli neoconservatives are this determined to exercise hegemony over the world.

  Yes, Washington is sufficiently criminally insane to risk the destruction of life on earth based on the supposition that Washington’s offense will work perfectly and Russia and China’s capabilities will be so degraded that no retaliatory response will occur.

  One might hope that the American and Western populations would be outraged that Washington is so power-crazed that Washington is subjecting all life to such risks. But there is no sign of an anti-war movement. The Western leftwing has degenerated into Identity Politics in which the only threat comes from white heterosexual males who are portrayed as misogynists, racists, and homophopes. The Western leftwing is no longer war-conscious. Indeed, the leftwing has become diverted into such silly irrelevancies as transgender rights to toilets of their choice. The impotence of the Western left is so overwhelming that the left might as well not exist.

  Where then is the hope? Russia and China cannot simply sit there and await America’s preemptive nuclear strike.

  Possibly Washington does not intend a preemptive strike, but only to convince Russia and China that Washington’s preparations give Washington so much predominance in a conflict that Russia and China will submit to Washington’s hegemony. But this interpretation of Washington’s intention implies no less risk. Why would Russia and China wait for Washington to complete its preparations for war, preparations that permit Washington to turn Russia and China into puppet states?

  The US military/security complex has clearly prevailed over Trump’s intention to normalize relations between the US and Russia, and anti-Russian venom continues to pour out of NATO and Washington’s European vassal states. The majority of the American people seem to have accepted the propaganda that Russia is the number one threat to the United States. With propaganda controlling the explanation, Washington’s aggressive actions are explained as defense against a threat and not as a policy that will end life on earth.

  The chances are high that life on earth is approaching its end. The responsibility lies heavily on the American people, whose success, due to the mistakes of others, made Americans think that they are exceptional and privileged. Unaware of the inhumane threat to all life that is embodied in the neoconservative claim that Americans are exceptional and indispensable, the self-satisfied American public is unaware of the consequences of such hubris. Hubris is leading them, and the entire world, to slaughter in thermo-nuclear war.

  The neoconservative claim of American exceptionalism is the identical claim made for Germans by Hitler. If Americans are indispensable, everyone else is dispensable and can be “bombed into the stone age” as one US government official put it, or nuked as Washington intends to do to Russia and China. The claim of American exceptionalism is not accepted by Russia and China. Therefore, the insane, crazed monsters who rule over the West in Washington are bringing life on earth to an end.

  And there are no protests. The idiot British, the idiot Germans, the idiot French, Italians, Canadians, Australians, Belgians, Greeks, Portuguese, Spanish, Japanese, rally behind the insanity that is Washington.

  And so apparently do the American people, a population stupid beyond all belief.

  

  

• "It's Just Crazy" (Again): 2-Bedroom LA House Sells 40% Above Asking

  Two days ago we looked at the latest troubling development in US home price trends: a new bubble appears to be emerging in all the “usual suspect” places. As we noted on Thursday, “home prices in markets that bubbled over back in 2006/2007, like Las Vegas and San Francisco, got cut in half in 2009 but have since doubled again of their lows.  Meanwhile, markets like Denver and Dallas that didn’t participate as much in the 2007 mania are now surging to all-time highs, with Dallas prices up 55% over the past 5 years.”

  

  The Wall Street Journal added that some of the home buying behaviors of consumers, like paying prices well above appraisal values and waiving home inspections, are starting to be eerily reminiscent of 2006:

  In some markets, bidding wars are breaking out. Agents said some buyers are kicking in extra cash when properties don’t appraise for the asking price, and some are waiving their right to home inspections.

   

  “It can’t be sustained,” said David Berson, chief economist at Nationwide Insurance and a former chief economist at mortgage giant Fannie Mae, referring to the frenzied buying. “It can’t go on forever.”

  Other signs of overexuberance have emerged, including surging levels of licensed Realtors all chasing a quick buck.

  The number of licensed Realtors has jumped by nearly 25% since 2012, hitting a nine-year high in 2016 and sitting just 9% below the peak in 2006, according to real-estate consultant John Burns. In Denver, homes are selling briskly. The median number of days that homes spent on the market declined to eight in the first three months of the year from 61 in 2012, according to Redfin. Home prices rose 8.5% in Denver over the year ended in February, according to Case-Shiller.

   

  Nicki Thompson, an agent in Denver, said she recently had a listing that was on the market for two weekends at $1.2 million and she received multiple all-cash offers above the listing price. 

   

  “It’s just crazy,” she said.

  And for a practical example of just how crazy it truly is, take this renovated 2-bedroom, 1,948 sq. ft house first built in 1951 in the Eagle Rock section of Los Angeles, which was listed in mid-March for $699,000, was estimated by Redfin at $780,000, and sold yesterday for $980,888 (more than $500/sq foot) and 40% above asking, just over a month after it was first listed.

  

  Maybe it was the house’s profile “description” that unleashed the buying frenzy:

  In the 1960s-80s drums played on some of the most famous pop songs known (Good Vibrations, Mrs. Robinson, A Little Less Conversation, to name a few) were built in this garage in our beloved Eagle Rock. A. F. Blaemire and his wife, Kirsten, filled this home with music and creativity for decades, and now it’s ready for its next inspired owner! With freshly refinished hardwood floors and repainted interior, 5208 Monte Bonito is a blank canvas with great potential. The rooms are bright and spacious, including a downstairs recreation room perfect for a jam room, art studio, den (or all of the above!). The two-car garage has direct access to the house and an additional storage room. The back yard has plenty of space for entertaining and gardening – there is already an avocado tree, an orange tree, and a pitaya to get you started! Views of the Eagle Rock from the master bedroom, and sunset views from the front porch make this the ideal setting to call home.

  Then again, maybe not.

  So what do you get for just under a million in LA these days? Not much: two bedrooms, less than two bathrooms, a 2 car garage, a decorative fireplace, a rec room, and a 7,195 sq foot lot.

  

  Here are some photos showing what a “million dollar house” looks like in the latest US housing bubble.

  

  

  

  

  

  

  

  

  

• Global Reflation Trade In Trouble: Chinese Economic Data Plunges To 6-Month Lows As New Orders Dry Up

  New Orders for Manufacturing and Services sectors of the economy tumbled to their lowest levels in at least 6 months, weighing down both PMIs to their lowest levels since October 2016. After Q1's record surge in new credit creation, it appears the rapid tightening in China's financial conditions is already having an impact on the real economy (as well as the bond and stock market).

  As a reminder, for the first quarter, TSF reached a new record high 6.93 trillion yuan – equivalent to the size of Mexico's economy – and well above last year's first quarter total. At today's Yuan exchange rate, China's credit creation in Q1 amounted to just over 1 trillion US dollars.

  

   

  And since then PMIs have plunged from multi-year high to six-month lows… and it's broad-based…

  

   

  The manufacturing data shows and sudden sharp drop in New Orders, output prices (commodity crash), and

  

   

  But Services data is even worse – the 4th month of contraction in employment and a drop in doemstic and export new orders…

  

   

  The global engine of reflation just hit a wall…

  

  

  

• The Fruits of the Arab Spring Have Bore an Open Air Slave Market in Libya

  Regime change was all the rage under the Obama administration — especially in the middle east. The pitch was MUH democracy needed to be exported to savage lands, whose populations were largely an illiterate ensemble of archaic tribes hellbent on blowing each other up over the interpretation of their fictional holy books.

  Here was two time failed Presidential candidate, Hillary Clinton, flippantly opining about the fate of Libyan leader, Muammar Gaddafi.

  Since then, Libya has been a staging ground for terrorist activities and an open hole in North Africa by which an endless stream of migrants use to enter Italy. All of the weapons stockpiled by Gaddafi were taken by ‘rebels’ who used them to take over large swaths of land in Syria and Iraq. Our embassy was run over, and our Ambassador killed. All of this because we wanted to ‘free’ the Libyan people from their misery — which, ironically, resulted in a greater and deeper misery than they could’ve ever imagined.

  So what has the liberal/neocon policy of regime change done for Libya lately?

  Fucking slavery (please contain your outrage).

  According to a report by the UN Migration Agency, Libyan rebels are capturing poor Africans seeking to enter Europe, housing them in parking lots and make-shift prisons, in order to sell them on the open market like the days of antiquity, for as little as $100.

  Source: CNBC
  “We talk to returning migrants every day and we hear this stories every day — stories of exploitation, psychological, physical and sexual abuse,” Giuseppe Loprete, Niger-based chief of mission of the UN International Organization for Migration, told CNBC recently.

  For thousands of migrants paying to be smuggled out of North Africa, Libya remains the only route to Europe, and is a “black hole” where many disappear into exploitation, he said, adding: “The situation is only getting worse.”
   
  The going price for kidnapped migrants ranges from $200 to $500 in Libya, according to survivors who have returned to the IOM’s transit center. In the last few months, the organization has arranged for the repatriation of 1,500 migrants back to their homes, which include Nigeria, Senegal and Gambia.
   
  Libya is a gateway to Italy from Africa, with an estimated 25,000 migrants having crossed the Mediterranean Sea this year. Although Italy has taken measures to stem the flow of migrants from Libya, IOM data suggest crossings are on pace to challenge the nearly 182,000 migrants who landed in Italy last year.

  
   
  Former National Security Council officer under Obama, Eric Pelofsky laments, “It is a terrible situation thriving in the shadows created by the larger conflict in Libya.”
   
  Leonard Doyle, Spokesperson of the Director General at the International Organization for Migration (IOM), sums it up: “Migrants who go to Libya while trying to get to Europe, have no idea of the torture archipelago that awaits them just over the border.” He grimly adds, African migrants “become commodities to be bought, sold and discarded when they have no more value.”

  Content originally published at iBankCoin.com

  

• All The Plenary's Men

  Via BestEvidence,

  “The King can do no wrong.”

  —William Blackstone, Commentaries on the Laws of England

  “When the president does it, that means that it is not illegal.”

  —Ex-President Richard Nixon, interview with David Frost

  The question at bar is why the U.S. Department of Justice has failed to prosecute any too-big-to-fail banks or – more importantly – their bankers, even for admitted crimes.

  It’s a crucial question, because after eight straight years of unremitting prosecutorial failure, it looks very much as if a select group of top banks can, in fact, do no wrong. If that’s the case, then our constitutional republic isn’t merely in trouble. It's dead.

  A person or group of people who satisfy Blackstone’s criterion for ultimate sovereign power—the power to commit crimes with impunity—can’t exist in a nation where the law reigns supreme. And yet here we are a decade after the financial crisis began in earnest, and not one TBTF bank executive has gone to jail.

  Legally, the TBTF banks are indistinguishable from the King, since the power to commit crimes with impunity swallows all other sovereign powers; such a power isn’t even supposed to exist in the U.S., and yet it does.

  Moreover, since there can’t be two kings in a kingdom, the entire U.S. government, from the president on down, is just one of the King’s men under this formulation of power. The real job of the U.S. government, then, isn’t to represent the will of the people at all, it’s to do the King’s bidding. A nation that isn’t governed by law is governed by instead by a king—it’s one or the other—and the president’s inferiority to such an above-the-law sovereign was confirmed over 40 years ago with Nixon’s ouster. The president, unlike the King, answers to the law (despite Nixon's opinion).

  Now, you may say that while the TBTF banks might arguably have the de facto power of the King, that’s a far cry from wielding such power formally (i.e., having de jure criminal immunity).

  The reply to that objection is set forth in this film, “All the Plenary’s Men,” which is a sequel to “The Veneer of Justice in a Kingdom of Crime.”

  Another objection, raised by the DOJ itself, is that it HAS prosecuted TBTF bankers, citing cases like that of Raj Rajaratnam. These cases, however, in fact reveal the DOJ acting on behalf of the criminal global banking cartel.

  On that score, the DOJ’s abysmal track record is by now so extensive and so thorough that it’s possible to spot legal patterns in the DOJ’s protracted miscarriage of justice, and, as you’re about to see, those patterns are very deeply disturbing indeed. What’s been going on cuts right past a garden variety constitutional crisis like Watergate straight to a crisis of sovereignty.

  The backdrop for all of this is HSBC’s exoneration in December of 2012 for laundering money for drug dealers and terrorists, about which the House Financial Services Committee issued a report in July of 2016. Whether it was due to the political circus in town at the time, or to the Republican authorship of that report (albeit without dissent), it didn’t get nearly the scrutiny it deserved.

  You see, prosecutors working on the HSBC case were actually going to indict the bank, but they got overruled, and HSBC and its team of criminals skated. The story of how exactly that reversal came about reveals, if not the King himself, then certainly many of the King’s top men.

  Make the coffee extra strong before viewing. Lots of ground gets covered, quickly.

  And don’t mothball those pitchforks and torches just yet.

  

  

• Land Of The Free-ish

  …Free to have the same opinion as me or else…

   

  

  Source: Townhall.com

  

  

• Peter Schiff: Damn The Deficits, Huge Tax Cuts Ahead!

  Authored by Peter Schiff via Euro Pacific Capital,

  Donald Trump has made good on one of his most audacious campaign promises by submitting what he describes as the biggest tax cut in U.S. History. For once, at least, this does not appear to be Trumpian braggadocio. It really may be the mother of all tax cuts. But if passed, what may this bunker buster do to the economy? While I have rarely met a tax cut I didn’t like, this one just may be more likely to send the economy into a downward spiral than it is to send up to orbit.

  

  As I mentioned in my January commentary, Donald Trump’s big-spending, tax-cutting campaign rhetoric threatened to make him the biggest borrower in presidential history. He comes to office at a particularly vulnerable time for budget dynamics. After contracting by nearly two thirds from 2010 to 2015 (from the mind-bending $1.3 trillion to the merely enormous $438 billion), the Federal deficit started expanding again in 2016, moving up to $587 billion (Govt. Publishing Office, Office of Management & Budget (OMB). Current projections have it going up nearly every year over the next two decades. The Congressional Budget Office expects it to permanently surpass $1 trillion annually by 2021 or 2022. But these ominous forecasts were made well before anyone thought Trump had a snowball’s chance of ever becoming president. Now that he is in the office, those projections will be the floor. The ceiling is anyone’s guess.

  The forecasts assume that the taxing and spending laws in place during the Obama Administration won’t change. The steep increase in projected deficits towards the end of this decade and into the next is largely driven by the retirement of the Baby Boom generation, which will lead to simultaneous increases in entitlement spending and decreases in tax revenue. This brick wall has been hiding in plain sight for decades but the can-kickers in Washington have serially failed to do anything to avert the inevitable collision.

  (These forecasts also optimistically assume that the economy never again enters recession, inflation never again rears its ugly head, and that our creditors never get concerned enough about our growing debt to demand a premium for the risk of financing it.)

  But now that Trump occupies the Oval office, this date with destiny may come much sooner…and she will definitely be ordering the lobster.

  Before I go negative, let me give credit to Trump for picking the right taxes to cut. He kills the estate tax, an ugly beast that should have been euthanized years ago. Some may see this simply as a gift to the very rich. But legal wizards have long since devised strategies that offer almost complete protection from the death tax. None of these structures offer any real benefit to the businesses these millionaires typically own, or to the economy in general. Killing the tax will cost the government almost nothing, but it will remove tremendous impediments that have prevented family-run companies from growing over generations. He also kills the Alternative Minimum Tax, a complex parallel system of taxation that few understand but somehow manages to ensnare more and more taxpayers every year.

  Most importantly, he brings down the corporate tax rate from the globally non-competitive rate of 35% to the much more manageable 15%. Taxing corporations has always been a bad way to raise revenue. Corporations, after all, don’t pay taxes, which are simply treated as a cost of doing business. The real costs are borne by customers, who must pay higher prices, and employees, who must suffer with lower wages. But high domestic corporate taxes have hamstrung U.S. corporations and greatly contributed to the decline of American manufacturing. A more competitive corporate sector will shower benefits on all manner of consumers and employees.

  On the individual tax side, his decisions are much more problematic. Although Trump makes the sensible decision of compressing the seven individual tax brackets into just three (10%, 25%, and 35%), and doubles the standard personal deductions (thereby saving many people from the hassles of itemization), the headline-grabbing component of the proposals has to do with the lowering of the “pass-through” tax rate to the same 15% level that applies to corporations. This means that wealthy business owners, highly paid freelancers, and partners at law firms, medical groups, and management consultancies, will qualify for the 15% rate. This will be a huge windfall to some of the richest people in the country, who typically pay the highest marginal tax rate (currently 39%). And since the top one percent account for nearly 50% of tax revenue, this one provision promises to cost Uncle Sam plenty and to dramatically shake up the corporate landscape.

  Small business owners and independent contractors will in fact receive the benefit of the 15% pass through rate. But “Mom and Pop” entrepreneurs rarely have income that is high enough to be taxed at the higher rates. These smaller earners will likely be be trading a 15% tax for a 15% tax. All the big benefits will go to the really big fish. Whereas the vast majority of Tom Cruise’s income would have been taxed at the 39% rate, it will now be taxed at just 15%. His taxes will be reduced by nearly 60% from current law. The same holds true, in lesser degree, to lawyers, doctors, and consultants making more than a few hundreds of thousands of dollars annually.

  Is there any reason that could justify why a hedge fund manager making a million dollars per year should pay 15%, but a full time CEO at a corporation making half that would be subject to the highest marginal rate of 35%? It’s absurd. Now I’m not a big fan of the “progressive” tax system, whereby the tax rate goes up with income. I think a “flat” tax system, in which everyone paid the same rate, would be better. (Ideally I would like to see income taxes replaced by far less onerous and intrusive consumption taxes). But I certainly don’t believe in a “regressive” tax system in which lower-earning citizens pay higher rates than those at the top. But that’s exactly what Trump is trying to do.

  Given this wide disparity in tax rates, we can assume that the employment landscape will adjust dramatically. We should expect that legions of highly-paid full-time employees will start to form Limited Liability Corporations (LLCs) to work freelance rather than as employees. There are few barriers that would prevent such a shift, and the growth of internet-based work scenarios will continue to break down the traditional barrier between employee and freelancer. Yes, there are some labor rules that seek to separate employees from freelancers, but those rules may be easily circumvented, especially when the reward is so great. Rather than envy the lawyer earning more and paying less, the CEOs of the country will likely incorporate and sell their services freelance to their former employers.

  This shift will mean that a great many of the country’s highest earners will be paying taxes at the lowest rate. As a result, the reductions in tax revenue would likely be far greater than what is predicted in the standard modeling. 

  But unlike most prior tax cuts, the Trump version does not even make any attempt to balance the cuts with corresponding cuts in government spending. If Trump’s tax cuts don’t immediately generate sustained 4% growth or more, we may be staring down the barrel of $2 to $3 trillion in annual deficits. Is this an experiment that we really want to try?

  But even if the reforms can kick the economy into higher gear, thereby creating higher revenues with lower rates (The Laffer Curve), our current low interest rate environment provides significant obstacles to permit that growth to be sustained. If growth kicks up to the 4% range, the Federal Reserve will have to accelerate its rate increase schedule. Allowing rates to remain two to three percent below the growth rate could risk an overheated economy with inflation spiraling out of control. These higher rates will act as a stiff headwind to an economy that has grown increasingly dependent on ultra low rates.

  But increases in rates would also cost the economy in another way. Our current bonded national debt is ready to surge past the $20 trillion mark. The Trump tax cuts will push it beyond that very quickly. If the Fed raises rates to keep pace with higher growth, then the Government will have to pay much more to finance the outstanding debt. At $20 trillion, every point of increase in interest rates will cost the government $200 billion annually. At that level, if interest rates were at 3.75%, instead of the current .75%, then the Federal Government would have to come up with about another $600 billion per year in interest payments. (That number will be much higher when the debt grows past $20 Trillion).

  But it's not just Uncle Sam that is over-loaded with debt. Corporations and households would see their interest costs surge as well with rising interest rates. So what lower taxes giveth, higher interest rates will taketh away. 

  Consider the housing market. Not only will higher interest rates substantially increase the cost of home ownership (through higher mortgage rates), but Trump’s tax proposals will dramatically increase the cost of ownership for those living in high tax states. Under the proposal, homeowners will no longer be able to deduct property taxes, and a doubling of the standard deduction means a much larger percentage of homeowners will not be able to deduct mortgage interest from their federal income tax. Plus, with the top tax rate reduced from 39.6% to 15%, the mortgage interest deduction will be far less valuable to those higher earners who can still take advantage of it. Higher mortgage rates and lower tax subsidies will increase the cost and decrease the appeal of home ownership. This could lead to a crash in real estate prices, especially in the high end of the market. Falling prices could wipe out what little home equity many Americas have left, and lead to another wave of foreclosures. The losses to Fannie Mae and Freddie Mac could be significant, with the costs falling directly on the Federal government, further driving up annual deficits. 

  The reality is that years of massive deficits, runaway government spending, artificially low interest rates, and three rounds of quantitative easing, have left the economy so sick that any tax cut large enough to revive it may actually kill it instead. The only silver lining to this cloud may be that the coming fiscal train wreck leaves lawmakers no choice but to slash government spending. If the real Republican agenda is to starve the beast, its success is assured.

  

  

• Portland Rose Parade Cancelled Amid Violent Threats From Anti-Fa: "You've Seen How Much Power We Have… Police Can't Stop Us"

  Authored by Mac Slavo via SHTFplan.com,

  For a bunch of peace loving, tolerance spewing social justice warriors, it sure does appear that the new “progressive” movement in America is rapidly turning to Bolshevik tactics to force their will upon a free and non-violent people.

  

  The latest example of a society on the brink of civil war comes to us from Portland, Oregon, where every year the 82nd Avenue of Roses Business Association kicks of the city’s annual Rose Festival with a family-friendly parade.

  Except this year, there will be no parade. Organizers have cancelled the event amid threats of violence from groups referring to themselves as “Anti-Fascist.” According to The Washington Post, the reasoning behind the threats is reportedly outrage over the fact that the county’s Republican Party was given one of the nearly 100 spots in the parade.

  Then came an anonymous and ominous email, according to parade organizers, that instructed them to cancel the GOP group’s registration — or else.

   

  “You have seen how much power we have downtown and that the police cannot stop us from shutting down roads so please consider your decision wisely,” the anonymous email said, referring to the violent riots that hit Portland after the 2016 presidential election, reported the Oregonian. “This is nonnegotiable.”

   

  The email said that 200 people would “rush into the parade” and “drag and push” those marching with the Republican Party.

   

  “We will not give one inch to groups who espouse hatred toward LGBT, immigrants, people of color or others,” it said.

  Earlier this month we reported that members of the so-called anti-fascist, left leaning progressive movements are preparing for war by organizing combat fighting classes and even going so far as to suggest it’s time to start bringing guns to such protests as a show of force:

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

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

  I hope we learn from today

   

  …

   

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

   

  …

   

  We also need better equipment

  Full report: There Will Be Blood: Left Prepares For War After Berkeley Beat Down: “Combat Training, Better Equipment, Guns…”

  While these folks may think silencing the free speech of political ideologies contrary to theirs through violence is a means to a worthy end, it was the Bolshevik ideology, similar to what we’re seeing from “comrades”  in the anti-fascist movement, that eventually gave way to one of the world’s most brutal dictators and was responsible for the deaths of, quite literally, over 100 million people in the 20th century.

  On another and perhaps equally interesting note, we’ll mention the fact that for years the Department of Homeland Security and domestic law enforcement agencies had warned Americans that it was lone wolves with conservative values who stockpiled guns, food, bibles and peacefully protested government overreach who were, by officials and congressional members, deemed terrorists.

  In fact, there were a variety of identifiers used to qualify an American citizen as a potential domestic terrorist:

  So how does a person qualify as a potential domestic terrorist?  Based on the training I have attended, here are characteristics that qualify:

  • Expressions of libertarian philosophies (statements, bumper stickers)
  • Second Amendment-oriented views (NRA or gun club membership, holding a CCW permit)
  • Survivalist literature (fictional books such as “Patriots” and “One Second After” are mentioned by name)
  • Self-sufficiency (stockpiling food, ammo, hand tools, medical supplies)
  • Fear of economic collapse (buying gold and barter items)
  • Religious views concerning the book of Revelation (apocalypse, anti-Christ)
  • Expressed fears of Big Brother or big government
  • Homeschooling
  • Declarations of Constitutional rights and civil liberties
  • Belief in a New World Order conspiracy

  We wonder if similar classifications will be assigned to those who threaten families and children at parades?

  

  

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• Two Blondes, Two Fates

  From the Slope of Hope: Earlier this week, my son asked me a sincere question: “How come Marissa Mayer got $200 million by screwing up Yahoo?”

  It was a good question, and one I had trouble answering at first, because I’d like him to think that there’s some level of fairness, meritocracy, and sensibility to this world of ours. In Mayer’s case, however, there is none. Her entire massive fortune is due to being in the right place, at the right time, on multiple occasions. She is no more clever or shrewd than someone who won the mega-jackpot lottery

  When I had time to discuss the reality of the situation with him thoroughly, I laid out the bare truth for him. It is as follows:

  (1) Mayer was a senior at Stanford, trying to figure out which of her many job offers she would accept. A startup named Google was looking for a product manager, so they sent her an email. Seeing the subject line, she intended to press the Delete key, because she wanted to join Bain Consulting (a very typical place for a graduate of an elite school to begin their career), but she accidentally pressed the Space bar, showing the email’s contents. She was intrigued enough to read it and talk to the founders, and she took the plunge. Word on the street is she that was a Friend With Benefits to Larry Page during her tenure there, which didn’t hurt matters. Suffice it to say she made her first fortune by stumbling into Google the moment she left college and being real chummy with one of the Google guys.

  

  (2) During this same time period, Yahoo couldn’t do anything right. They’ve always been a pretty crappy site, but they had the good fortune of being a “first mover” when the Internet first appeared, and their popularity fed on itself. They stupidly said no to a great buyout offer from Microsoft, and they kept lurching from one failed CEO to another, including, notably, Carol Bartz, who is basically an older, more pissed-off version of Marissa.

  http://www.youtube.com/v/zq4A1uCQ1w0

  (3) In a perfect illustration of the Peter Principle, Mayer had risen to her own level of incompetence at Google, and she started getting sidelined. It slowly began to dawn on people that she wasn’t particularly good at anything, except narcissistically posing for magazine covers, and she started to be pushed farther and farther away from senior management. She was rich enough to never work again, but her glory days seemed to be behind her.

  (4) Yahoo, desperate for a shot at rejuvenating itself, reached out to Mayer for the plum post of CEO. What I explained carefully to my son is that when a public company really, really wants someone, that “someone” can construct a deal so that they make a fortune no matter how badly they fuck up. And that’s precisely what Marissa did. She got a monster signing bonus and a pay package that was Gigantic if she screwed everything up and Super Gigantic if things went well. For a while, the world declared that, as with Steve jobs did with Apple in 1996, she was going to save Yahoo.

  

  (5) In the five or so years that she ran Yahoo, she did just about everything wrong. She enriched friends by paying insane figures for their startups. She spent $1.3 billion in tumblr, which failed. She hired Katie Couric at $10 million a year to – – I dunno – – sit in front of a camera and show her big, white teeth. She wasted money like mad, didn’t turn the company around, and was essentially an epic screwup.

  So how come Yahoo’s stock price didn’t reflect this? I can answer that with one word: Alibaba.

  See, many years earlier, Yahoo put money into the tiny company Alibaba, and its 40% stake became very, very valuable. Indeed, Yahoo had a NEGATIVE enterprise value. The one and ONLY thing that preserved shareholder value was that it just happened to have a big stake in BABA whose share price just kept going up. That’s it. End of story. Dumb luck. And Mayer benefited from this happy accident more than anyone. She is, I assured my boy, creepily laughing all the way to the bank.

  http://www.youtube.com/v/OinvdoyBsEc&t

   

  So why did I call this post TWO blondes? Because in sharp contrast with the dumb luck of Marissa Mayers is the rotten luck of someone who almost got away with it – – but didn’t – – good old “Crazy Eyes” Elizabeth Holmes, who had the gall to hold herself out to the world as the reincarnation of Steven P. Jobs.

  

  You know the story well, so I won’t go into much detail. The thumbnail sketch is that she left Stanford at 19, put Theranos together, somehow convinced venture capitalists (distracted, I suppose, by her trim figure and fake blonde hair) into valuing her company at $9 billion, and then – – whoops – -it turns out that she hasn’t invented a goddamn thing, and that their technology doesn’t work. The result? Government investigations, investor lawsuits, employee suicides, and a net worth of Holmes collapsing from $4.5 billion to $dick.

  The massive wealth she created for herself and others was as fake as that gorgeous blonde hair of hers.

  

  Oh, you thought it was real? C’mon now. These women like to create an image. In spite of their post-feminist bluster, they will happily pander to whatever sexist notions they believe will garner them the highest paycheck. I offer you this tidbit of reality as well.

  

  Pretty amazing what a lot of cash can buy in terms of a facade, isn’t it?

  

  Same person. Honest. And maybe a touch of Photoshop.

  So, in the end, you’ve got one woman who was able to pull the wool over everyone’s eyes and make a fortune of about a quarter billion dollars, and you’ve got another who almost pulled the wool over everyone’s eyes, but got caught before she got away with it, and is left with nothing.

  Two fake blondes. Two different fates. There is no real sense to any of this. Right time. Right place. Luck of the draw. And a little helping of what the boys like, just to grease the skids.

  

• Here's Who NATO Will Probably Be Fighting If There's A World War III

  Authored by Darius Shahtahmasebi via TheAntiMedia.org,

  

  Russia recently said it would support Iran’s bid to join the Shanghai Cooperation Organization, an emerging economic and political alliance led by China. This Shanghai Bloc was originally formed in 1996 before it was rebranded in 2001. Its membership includes Kazakhstan, Kyrgyzstan, Russia, Tajikistan, and Uzbekistan. Last year, India and Pakistan also signed the memorandum of obligations and are expected to become full members sometime this year. The bloc has expanded into a military organization over the last few years and has run joint military exercises in the past.

  Russian Foreign Minister Sergei Lavrov said Iran now fully fits the criteria for membership and that discussions on its bid to join will take place this summer.

  “Next in line [for membership]…is Iran, which has resolved issues related to sanctions from the U.N. Security Council,” Lavrov told Russian state news agency Itar-Tass, as reported by Newsweek.

  The country now “fully meets the criteria for membership,” Lavrov told journalists at the end of a meeting of the group’s foreign ministers.

  Iran currently has observer status in the organization, meaning it can attend summits. As is quite clear, Iran and Russia already cooperate closely both economically and militarily, particularly regarding the Syrian conflict. What is especially notable about this alliance, however, is the fact that the U.S. was rejected from gaining observer status in 2004, which, as Newsweek reports, reinforces “the impression that its goal is to exist in opposition to Western political and military alliances.”

  Further complicating this issue is the fact that NATO member Turkey expressed a desire to join this organization at the end of last year. As Turkey transitions from a so-called democracy to a nearly outright dictatorship, Turkish President Tayyip Erdogan may find he has more in common with his eastern counterparts than he does his western ones.

  If this scenario were to occur, it would place a NATO ally in direct alliance with NATO’s longtime arch-rivals Iran and Russia.

  As the world is seemingly preparing for a third world war between NATO and the growing Eastern bloc, we are witnessing the strengthening of alliances as well as the switching of some very strategic ones. One can only hope that as alliances switch and strengthen, the balance of power could shift just enough to prevent the powers-that-be from launching this disastrous war in the first place.

  

  

• You Can't Buy Love… But You Can Rent It

  According to the Digital Market Outlook (DMO) by Statista, the country with the largest share of adults paying for a dating service is the United States.

  

  You will find more statistics at Statista

  As Statista's Martin Armstrong details, at 26.4 percent, over a quarter of Americans are spending their money on trying to find love (or a sexual encounter).

  The DMO analysts classified 'dating services' as either 'matchmaking', 'online dating', or 'casual dating'. Making up the top three were the UK and Germany on 20 and 17 percent respectively.

  

  

• ISIS Apologized To Israel For Attacking IDF Soldiers

  In a curious incident that is certain to provoke questions about the proximity, not to mention fund flow, between Israel and ISIS the former Israeli Defense Minister, cited by the Times of Israel, said that  Islamic State terrorists have on at least one occasion “apologized” to Israel for mistakenly attacking IDF soldiers in the occupied Golan Heights. The disclosure may also provide some insight into why after reportedly attacking virtually every religion and ethnicity in the region, there have been virtually no documented attacks by the Islamic State on Israel or its citizens.

  

  Discussing the wider Israeli policy of “neutrality” in Syria, former defense minister Moshe Ya’alon accidentally admitted that Israel has an open communications channel with an Islamic State cell which operates in Gollan Heights.

  “There was one case recently where Daesh opened fire and apologized,” Ya’alon said on Saturday, quoted by the Times of Israel.

  Asked to expand on his controversial statement, Ya’alon’s office refused to elaborate. The IDF also declined to comment. Under Israeli law, any communication with terrorists is considered illegal, unless of course the Israel state covertly does not consider ISIS terrorists.

  Ya’alon served as Israel’s Defense Minister from 2013 until his resignation in May 2016, and his comments were reportedly referring to the first direct incident involving clashes between Israel and Islamic State terrorists. In that incident which took place last November, the Shuhada al-Yarmouk cell, which has pledged allegiance to ISIS, exchanged fire with Israeli forces after the IDF’s Golani Brigade crossed the security fence with Syria to conduct an “ambush operation.”

  
  Former Israeli defense minister Moshe ‘Bogie’ Ya’alon speaks at the Hebrew University

  While the official Israeli position is pursuing neutrality in the Syrian conflict, Tel Aviv has on several occasions engaged Syrian military targets in Syria – most recently on Wednesday – usually under the pretext of preventing the alleged transfer of weapons to Hezbollah, considered a terrorist group by Israel. Last month, Tel Aviv confirmed conducting airstrikes on several targets in Syria, after Damascus activated its air defense system against the IDF jets.

  While Prime Minister Benjamin Netanyahu has justified the repeated incursions, explaining that IDF planes targeted a Hezbollah weapons convoy, Damascus has said that the Israeli strikes only benefit the Islamic State and other terrorist groups. Earlier this month the Syrian President Bashar Assad once again blamed Israel of helping militants terrorizing his country.

  “You can assume that these terrorists are fighting for Israel. If they aren’t part of the regular Israeli army, they’re fighting for Israel. Israel has common goals with Turkey, the United States, France, Britain, Saudi Arabia, Qatar and other countries,” Ynet quoted Assad as as saying.

  “Israel is working on helping these terrorists wherever the Syrian army is advancing. It attacks in one form or another to provide them with assistance, and to stop the Syrian army’s momentum in the face of the terrorists,” the Syrian leader added.

  In light of Ya’alon’s comments, Assad may have been right.

  

  

• Will Trump Release The Missing JFK Files?

  Authored by Philip Shenon via Politico.com,

  

  The nation’s conspiracy-theorist-in-chief is facing a momentous decision. Will President Donald Trump allow the public to see a trove of thousands of long-secret government files about the event that, more than any other in modern American history, has fueled conspiracy theories – the 1963 assassination of President John F. Kennedy?

  The answer must come within months. And, according to a new timeline offered by the National Archives, it could come within weeks.

  Under the deadline set by a 1992 law, Trump has six months left to decide whether he will block the release of an estimated 3,600 files related to the assassination that are still under seal at the Archives. From what is known of the JFK documents, most come from the CIA and FBI, and a number may help resolve lingering questions about whether those agencies missed evidence of a conspiracy in Kennedy’s death. As with every earlier release of JFK assassination documents in the 53 years since shots rang out in Dealey Plaza in Dallas, it is virtually certain that some of the files will be seized on to support popular conspiracy theories about Kennedy’s murder; other documents are likely to undermine them.

  There is no little irony in the fact that decision will be left to Trump, long a promoter of so many baseless conspiracy theories about everything from his predecessor’s birthplace to the notion that the father of one of his campaign-trail rivals was in league with JFK assassin Lee Harvey Oswald.

  For the first time, the Trump White House is acknowledging that it is focused on the issue, even if it offers no hint about what the President will do. A White House official, speaking on condition of anonymity, told Politico last week that the Trump administration “is familiar with the requirements” of the 1992 law and that White House is working with the National Archives “to enable a smooth process in anticipation of the October deadline.”

  Under the 1992 JFK Assassination Records Collection Act, the library of documents about Kennedy’s death must be made public in full by the deadline of this October 26, the law’s 25th anniversary, unless Trump decides otherwise. It is his decision alone.

  The prospect of the release of the last of the government’s long-secret JFK assassination files has long tantalized historians and other scholars, to say nothing of the nation’s armies of conspiracy theorists, since no one can claim to know exactly what is in there.

  Martha W. Murphy, the Archives official who oversees the records, said in an interview last month that a team of researchers with high-level security clearances is at work to prepare the JFK files for release and hopes to begin unsealing them in batches much earlier than October – possibly as early as summer.

  Beyond releasing the 3,600 never-before-seen JFK files, the Archives is reviewing another 35,000 assassination-related documents, previously released in part, so they can be unsealed in full. Short of an order from the president, Murphy said, the Archives is committed to making everything public this year: “There’s very little decision-making for us.”

  Many of the documents are known to come from the files of CIA officials who monitored a mysterious trip that Oswald paid to Mexico City several weeks before the assassination – a trip that brought Kennedy’s future killer under intense surveillance by the spy agency as he paid visits to both the Soviet and Cuban embassies there. The CIA said it monitored all visitors to the embassies and opened surveillance of Oswald as soon as he was detected inside the Soviet compound for the first time.

  Other documents are known to identify, by name, American and foreign spies and law-enforcement sources who had previously been granted anonymity for information about Oswald and the assassination. At least 400 pages of the files involve E. Howard Hunt, the former CIA operative turned Watergate conspirator who claimed on his deathbed that he had advance knowledge of Kennedy’s murder.

  The documents were gathered together by a temporary federal agency, the Assassination Records Review Board, that was established under the 1992 law. In an interview last month, its former chairman, Judge John R. Tunheim of the Federal District Court in Minnesota, said he “wouldn’t be surprised if there’s something important” in the documents, especially given how much of the history of the Kennedy assassination has had to be rewritten in recent decades.

  He said he knew of “no bombshells” in the files when the board agreed to keep them secret two decades ago, but names, places and events described in the documents could have significance now, given what has been learned about the assassination since the board went out of business. “Today, with a broader understanding of history, certain things may be far more relevant,” he said.

  Murphy, the Archives official, said she, too, knew of no shocking information in the documents – but she said her researchers were not in a position to judge their significance. “As you can imagine, we’re not reading them for that, so we’re probably not the best people to tell you,” she said. “I will say this: This collection is really interesting as a snapshot of the Cold War.”

  The Review Board, created by Congress to show transparency in response to the public furor created by Oliver Stone’s conspiracy-minded 1991 film “JFK,” did force the release of a massive library of other long-secret documents from the CIA, FBI, Secret Service and other federal agencies, as well as from congressional investigations of the assassination.

  Many showed how much evidence was withheld from the Warren Commission, the independent panel led by Chief Justice Earl Warren that investigated the assassination and concluded in 1964 that there was no evidence of a conspiracy in Kennedy’s death.

  The documents showed that both the CIA and FBI had much more extensive information about Oswald—and the danger he posed to JFK—before the assassination than the agencies admitted to Warren’s investigation. The evidence appeared to have been withheld from the commission out of fear that it would expose how the CIA and FBI had bungled the opportunity to stop Oswald.

  Under the 1992 law, agencies may make a final appeal to try to stop the unsealing of specific documents on national security grounds. But the law grants only one person the power to actually block the release: the president. The law allows Trump to keep a document secret beyond the 25-year deadline if he certifies to the National Archives that secrecy was “made necessary by an identifiable harm to military defense, intelligence operations, law enforcement or conduct of foreign relations” and that “the identifiable harm is of such gravity that it outweighs the public interest in disclosure.”

  Both the CIA and FBI acknowledged in written statements last month that they are reviewing the documents scheduled for release; neither agency would say if it planned to appeal to the White House to block the unsealing of any of the records. “CIA continues to review the remaining CIA documents in the collection to determine the appropriate next steps with respect to any previously-unreleased CIA information,” said agency spokesperson Heather Fritz Horniak. The FBI said it had a team of 21 researchers assigned to the document review.

  According to a skeletal index of the documents prepared by the Archives, some of the files appear to involve, at least indirectly, a set of conspiracy theories that Trump himself promoted during the 2016 campaign – about possible ties between Cuban exile groups in the United States and Oswald. On the campaign trail, Trump repeatedly promoted an article published last April in the National Enquirer that suggested a connection between Oswald and the Cuban-born father of Senator Ted Cruz of Texas, one of Trump’s rivals for the Republican nomination. The article was based entirely on a 1963 photograph that showed Oswald, a self-proclaimed Marxist and champion of Fidel Castro’s Communist revolution in Cuba, handing out pro-Castro leaflets in New Orleans with a man who, the tabloid suggested, was Cruz’s father, Rafael.

  The Cruz family denied that the senator’s family was the man depicted in the photo and that Rafael Cruz had any connection to Oswald; there is no other evidence of any connection.

  The National Archives index shows that the documents to be released this year include a 86-page file on a prominent CIA-backed anti-Castro exile group that Oswald appears to have tried to infiltrate in New Orleans, his hometown, in order to gather information that might be of use to the Castro government.

  Judge Tunheim said that Oswald’s trip to Mexico City in September and October 1963 figures directly or indirectly in many of the documents that remain under seal, including the internal files of CIA operatives who worked at the American embassy there.

  Historians agree that the trip, which Oswald apparently undertook in hopes of obtaining a visa to defect to Castro’s Cuba, much as he had once tried to defect to the Soviet Union, has never been fully investigated.

  “I still think there are loose threads in Mexico City that no one has ever explored,” Tunheim said. “It was a bizarre chapter – there’s no question about it.” Previously declassified CIA and FBI documents suggest that Oswald openly boasted to Cuban officials there about his intention to kill Kennedy and that he had a brief affair with a Mexican woman who worked in Cuba’s consulate. The American ambassador to Mexico at the time of the assassination said later that he believed the woman had probably been working for the CIA.

  Tunheim said the Review Board agreed to keep the Mexico-related documents secret in the 1990s at the request of the State Department, the CIA and other agencies that warned that their release could do damage to relations with the Mexico government, which worked closely with the CIA and FBI during the Cold War. “Mexico City was where everybody spied on everybody else,” the judge said.

  But given the chill in relations between the United States and Mexico following Trump’s election and early moves by his administration to build its long-promised wall along the Mexican border, a similar plea to keep the documents secret may not go very far with the new president. Said Tunheim: “I guess we don’t have much of a relationship with the Mexican government to protect anymore.”

  

  

• UC Davis Rolls Out "Morning After Pill" Vending Machines – "It Encourages Responsibility"

  The University of California at Davis has a revolutionary solution for all their binge-drinking students who find it difficult to control their primal urges after a night of frat-hopping…the ‘Plan B’ vending machine.  For $30 a box students can now flush that pesky, potentially-fertilized egg without the hassle of having to walk all the way to a pharmacy. 

  Of course, the female students on campus seem to love the idea, saying…“It’s like useful”….yeah, totally, and stuff.

  “It’s easier to take a Plan B than have to tell your parents that you’re pregnant.”

   

  “It’s like useful….so that you don’t have to go to a pharmacy…”

  Meanwhile, one parent actually told CBS Sacramento that the vending machine “encourages responsibility.”

  “It encourages responsiblity.  I mean if you mess up then you mess up.  It’s better than waiting to see if you get pregnant and have an abortion.”

  We suspect many other parents might have a slightly different definition of “responsibility”…but what do we know?
  

   

  But the machine isn’t just for emergencies…it also offers condoms for those who prefer to plan ahead.

  The vending machine was the brain child of UC Davis student, Parteek Singh, who said he came up with the idea after his “friends” had a close encounter one Friday night when the local pharmacy ran out of Plan B pills.

  “There was an incident where my friends went to the one pharmacy that was open 24/7 in town on a Friday night.  And they were all out of emergency contraceptive.”

   

  “I want to see this on every college campus.”

  What more is there to say really?
  

  

  

• "The CIA Has Been Deeply Humiliated" – Ron Paul Interviews Julian Assange

  Having blasted the Trump administration for their hyprocritical flip-flop from “loving WikiLeaks” to “arrest Assange,” Ron Paul made his feelings very clear on what this signals: “If we allow this president to declare war on those who tell the truth, we have only ourselves to blame.” Today he sits down with WikiLeaks founder Julian Assange for a live interview…

  “The CIA has been deeply humiliated as a result of our ongoing publications so this is a preemptive move by the CIA to try and discredit our publications and create a new category for Wikileaks and other national security reporters to strip them of First Amendment protections,“

  Assange said in a preview clip from the interview below…:

  TODAY at 12pm ET … Julian Assange joins me on The Liberty Report! https://t.co/ZpE9V7y7nX pic.twitter.com/gR9Y3VkktA

  — Ron Paul (@RonPaul) April 28, 2017

  //platform.twitter.com/widgets.js

  Full interview below… 
  

  

  

• The Rise Of The Generals

  Authored by Patrick Buchanan via Buchanan.org,

  Has President Donald Trump outsourced foreign policy to the generals?

  So it would seem. Candidate Trump held out his hand to Vladimir Putin. He rejected further U.S. intervention in Syria other than to smash ISIS.

  He spoke of getting out and staying out of the misbegotten Middle East wars into which Presidents Bush II and Obama had plunged the country.

  President Trump’s seeming renunciation of an anti-interventionist foreign policy is the great surprise of the first 100 days, and the most ominous. For any new war could vitiate the Trump mandate and consume his presidency.

  Trump no longer calls NATO “obsolete,” but moves U.S. troops toward Russia in the Baltic and eastern Balkans. Rex Tillerson, holder of Russia’s Order of Friendship, now warns that the U.S. will not lift sanctions on Russia until she gets out of Ukraine.

  If Tillerson is not bluffing, that would rule out any rapprochement in the Trump presidency. For neither Putin, nor any successor, could surrender Crimea and survive.

  What happened to the Trump of 2016?

  When did Kiev’s claim to Crimea become more crucial to us than a cooperative relationship with a nuclear-armed Russia? In 1991, Bush I and Secretary of State James Baker thought the very idea of Ukraine’s independence was the product of a “suicidal nationalism.”

  Where do we think this demonization of Putin and ostracism of Russia is going to lead?

  To get Xi Jinping to help with our Pyongyang problem, Trump has dropped all talk of befriending Taiwan, backed off Tillerson’s warning to Beijing to vacate its fortified reefs in the South China Sea, and held out promises of major concessions to Beijing in future trade deals.

  “I like (Xi Jinping) and I believe he likes me a lot,” Trump said this week. One recalls FDR admonishing Churchill, “I think I can personally handle Stalin better than … your Foreign Office … Stalin hates the guts of all your people. He thinks he likes me better.”

  FDR did not live to see what a fool Stalin had made of him.

  Among the achievements celebrated in Trump’s first 100 days are the 59 cruise missiles launched at the Syrian airfield from which the gas attack on civilians allegedly came, and the dropping of the 22,000-pound MOAB bomb in Afghanistan.

  But what did these bombings accomplish?

  The War Party seems again ascendant. John McCain and Lindsey Graham are happy campers. In Afghanistan, the U.S. commander is calling for thousands more U.S. troops to assist the 8,500 still there, to stabilize an Afghan regime and army that is steadily losing ground to the Taliban.

  Iran is back on the front burner. While Tillerson concedes that Tehran is in compliance with the 2015 nuclear deal, Trump says it is violating “the spirit of the agreement.”

  How so? Says Tillerson, Iran is “destabilizing” the region, and threatening U.S. interests in Syria, Yemen, Iraq and Lebanon.

  But Iran is an ally of Syria and was invited in to help the U.N.-recognized government put down an insurrection that contains elements of al-Qaida and ISIS. It is we, the Turks, Saudis and Gulf Arabs who have been backing the rebels seeking to overthrow the regime.

  In Yemen, Houthi rebels overthrew and expelled a Saudi satrap. The bombing, blockading and intervention with troops is being done by Saudi and Sunni Arabs, assisted by the U.S. Navy and Air Force.

  It is we and the Saudis who are talking of closing the Yemeni port of Hodeida, which could bring on widespread starvation.

  It was not Iran, but the U.S. that invaded Iraq, overthrew the Baghdad regime and occupied the country. It was not Iran that overthrew Col. Gadhafi and created the current disaster in Libya.

  Monday, the USS Mahan fired a flare to warn off an Iranian patrol boat, 1,000 meters away. Supposedly, this was a provocation. But Iranian foreign minister Javad Zarif had a point when he tweeted:

  “Breaking: Our Navy operates in — yes, correct — the Persian Gulf, not the Gulf of Mexico. Question is what US Navy doing 7,500 miles from home.”

  Who is behind the seeming conversion of Trump to hawk?

  The generals, Bibi Netanyahu and the neocons, Congressional hawks with Cold War mindsets, the Saudi royal family and the Gulf Arabs — they are winning the battle for the president’s mind.

  And their agenda for America?

  We are to recognize that our true enemy in the Mideast is not al-Qaida or ISIS, but Shiite Iran and Hezbollah, Assad’s Syria and his patron, Putin. And until Hezbollah is eviscerated, Assad is gone, and Iran is smashed the way we did Afghanistan, Iraq, and Yemen, the flowering of Middle East democracy that we all seek cannot truly begin.

  But before President Trump proceeds along the path laid out for him by his generals, brave and patriotic men that they are, he should discover if any of them opposed any of the idiotic wars of the last 15 years, beginning with that greatest of strategic blunders — George Bush’s invasion of Iraq.

  

  

• Is The Blockchain About To Disrupt This $7 Trillion Industry?

  Authored by Teeka Tiwari via InternationalMan.com,

  

  Recently, I wrote about a small $100,000 trade of cheese and butter.

  Why?

  This one trade changed 400 years of history in just four hours.

  How so? Normally, it would take 10 days to handle the paperwork. But this trade concluded in less than four hours.

  The solution: a blockchain platform that streamlined the entire process.

  While the trade was small, it was big for the $7 trillion trade finance industry.

  What exactly is trade finance?

  It’s when two companies in different countries want to buy and sell from each other. They use a bank to guarantee the transaction…

  For more than 400 years, trade finance hasn’t changed much. It requires a mountain of paperwork. And all the parties involved spend a lot of time proving that they truly own what they say they own.

  But that’s all about to change.

  Today, we show you how the blockchain is changing the inefficient trade finance industry. And we’ll show you how to profit as well.

  How the Blockchain Is Disrupting Trade Finance

  The trend in blockchain and trade finance is accelerating.

  In February 2017, a cargo shipment containing $25 million worth of African crude steamed its way to China.

  The merchants involved sold the oil three times during the trip. Banks, agents, inspectors, and a commodity trading firm were all involved.

  The traditional analogue solution involved hundreds of documents. And it took at least three hours to complete each trade.

  But on this trip, each trade took less than 25 minutes.

  The name of the project that made a 25-minute trade possible is Easy Trading Connect. It’s a partnership between Société Générale and ING.

  And it works by moving the transactions to a private version of the Ethereum blockchain.

  This particular transaction involved ING, Société Générale, and commodity trading house Mercuria.

  

  Saving time wasn’t the only benefit of the trade.

  ING reported that trader efficiency improved by 33%. And Marco Dunand, CEO of Mercuria, stated the blockchain reduced costs by 30%.

  The blockchain is a savior for this manually intensive, paperwork-heavy process.

  Physical documents have always been a problem. It opens up transactions to human error, fraud, and delays.

  With the blockchain, all documents get digitized. That makes documents safer to move around. And it solves a lot of paperwork problems.

  For example, Mercuria sold the oil heading to China three times before it arrived. Because of the blockchain, Mercuria, ING, and Société Générale all had access to real-time data. No one had to go searching for the original source documents.

  Further, they were able to “auto-check” documents on a computer rather than doing it manually. That makes for a smooth process.

  There’s a huge incentive to move to the blockchain. Santander estimates the blockchain will cut trade finance costs up to $20 billion.

  What to Do Next

  Easy Trading Connect proves the blockchain works to conduct business.

  And the benefit of the blockchain in trade finance is obvious.

  This is just getting started. Venture capital firms and financial institutions are pouring millions of investment dollars into the blockchain.

  Right now, over 50 major financial institutions have in-house blockchain projects or relationships with blockchain startups.

  Do you want exposure to the burgeoning blockchain bull market? The simplest way would be to buy a small amount of bitcoin.

  Many new blockchain applications base their network on the bitcoin blockchain. And you need bitcoin to buy most other coins.

  Doug Casey: As you probably know, I've been involved in the investment world going back to the '70s.

  I've been pitched by "experts" on all kinds of investments. But for the most part, I've stuck to what I know best – investing in precious metals and real estate when I see a bubble forming, and getting out before it pops.

  So you may be surprised to hear that I've recently become interested in a new asset class: cryptocurrencies.

  I'm talking about Bitcoin and its offshoots.

  At a recent investor's conference in Miami, I heard a presentation about this little-known market from a former hedge fund manager named Teeka Tiwari.

  Teeka is extremely well-connected in this market, traveling all over the world meeting with experts.

  He explained that over the past year, this market has taken off. Dozens of "cryptos" have shot up 1,000%, 5,000%… even 10,000% or more.

  This got my attention.

  I know a bull market when I see one… It seems to me that a marvelous bubble is building up in this area. And it's one that I would like to take advantage of.

  *  *  *

  Tonight at 8 p.m., Teeka Tiwari will host a free cryptocurrency question-and-answer session. You can submit your questions and watch the Q&A session by clicking here. But you must act soon… Anyone who joins his service by midnight will receive $100 in bitcoin.

  

  

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• Retired Green Beret Warns: "We're At The Threshold Of War…The Choice Is Not Up To Us Anymore"

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

  

  As reported Monday, April 25 on almost all mainstream and alternate news sites, Britain’s Defense Minister Michael Fallon has openly declared that his country will carry out a preemptive nuclear strike even if not attacked, as such:

  “In the most extreme circumstances we have made it very clear that you can’t rule out the use of nuclear weapons as a first strike.”

  Michael Fallon, BBC Today, 4-25-17

  This is very serious and no longer simply rhetorical, as the Russians responded to the effect that the UK could be wiped off the face of the globe if they were to provoke the wrong party.  The U.S. now has a submarine in position in South Korea that is carrying Tomahawks armed with nuclear warheads and the American Naval armada continues to sail toward the region.  The North Koreans have been conducting artillery drills, as South Korea and Japan are preparing their citizens for war to break out.  The United States just test-launched an ICBM from California that splashed into the South Pacific.

  In the U.S., President Trump has convened a meeting in the White House for all 100 U.S. senators as reported yesterday throughout the alternative media.  The mainstream media (MSM) is being notoriously silent about the whole matter, although it is plain to see the focal point of the meeting is North Korea, as announced by the White House.

  Deflection has been rendered partially by the MSM by the endless barrage regarding the 9^th Circuit Court trying to sabotage the Executive Order signed by the President to withhold federal funding from “sanctuary” cities trying to circumvent federal law and procedure with the illegal aliens.  The “First 100 Days” of the Trump Administration is the new catch-phrase the MSM is focusing upon, much as they did with the “47 million on food stamps” phrase that virtually stayed the same for more than 3 years.  Underreporting and obfuscation (if not outright lies) are the MSM’s way of keeping the public in the dark nationally and globally.

  In the meantime, the Russians are beginning to redeploy ground troops to Syria.  It appears that the U.S. is going to be pushed into a war in one theater or another by the progressives masquerading as conservatives.  This brings to mind the ratiocination for the initiation of hostilities in either theater.  For North Korea, it is simple: The North Koreans are one of the three nations not involved in the global banking cartel.  In addition, a war will increase U.S. hegemony in the area regardless of what happens to South Korea or Japan in the aftermath.

  Regarding Syria, the Obama administration started a proxy/indirect war with Russia over Syria, with Russia backing Bashar al-Assad and the United States its own “created boogeyman” of ISIS/ISIL.  Obama did not take Russia on directly, and Russia out-maneuvered him by suggesting he fight against his own creation…which he did…and then the Russians bombed the daylights out of them.  Russia then declared the bombing campaign to be over and did a “drawdown,” while still leaving enough of a force to deter Obama, who fizzled out in pusillanimous splendor.

  Syria is still on the table, though, because we don’t have that pipeline running out of Qatar through Northwestern Syria to cut off Gazprom and the Russians from supplying Europe with natural gas.  In addition, the House of Saud wants Assad out of Syria, and in addition to this, the U.S. needs to take Syria if it wants (and it does want) to invade Iran.  The Russians bombing ISIS/ISIL prevented any more oil from being stolen from Northwest Syria and trucked across the border, where it was sold to Erdogan and his brother.

  The Military Industrial Complex (MIC) and their paid-for congressmen and senators (such as McCain, Graham, Ryan, ad infinitum) are the ones who stand to benefit, either in stocks held or in kickbacks to either advance or snafu legislation or policy (depending on which benefits the firms).  They did it with Ukraine, as well, but the threat of directly confronting Russia was as good as an orchiotomy for Obama, and we have a stalemate between the U.S.-created Kiev government of Poroshenko and the separatists of the Eastern Ukrainian provinces.

  The powers that be are intent on having a war, regardless of the consequences and effects on noncombatants.  A war would also be a way to prop up the administration’s flagging ratings.  Domestically we have not emerged from the “soft” police state and liberal “legislative” powers of the Courts to remake Constitutional law and circumvent Congress and the President through selective interpretation of anything and everything: These things are the true “legacy” of Obama.

  Now, where from there?  We are at the threshold of another major war that could erupt in any of these areas.  The choice is not up to us anymore, and it is surely being decided upon at this very moment.

  

  

• Trump Calls Schumer's Bluff: "If There's A Shutdown, There's A Shutdown… Democrats Would Be To Blame"

  With Democrats seemingly unsatisfied with Republicans dropping border wall funding and adjusting on Obamacare-related items, it appears President Trump is calling Schumer's and Pelosi's bluff, proclaiming "If there's a shutdown, there's a shutdown," adding that Democrats would be to blame if the federal government was left unfunded.

  Schumer today:

  • *SCHUMER: TRUMP CONCESSIONS BRING SPENDING DEAL CLOSER TO FINISH
  • *SCHUMER SAYS 'SOME STICKING POINTS' LEFT ON SPENDING BILL TALKS
  • *SCHUMER SAYS REVISED GOP HEALTH CARE BILL 'WORSE' THAN INITIAL
  • *SCHUMER SAYS ISSUE OF POISON PILL RIDERS STILL OUTSTANDING

  Pelosi added:

  • *HOUSE DEMOCRATIC LEADER PELOSI SAYS WALL FUNDING ONE ISSUE
  • *PELOSI: UNCERTAINTY RE OBAMACARE COST-SHARING PAYMT ALSO ISSUE
  • *PELOSI: TYING STOPGAP SPENDING TO HEALTH BILL WOULD BE STUPID

  And so, as Reuters reports, President Donald Trump downplayed the severity of a potential government shutdown, making it clear who will be to blame…

  "We'll see what happens. If there's a shutdown, there's a shutdown," Trump told Reuters in an interview, adding that Democrats would be to blame if the federal government was left unfunded.

   

  Trump added that a shutdown would be a "very negative thing" but that his administration was prepared if it was necessary.

  As part of the budget negotiations, Democrats have called for financial support to prop up Puerto Rico's Medicaid program covering health insurance for the poor, but many Republicans are opposed to the idea. Trump also said it would be unfair to offer a debt bailout to Puerto Rico, a U.S. territory, because it was unfair to people in U.S. states.

  "I don't think that's fair to the people of Iowa, and I don't think it's fair to the people of Wisconsin and Ohio and North Carolina and Pennsylvania that we should be bailing out Puerto Rico for billions and billions of dollars," Trump said. " No I don't think that's fair."

  Notably, while equity markets are whistling complecentlypast the graveyard, USA sovereign risk has surged back to its highest (relative to Germany) since Trump's election as the threat of a government shutdown gets priced into a non-manipulated market…

  

  

  

• Asylum Seekers Fleeing The U.S. For Canada May Find A Frigid Reception In Canadian Courts

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

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

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

  

   

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

  Meanwhile, as Reuters points out today, Migrants who applied for asylum in the United States but then fled north, may have miscalculated in viewing Canadian courts as a more lenient jurisdiction.  That is because their time in the United States could count against them when they apply for asylum in Canada, according to a review of Canadian federal court rulings on asylum seekers and interviews with refugee lawyers.

  But Canadian refugee tribunals are wary of “asylum-shopping” and look askance at people coming from one of the world’s richest countries to file claims, the refugee lawyers said.

   

  “Abandoning a claim in the United States or coming to Canada after a negative decision in the United States, or failing to claim and remaining in the States for a long period of time – those are all big negatives. Big, big negatives,” said Toronto-based legal aid lawyer Anthony Navaneelan, who is representing applicants who came to Canada from the United States in recent months.

   

  The asylum seekers will make their cases before Canada’s refugee tribunals, which rejected 5,000 cases last year. The tribunals’ decisions are not made public, so the reasons are not known. An Immigration and Refugee Board spokeswoman confirmed, however, that an applicant’s time in the United States can be a factor in a tribunal’s decision.

  Those with failed U.S. asylum claims must prove to Canadian tribunals that the U.S. courts were wrong in their assessment, that their circumstances have changed for the worse, or that they qualify in Canada, several lawyers said.  Crucially, all applicants must also show that the often years-old fears that led them to leave their home countries for the United States still exist.

  “The longer they’ve been away (from their country of origin), the more difficult it is to establish that they’re a refugee,” said Winnipeg refugee lawyer Ken Zaifman.

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

  

  

• The Next Trade War: Trump Threatens To Terminate "Horrible" Trade Deal With South Korea

  Two days after launching a trade war with Canada by imposing tariffs on lumber imports, one day after nearly terminating NAFTA (but stopping just shy after an alleged phone call from the leaders of Mexico and Canada), Trump has finally turned his attention to the one nation whose GDP consists of roughly 60% net trade, and which we said several months ago, is far more likely to be punished for trade malpractice than China: South Korea.

  Speaking to Reuters and WaPo, Trump – who earlier also told Reuters that a “major, major” conflict with North Korea is possible – Trump sharply criticized the U.S.-Korea Free Trade Agreement, known as Korus, the latest version of which was ratified in 2011 and said that he will “renegotiate or terminate” the “horrible” free trade deal. Next week marks an anniversary for Korus and triggers a review period to potentially renegotiate or ratify a new version of the agreement.

  “It’s a horrible deal. It was a Hillary Clinton disaster, a deal that should’ve never been made,” Trump said. “It’s a one-way street.”

  “We’ve told them that we’ll either terminate or negotiate,” Trump said. “We may terminate.”

  Trump added: “I will do that unless we make a fair deal. We’re getting destroyed in Korea.”

  On his trip to Asia last week, Vice President Pence said to an audience of business leaders in Seoul that the United States was looking to “reform” the Korus agreement because U.S. businesses “face too many barriers to entry, which tilts the playing field against American workers and American growth.”

  The president explained that the process of termination of Korus is simpler than with the North American Free Trade Agreement. “With NAFTA, we terminate tomorrow; if we did, it ends in six months. With the Korean deal, we terminate and it’s over.”

  * * *

  Trump also said he wants South Korea to pay for the recent $1 billion deployment of the U.S. Terminal High Altitude Area Defense, or THAAD battery, a missile defense system deployed to South Korea to protect against accidental North Korean launches, and to antagonize China.

  Hyundai Motor shares fell as much as 2.4% after Trump’s comments, while the South Korea’s won also dropped on the comments. South Korea’s automakers association said it was concerned about the possible revision of the country’s trade deal with the United States, an official of the industry group said on Friday. 

  “We are worried about the uncertainty of the deal,” Kim Tae-nyen, vice president at the Korea Automobile Manufacturers Association (KAMA), told Reuters by telephone.

  As Reuters followed up, a senior South Korean finance ministry official said the country has not yet received official requests on renegotiation of its free trade pact with the United States.

  “Talk and actual policy are different,” the official told Reuters. “They have not requested anything from us so we’ll have to wait and see.”

  Trump’s aggressive trade stance was unveiled as tensions are rising on the Korean Peninsula and as South Korea’s increasingly more irrational neighbor is proving to be a major source of instability, and thus leverage for any future Trump negotiations.

  

  

• Who Really Controls The Gold Price? (The Answer Is Quite Surprising)

  Via SRSroccoReport.com,

  There’s this notion put forth by the majority in the precious metals community that the Fed and Central Banks control the market price of gold.  I have even heard that some analysts believe the Fed could push the gold price any where they saw fit…. even to zero.  While I agree that the Central Banks do play a role in gold market intervention, they most certainly CANNOT push the price of gold anywhere they want.  This is an absolute falsity…. and I have the data to prove it.

  To understand how the market determines the price of gold, we must first dismiss the economic principle of SUPPLY & DEMAND.  While supply and demand forces are factors in the short-term price movement of gold, they do not really factor all that much over the longer term.

  Here is a chart showing the relationship of the gold and oil price since the 1940’s:

  

  The gold price is in DARK ORANGE while the oil price is in BLACK.  We can plainly see the price of gold and oil have moved in tandem, especially after Nixon dropped the Dollar-Gold peg in 1971.  While the oil-gold price movements are not exact, they parallel each other quite nicely.  Thus, when the oil price skyrocketed during the 1970’s, so did the gold price.  The same thing took place in the 2000’s.

  Interestingly, the same thing took place with the silver price below:

  

  In both of these charts, the volatility in the oil, gold and silver price increased significantly after 1971.  There was an underlying reason for this… and it just wasn’t the dropping of the U.S. Dollar convertibility into gold in 1971.  It was also due to the fact that the United States peaked in domestic cheap oil production in 1970.  This was actually the peak of the U.S. Empire, even though we have continued to dominate the world by exchanging PAPER (U.S. Treasuries) for physical OIL-GOODS.

  So, if we look at these two charts above, we can plainly see the oil price was more the LEADING DRIVER in the gold and silver price than were supply and demand forces.  Again, supply and demand forces add volatility to the gold and silver price over the short-term, but the energy cost (mainly oil) has been the leading driver over the longer term.

  Who Really Controls The Gold Price??

  If the gold price has paralleled the oil price, then who really controls the gold market price??  While I agree that the Fed & Central Banks are intervening in the gold market, they can really only control the UPWARD movement in the price of gold.  Why?  Well, if we look at the chart below, we find our answer:

  

  This chart shows the difference between the total production cost of the top two gold miners, Barrick and Newmont, versus the annual average gold market price.  The chart clearly shows that the production cost is always less than the gold market price.

  In the early 2000’s, the top two gold miners production cost was closer to the market price.  However, after the U.S. Housing and Banking Market collapsed in 2008, the gold market price moved up considerably higher than the cost of production.  My analysis suggests that the gold price was starting to head towards its high-quality STORE OF VALUE properties, rather than its COMMODITY PRICING mechanism.

  NOTE:  I determined Barrick & Newmont’s production cost by using my Net Income & Adjusted Income approach.  This is much different than going by either Cash Costs or All-In-Sustaining Costs.  My estimated total production cost includes more items such as taxes-interest expense and etc, that are not considered in cash costs or all-in-sustaining costs.

  Also, cash costs are a totally bogus metric as they deduct the miners by-product revenue to arrive at a very low cash cost.  They list them as by-product credits —  other metals extracted and produced along with gold in the process.  However, they are not really credits.  These miners need these by-product metal sales to fortify their balance sheets.  Without them, many mining companies would be suffering losses, not profits.

   

  Thus, a credit is something that one does not need… it’s a plus.  In reality, most of these mining companies need their by-product metal sales to remain profitable.

  That being said, here are some examples of the Barrick and Newmont’s cost of production versus the gold market price:

  2000 Production Cost = $276

  2000 Market Gold Price = $279

  2012 Production Cost = $1,272

  2012 Market Gold Price = $1,669

  2016 Production Cost = $1,113

  2016 Market Gold Price = $1,251

  Now, the reason the production cost at Barrick and Newmont has fallen from $1,272 in 2012 to $1,113 in 2016, is mainly due to the 50%+ decline in the price of oil.  It takes a lot of energy to produce an ounce of gold.  Oil was trading over $100 in 2012, but fell to $45 in 2016.  Even though the energy cost has fallen significantly, labor costs have not declined all that much in the gold industry.

  For instance, Barrick’s labor payroll per ounce of gold only declined from $328 in 2012 to $304 in 2015.  This is only a 7% decline in labor cost even though oil price dropped considerably in 2015:

  

  On the other hand, the lower gold price has put more stress on Barrick’s financial bottom line as their payroll accounted for 26% of each gold ounce produced in 2015 compared to only 18% in 2009.  Investors need to realize it takes a massive amount of energy, labor, materials and capital to produce an ounce of gold.

  If we look at the Barrick-Newmont Production Cost vs. Gold Price chart above, we see that the market price was never lower than the production cost.  Which means, the market or Central Banks did not push the gold price below the cost of production.  This is an important factor to understand when you listen to analysts suggesting that the Central Banks can rig the gold price down to whatever level they desire.

  That is total BOLLOCKS…..

  As, I have mentioned, the Fed and Central Banks can intervene in the market to control HOW HIGH the gold price will go.  That is the big difference.  So, those who continue to believe Harry Dent’s forecast that gold will go down to $700 an ounce, aren’t considering the COST OF PRODUCTION.  Harry Dent spends a lot of money advertising to get people to buy his books or newsletters.  Touting a $700 gold price gets people motivated in buying what he sells.

  Unfortunately, Dent, like most analysts, tend to leave out the energy in their forecasts.  This is truly hilarious as energy is the leading driver of our economies… not supply-demand or finance

  The Production Cost Of Gold Is Higher When We Consider Capital Expenditures

  My Net Income & Adjusted Income approach for determining the production cost of gold (and silver) provides a much more realistic metric than the industry’s “cash costs” or “all-in-sustaining costs.”  However, when a mining company releases its income statements, they do not include their capital expenditures (CAPEX).  Their net income (or adjusted income) does not include capital expenditures.  To find out what they paid in CAPEX, we must look at the Cash Flow Statements.

  If we consider what Barrick and Newmont spent on CAPEX and then deducted it from their cash from operations we would arrive at their FREE CASH FLOW:

  

  From 2000 to 2016, these top two gold miners free cash flow was a net $10 billion.  If we compare their free cash flow of $10 billion to the total $220 billion in revenues, it only accounted for 4.5% of their revenues.  Thus, Barrick and Newmont’s free cash flow shows that it cost more to produce gold than was shown in their Annual Income statements.  Which means, these gold miners still enjoyed positive free cash flow during this time.

  NOTE:  In order to consider some unwise capital expenditures during the years when the gold price really surged, I subtracted from each company, their lowest negative free cash flow that year.  Actually, this was about $5 billion when we add them both up.  So, in all reality, the free cash flow of $5 billion (half of the $10 billion shown in the chart above) means that Barrick & Newmont only enjoyed a 2%+ free cash flow margin compared to their total revenues.

  Regardless, the gold market price was still higher than Barrick and Newmont’s small free cash flow margin to total revenue.  Of course, if we include stock dilution as well as dividend payouts, these two gold miners would have an even higher production cost.  But, that would still not change the overall production cost all that much.

  As I have stated in many interviews and articles, the Fed and Central Banks CANNOT push the gold price wherever they see fit.  The algorithms are electronically calculating the gold market price based on its cost of production.  The only way the Fed and Central Banks can control the gold price is on its way UP.  This is by using a massive amount of paper contracts to cap the gold price from moving up too high.

  The majority of Fed and Central Bank intervention is controlling where investors put their money.  By funneling the massive amount of money printing into STOCKS, BONDS and REAL ESTATE, 99% of investors (in the market) remain happy, as well as the governments.  We must remember, local, state and the Federal Govt receive tax revenues are based on high stock, bond and real estate values.  Once their values implode, so do government tax revenues.  This would be a complete disaster.

  Lastly, the present COMMODITY PRICING mechanism of gold will transition to its high quality STORE OF VALUE when the U.S. and Global Oil industry really starts to disintegrate.  This gold value transition will be the first in history.  Why?  Because gold was still valued the same after the Roman Empire collapsed… due to the fact that it was based on human and animal labor.

  Unfortunately, today the gold price is being based on the energy in oil.  However, when the oil industry collapses, there is nothing to replace it.  Thus, the value of most paper assets will plummet.  Gold and silver will become stores of economic energy because the world was brainwashed into believing PAPER ASSETS will always retain their value…. not so.

  

  

• Home Prices Continue To Surge Sparking Fears Of Bubble 2.0

  With each passing day, and each new financial bubble, it becomes more and more difficult to figure out what exactly is “normal.”  That said, we can say with near certainty that home prices are not supposed to behave like this:

  

   

  Home prices in markets that bubbled over back in 2006/2007, like Las Vegas and San Francisco, got cut in half in 2009 but have since doubled again of their lows.  Meanwhile, markets like Denver and Dallas that didn’t participate as much in the 2007 mania are now surging to all-time highs, with Dallas prices up 55% over the past 5 years.

  Even the 20-City Composite Cash-Shiller Index shows that average prices have surged 44% off their lows and are nearly back to their 2007 peak.

  

   

  As the Wall Street Journal points out today, some of the home buying behaviors of consumers, like paying prices well above appraisal values and waiving home inspections, are starting to be eerily reminiscent of 2006.

  In some markets, bidding wars are breaking out. Agents said some buyers are kicking in extra cash when properties don’t appraise for the asking price, and some are waiving their right to home inspections.

   

  “It can’t be sustained,” said David Berson, chief economist at Nationwide Insurance and a former chief economist at mortgage giant Fannie Mae, referring to the frenzied buying. “It can’t go on forever.”

  Per the chart below, homes in a dozen major markets have increased over 50% off their 2012 lows while many have already exceeded their previous bubble peeks.

  

   

  Meanwhile, there are other signs of overexuberance as well including surging levels of licensed Realtors all chasing a quick buck.

  The number of licensed Realtors has jumped by nearly 25% since 2012, hitting a nine-year high in 2016 and sitting just 9% below the peak in 2006, according to real-estate consultant John Burns.

   

  In Denver, homes are selling briskly. The median number of days that homes spent on the market declined to eight in the first three months of the year from 61 in 2012, according to Redfin. Home prices rose 8.5% in Denver over the year ended in February, according to Case-Shiller.

   

  Nicki Thompson, an agent in Denver, said she recently had a listing that was on the market for two weekends at $1.2 million and she received multiple all-cash offers above the listing price.

   

  “It’s just crazy,” she said.

   

  Martin Mata, a Redfin agent in Denver, said his buyers often will commit to kicking in extra cash if the bank’s appraisal comes in lower than the purchase price. “We’ve got to be coming close to a plateau for prices,” he said.

  But perhaps the scariest warning of all comes from the number of economists who were all too eager to reassure the WSJ that all is well.

  With little risk of a supply glut in the near future, economists generally expect prices to continue rising quickly in most markets for a couple more years, if the economy keeps expanding.

   

  They said it is more likely that overheated markets are headed for a long period of flat or slightly declining home prices, especially if mortgage rates rise or job growth slows, but not an outright crash.

   

  The market “is not going to burst, it’s going to contract” with falling sales volume, said Nela Richardson, chief economist at Redfin, a real-estate firm. “You might still see what looks to be a robust market because prices are really strong, but that doesn’t mean it’s a broad market.”

  Alas, we’re sure the economists are right this time around.

  

  

• Germany Braces For Wave Of Migrant-Fueled Terrorism Lawsuits – 200 So Far This Year

  Thanks to the influx of migrants, Germany’s Department of Terrorism Crime is expecting 500 – 600 lawsuits related to Islamic Terrorism in 2017. Last year there were 250 such terrorism-linked cases, up from 68 in 2013, according to general prosecutor Peter Frank.

  The influx of migrants and refugees in recent years is a major cause of this development , said Frank. “There you can see what has come to us, both in the past few years, as well as escaped or has come from all countries to Islamic terrorists.”

  According to this, the proportion of procedures with an Islamic background is explosive: it currently accounts for 85 to 90 per cent, four or five years ago it still lay at 50 to 60 per cent. The rest is attributable to legal or left-wing extremists and nationalists. –T-Online.de (translated)

  Moreover, Germany’s President of the Federal Office for the Protection of the Constitution, Hans-Georg Maaßen said that there are at least 10,000 Salafist extremists roaming around Germany, with at least 1,600 considered at extremely high risk for terrorism. Every day, two to four threats are received by the OPC.

  Violence among extremists has increased. Maaßen complained that the development culminated last year in five terrorist attacks in Germany. Of the perpetrators, however, only the assassin from the Berlin Christmas market had been noticed before, the other assassins did not. Just a lot of young people often radicalized themselves in secret. (Translated)

  Coincidence? Germany’s admission of migrants seeking asylum leads the pack:

  And some are saying Angela Merkel has single handedly destroyed German culture by allowing the greatest number of Islamic migrants of any country in the EU:

  And surprise, surprise – crime is spiking:

  The Telegraph reports that the crime rate in Germany among ‘refugees, asylum-seekers, and illegal immigrants’ rose by more than 50% last year, and had “increased disproportionately” even when the “huge influx” of refugees entering the country under Merkel’s opern-door refugee policy was taken into account.

  “The proportion of foreign suspects, and migrants in particular, is higher than the average for the general population.”

  Also interesting to note:

  While the general crime rate in Germany fell slightly last year, Islamist-inspired crime rose by 13.7 per cent, according to the figures. -Telegraph

  This echoes what Breitbart reported last May – migrants in Germany are committing a vastly disproportionate number of crimes, and account for almost the entirety of the increased crime-rate since 2014.

  The data reveals that without migrants considered, crime rates in Germany would have remained roughly static since 2014. –Breitbart

  It is unclear whether victims in the increasing number of terrorism-related lawsuits are able to sue the German government or just the perpetrators, however the prospect of Germany being held financially accountable for Merkel’s refugee program would add a completely new dimension to the costs of this ill-fated experiment in forced migration.

  And as the United States considers the prospect of resettling Syrian immigrants – which “has to be part of the discussion” per the increasingly influential and effervescent Ivanka Trump’s statements this week, let’s consider the best use of resources per Stefan Molyneux (who hosts insightful and often lengthy “Freedomain Radio” podcasts):
  

  For the cost of resettling 10,000 refugees in the United States – 121,797 can be resettled in the Middle East. #MuslimBan pic.twitter.com/W6WLMaots9

  — Stefan Molyneux (@StefanMolyneux) January 29, 2017

  //platform.twitter.com/widgets.js

  And if you think the spike in German lawsuits over terrorism are bad, just imagine what an influx of migrants would do to the US legal system… Better Call Saul.

  

• Trade War, Round 2: Boeing Accuses Bombardier Of Dumping Jets; Canada Retaliates

  Just days after the US Commerce Department imposed duties averaging 20% on Canadian softwood lumber, accusing Chinese timber companies of getting an unfair government subsidy, on Thursday round two of the trade war between the US and Canada broke out when Boeing asked the U.S. Commerce Department to investigate dumping, subsidies and unfair pricing for Canadian planemaker Bombardier’s new CSeries airplane, a competitor to the Boeing 737, confirming that the trade tensions between the two neighboring countries are set to get far worse.

  Specifically, the Chicago-based aerospace giant has asking the International Trade Commission to rule that it has suffered injury to its business at the hands of Bombardier and to recommend that the Commerce Department impose duties on the Canadian jet builder (amusingly, Boeing also complained about the very existence of Bombardier itself, a company which has been aggressively bailed out by the Canadian government as recently as October 2015, when in exchange for $2.5 billion in taxpayer funds, the company fired 7,000 Canadian workers).

  In its petition, Boeing said that Bombardier, determined to win a key order from Delta Air Lines after losing a competition at United Airlines, had offered its planes to the airline at an “absurdly low” $19.6 million each, well below what it described as the aircraft’s production cost of $33.2 million. “Propelled by massive, supply creating and illegal government subsidies, Bombardier Inc has embarked on an aggressive campaign to dump its CSeries aircraft in the United States,” Boeing said in its ITC complaint.

  A comparable 737-700 model by Boeing has a list price of $83.4 million, with the new 737-MAX 7 priced at $92.2 million. While sales discounts from list prices are typically 40 percent to 50 percent in the industry, another question is just how much of that price is courtesy of the implicit taxpayer subsidy of the Ex-Im bank, but that is a topic for another post.

  The spat between the two companies came to a climax in April 2016, whe Bombardier won the Delta order, its biggest yet, for 75 CS100 jets, worth an estimated $5.6 billion based on the list price of about $71.8 million.  And now that Trump has given the green light to challenge Canadian trade competitors, Boeing is certainly not wasting time.

  In its complaint against Bombardier, Boeing argued that the CSeries program would not exist without hundreds of millions of dollars in launch aid from the governments of Canada, Quebec and Britain, nor the abovementioned $2.5 billion equity infusion from Quebec in 2015.

  Boeing wasn’t finished: the company also took a shot at European rival Airbus, which it accuses of benefiting from similar “unfair” government subsidies in a long-running dispute before the World Trade Organization.

  “Evidently taking a page out of the Airbus strategy book, Bombardier has blatantly and intentionally demonstrated its goal of muscling its way into the U.S. aviation market by offering its heavily subsidized planes at cut-rate pricing,” Boeing said.

  A Commerce Department spokesman told Reuters that the petition would be given “a thorough review” and further comment was premature.

  In recent week, Commerce Secretary Wilbur Ross has taken swift action to protect the U.S. steel and aluminum industries from foreign competition, launching national security investigations that could lead to import restrictions. An investigation could lead to duties on the aircraft to offset any below-cost pricing or any subsidies deemed unfair.

  Shortly after the complaint was filed, the Canadian government issued a statement objecting to Boeing’s allegations and noted that the CSeries has many U.S. suppliers, including for engines, and supports thousands of U.S. jobs. “The Government of Canada will mount a vigorous defense against these allegations and stand up for aerospace jobs on both sides of the border,” it said. Full statement below:

  The Government of Canada today made the following statement regarding the filing of a petition by Boeing Aerospace Corporation with the United States Department of Commerce, alleging the dumping of Bombardier aircraft in the United States market:

   

  “The Government of Canada objects to the allegations made by Boeing. We are confident that our programs are consistent with Canada’s international obligations.       

   

  “The aerospace industries of Canada and the United States are highly integrated and companies on both sides of the border benefit from this close partnership. For example, many C Series suppliers are based in the United States and it is projected that more than 50 percent of the components for the C Series, including the engine, will be supplied by American firms directly contributing to high quality jobs in that country. The C Series is a great example of how the North American industrial base can develop and produce a globally competitive product with industry-leading clean technologies.

   

  Bombardier also has a significant presence in the U.S. across its aerospace and transportation divisions, directly employing more than 7,000 workers. In addition, the company works with more than 2,000 suppliers headquartered in states across the country thereby generating thousands of well-paid, high-tech American jobs.

   

  “The Government of Canada will mount a vigorous defence against these allegations and stand up for aerospace jobs on both sides of the border.”

  Curiously, Bombardier’s chief executive conceded the company had been “aggressive” on pricing in order to win, and sources familiar with the deal pegged the discount closer to two-thirds off the nominal list price. It added that it was reviewing the petition and structures its dealings to ensure compliance with all relevant laws.

  * * *

  In a separate development, Premier Christy Clark of British Columbia, wrote a letter to Canadian Prime Minister Justin Trudeau Wednesday asking him to ban coal shipments from the U.S., sending shares of US coal giant Cloud Peak Energy (among others) tumbling. According to Bloomberg, Clark’s demand was in response to Trump’s lumber tariffs. Trudeau said he would consider the request “carefully and seriously.” Some context: a little over 6 million metric tons of U.S. thermal coal were shipped through the port of Vancouver in 2016.

  Needless to say, it would be especially absurd if as a result of Trump’s Canadian tariffs, it is the US coal mining industry – the one which the president vowed to reincarnate – that suffers the most.

  And now, we sit back and wait for round three in the increasingly hostile trade wars between the US and its peaceful northern neighbor.

  

  

  

• Are Oil Prices To Blame For The Venezuelan Crisis? (Spoiler Alert: Of Course Not!)

  Authored by Daniel via The Mises Institute,

  Many analysts are venturing to link the crisis that plagues the Venezuelan economy with the fall in the price of crude oil. With oil being one of the most important commodity in Venezuelan production and the country’s main export product, it seems that the fall in the price would bring any country with an economic structure similar to Venezuela’s into a crisis. Similarly, many assume that the problems in Ecuador have the same root as those in Venezuela, although less pronounced.

  Certainly, one of the markets that has seen the most movement lately is oil. The price of an oil barrel today is 50% less than what it was in mid-2014. The price increased 47% in 2016.

  

  Venezuela’s Export Importance Put into Context

  We intend to analyze how the fall of oil prices affected its major exporters, among them Venezuela.

  From the viewpoint of exporting importance, it seems that there are many countries with net oil exports higher than Venezuela’s. In fact, Venezuela is the world’s 9^th largest exporter. Russian exports almost triple those of Venezuela and Saudi exports are five times larger.

  

  Source: The World Factbook CIA.

  However, the important factor to analyze the economic impact of the fall of crude oil prices in exporting countries is not absolute exports; but rather it is the measure in terms relative to the size of the economy. If we consider the relative importance of oil exports as a percentage of GDP, Venezuela does not appear among the first places either.

  

  Source: World Bank; The World Factbook CIA.

  In this case, Venezuela ranks 8^th in relative export importance, far from the most important countries. Angola, Kuwait, and Iraq’s exporting importance more than triple that of Venezuela when it comes to oil.

  The economic impact of falling oil prices

  Both 2015 and 2016 have been difficult years for the economies of oil-exporting countries. After the price of oil barrels fell in the last quarter of 2014, economies dependent on black gold have suffered significant declines in economic performance, as was expected.

  

  Source: IMF; St. Louis Federal Reserve.

  The reported economic growth is an unweighted arithmetic mean of the 15 countries analyzed previously.

  Although economic growth fell on average among all major oil-exporting countries, the impact of the fall of crude oil prices has been different in each economy. In theory, those economies more dependent on oil, such as Angola or Kuwait, would suffer the harshest declines in economic performance. However, the data does not support this thesis. Venezuela and, to a lesser extent, Russia have been the most affected.

  

  Source: IMF.

  The graph of economic growth by country shows two trends:

  1)The countries with less exposure to oil prices have less volatile economic growth.

  This trend is expected. Therefore, we see how the left part of the graph—where the countries with less oil exposure are located — show less volatility in economic growth than those countries on the right side of the graph — countries with the highest exposure.Those countries with less than 5% exposure to the oil market have been affected only slightly by the price of oil. The United Kingdom, Mexico, and Canada suffer to a lesser extent the falls in crude oil prices.

  2) Countries with the worst economic performance are not those that have the most exposure to the oil market.

  This trend is not what was expected. In this sense, two countries stand out: Venezuela and Russia. They are the only two countries that were in recession throughout 2015 and 2016; Russia being the 11^th country with relative export importance and Venezuela the 8^th.

  The economic crisis is especially serious in Venezuela. It is the only country from the whole group that was in recession in 2014, 2015, and 2016. Moreover, Venezuela has the most serious recession with a 10% drop in GDP in 2015 (Nigeria fell by 1.7% and Russia only 0.8%).

  If we compare Venezuela’s economic growth with that of other oil-exporting countries we can see the serious divergences that this article points out.

  

  Source: IMF

  The True Cause of Venezuela’s Economic Collapse

  Venezuela is undergoing the typical collapse of a country that has been subject to years of all kinds of political interventions. The fall in oil prices is the external shock that brings to light the embarrassing result of years of price controls, currency controls, nationalizations, uncontrolled monetary creation, and economic dirigisme.

  The economic imbalances that had accumulated over the years were hidden under the influx of dollars that incidentally came from oil revenues that grew in value, and not in volume. Lack of investment and low productivity per worker are the usual trend for Petroleum of Venezuela (PDVSA). The ability to increase production in order to counter the fall in oil prices is zero.

  

  Source: IEA.

  The Venezuelan government, which always lacked funds and didn’t receive any “help” from high oil prices at the time, did not hesitate to monetize all of the public debt necessary to cover its growing public expenditures without increasing taxes. This created hyperinflation in Venezuela. The population has even been forced to resort to bartering. The destruction of money means the destruction of the division of labor. In this environment, an annual fall of 10% GDP is perfectly understandable.

  

  Source: Central Bank of Venezuela; International Monetary Fund

  Price controls have completely depleted the commodities that are subject to such control, just as economic theory predicts. Having to trade food in the black market has radically increased the price of food. In 2015, the increase in food prices was over 130% in real terms (adjusted for inflation). This data only confirms the food emergency that Venezuela suffers.

  

  Source: FAO.

  Nationalized industries have become a disaster, to the extent that when oil prices fall the ability to rebuild Venezuelan industries and increase production in other areas is completely null. An ideal example is found in Venezuela’s steel production: after it was nationalized in 2008, steel production fell by more than 70%.

  

  Source: World Steel Association.

  Venezuela and the Embarrassments of the Socialist Paradise

  In short, the Venezuelan crisis is anything but a crisis caused by the fall in oil prices. Not all oil-exporting countries are undergoing crises, and those countries that do suffer from a crisis do so much less severely than Venezuela.

  The Venezuelan crisis has its roots in 21st century socialism and in the economic dirigisme that the political doctrine preaches. The fall in oil prices is nothing more than the event that uncovered the corpse of what used to be Venezuela’s economy.

   

  

  

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• French Bond Investors Skeptical That Election Risk Is Over

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

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

  

   

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

  

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

  

  

• Will Your Savings Get Caught In Government Shutdown Crossfire?

  Via Birch Gold Group,

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

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

  Shutdown Dejavu?

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

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

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

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

  Here’s where things get complicated…

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

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

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

  Why the Stakes Are So High

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

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

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

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

  Vlastelica writes (emphasis added):

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

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

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

  How to Keep Another Shutdown from Touching Your Wealth

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

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

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

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

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

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

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

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

  

  

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

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

  

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

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

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

   

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

   

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

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

   

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

   

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

   

  Fine print: “details to be determined.”

   

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

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

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

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

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

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

   

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

   

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

   

  Goals for Tax Reform

  ? Grow the economy and create millions of jobs

  ? Simplify our burdensome tax code

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

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

  Individual Reform

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

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

  • Doubling the standard deduction

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

  ? Simplification:

  • Eliminate targeted tax breaks that mainly benefit the wealthiest taxpayers

  • Protect the home ownership and charitable gift tax deductions

  • Repeal the Alternative Minimum Tax

  • Repeal the death tax

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

  Business Reform

  ? 15% business tax rate

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

  ? One-time tax on trillions of dollars held overseas

  ? Eliminate tax breaks for special interests

  Process

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

   

   

  

  Trumped you!

   

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

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

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

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

  

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

  Authored by Paul Craig Roberts,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

  

• Massive Explosion Reported Near Damascus International Airport In Syria

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

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

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

  //platform.twitter.com/widgets.js

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

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

  //platform.twitter.com/widgets.js

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

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

  //platform.twitter.com/widgets.js

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

  — Ivan Sidorenko (@IvanSidorenko1) April 27, 2017

  //platform.twitter.com/widgets.js

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

  — Ivan Sidorenko (@IvanSidorenko1) April 27, 2017

  //platform.twitter.com/widgets.js

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

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

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

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

  

  

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

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

  (click image for huge legible version)

  

  Source: Demonocracy

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

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

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

  

  Source: Demonocracy

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

  

  

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

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

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

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

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

  No need to rock the boat yet

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

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

  

  Peace in our (short) time

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

  We think there are several reasons behind this truce.

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

  Fire beneath the ice

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

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

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

  Baseline and risks

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

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

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

  

  

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

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

  

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

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

  

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

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

   

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

  

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

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

  

  

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

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

   

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

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

  

  

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

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

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

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

   

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

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

  

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

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

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

  

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

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

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

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

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

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

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

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

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

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

  

  

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• Islam In The Heart Of England And France

  Authored by Denis MacEoin via The Gatestone Institute,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Has she seen something British commentators have missed?

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

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

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

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

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

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

  But on the other hand:

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

  The report continues:

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

   

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

   

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

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

  Many observers say Birmingham has failed that test:

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

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

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

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

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

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

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

  Casey then quotes Clarke's conclusion:

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

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

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

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

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

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

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

  

  

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

  Authored by Gaius Publius via Down With Tyranny blog,

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

  —Hillary Clinton, 2013, speech to Goldman Sachs

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

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

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

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

  

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

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

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

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

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

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

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

   

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

  Translation — three points:

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

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

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

   

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

   

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

   

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

  Clinton ends with a fourth point:

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

  Clinton:

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

   

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

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

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

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

  For example, one of just many, from Forbes:

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

   

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

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

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

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

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

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

  

  

• China Launches First Domestically-Built Aircraft Carrier

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

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

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

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

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

  //platform.twitter.com/widgets.js

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

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

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

  More, google translated:

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

   

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

   

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

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

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

  

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

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

  

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

   

   

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

   

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

   

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

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

  

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

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

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

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

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

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

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

  

  

  

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

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

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

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

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

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

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

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

  Content originally published at iBankCoin.com

   

  

• Russia Ready To Send Ground Troops To Syria: FARS

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

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

  

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

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

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

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

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

  

  

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

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

  

   

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

  

   

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

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

   

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

   

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

   

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

   

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

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

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

   

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

   

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

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

  

  

  

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

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

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

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

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

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

  

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

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

  Caveat emptor.

  

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

  Authored by Daniel Lang via SHTFplan.com,

  

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

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

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

   

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

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

  However, this encouraging news comes with a catch.

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

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

   

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

   

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

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

  

  

• San Francisco Judge Blocks Trump's Sanctuary City Order

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

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

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

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

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

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

  — southpaw (@nycsouthpaw) April 25, 2017

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

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

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

  hahahahahaha pic.twitter.com/884QHGvYyY

  — southpaw (@nycsouthpaw) April 25, 2017

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

  Here is the full order:

  

  

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• Venezuela's Maduro – Selling The Golden Goose

  Authored by Jeff Thomas via InternationalMan.com,

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

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

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

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

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

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

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

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

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

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

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

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

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

  

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

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

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

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

  

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

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

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

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

  

  *  *  *

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

  

  

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

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

  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

  

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

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

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

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

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

  

   

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

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

   

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

   

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

   

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

   

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

   

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

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

  

   

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

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

  

   

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

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

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

   

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

   

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

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

  

  

• Cherokee Nation Files Lawsuit Against Big Pharma Over Opioid Epidemic

  Authored by Alex Thomas via TheAntiMedia.org,

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

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

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

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

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

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

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

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

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

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

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

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

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

  

  

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

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

  

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

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

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

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

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

  

  

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

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

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

  — Josh Eidelson (@josheidelson) April 24, 2017

  //platform.twitter.com/widgets.js

   

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

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

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

   

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

   

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

   

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

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

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

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

  

  

  

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

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

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

  — Trey Yingst (@TreyYingst) April 24, 2017

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

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

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

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

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

  To be sure, Schumer was delighted:

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

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

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

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

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

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

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

  

  

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

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

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

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

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

  Current Nuclear Powers

  

  This map highlights three aspects of the global nuclear arsenal.

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

   

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

   

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

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

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

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

  Former Nuclear States

  

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

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

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

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

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

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

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

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

  Nuclear Latency

  

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

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

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

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

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

  Conclusion

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

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

  

  

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

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

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

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

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

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

   

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

   

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

  

   

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

  #WelcomeToCanada pic.twitter.com/47edRsHLJ5

  — Justin Trudeau (@JustinTrudeau) January 28, 2017

  //platform.twitter.com/widgets.js

   

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

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

   

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

   

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

  

   

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

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

   

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

   

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

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

  

  

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

  Authored by Finian Cunningham via The Strategic Culture Foundation,

  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

  

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

  Authored by Paul Craig Roberts,

  

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  

  

• Chinese Stocks Are Plunging

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

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

  

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

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

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

  

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

  

   

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

  

   

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

  

  

  

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

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

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

   

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

   

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

   

  AP: I’m OK, thank you. No. …

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

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

   

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

   

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

   

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

   

  AP: CrowdStrike? 

   

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

   

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

   

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

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

  

  

• These Are The Tallest Buildings In Each State

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

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

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

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

  
  Source: Highrises.com

  

  

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

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

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

  United States: Q1 GDP likely to show weak growth

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

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

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

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

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

  

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

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

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

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

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

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

  * * *

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

  Monday, April 24

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

  Tuesday, April 25

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

  Wednesday, April 26

  • There are no major data releases.

  Thursday, April 27

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

  Friday, April 28

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

  Source: JPM, Goldman, SocGen

  

  

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

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

  

   

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

  

   

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

  

   

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

  

   

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

  

  

  

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

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

  

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

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

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

  

   

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

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

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

  Read more here…

  

  

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

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

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

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

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

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

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

  — Hillel Neuer (@HillelNeuer) April 23, 2017

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  Twitter users were just as amazed at the news:

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

  — kh.oz (@khuludAu) April 23, 2017

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

  — Baqir Sajjad (@baqirsajjad) April 23, 2017

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

  — Luna Safwan (@LunaSafwan) April 23, 2017

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

  — Yradur (@nacktepoesie) April 23, 2017

  //platform.twitter.com/widgets.js

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

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

  — Hillel Neuer (@HillelNeuer) September 22, 2016

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

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

  

  

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

  Authored by Mac Slavo via SHTFplan.com,

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

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

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

  

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

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

   

  I hope we learn from today

   

  …

   

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

   

  …

   

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

  

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

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

   

  …

   

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

  

  Video report:

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

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

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

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

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

   

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

   

  …

   

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

  Indeed, this is only the beginning.

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

  There will be war.

  

  

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

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

          – Richard Hayne, Urban Outfitters CEO, March 2017

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

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

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

  

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

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

  

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

  

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

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

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

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

   

  

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

  * * *

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

  

   

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

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

   

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

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

  * * *

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

  

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

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

   

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

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

  * * *

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

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

   

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

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

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

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

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

  

  

  

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

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

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

  VISUALIZING THE COLLAPSE OF THE MIDDLE CLASS

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

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

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

  

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

  A BROADER LOOK AT INCOME INEQUALITY

  This phenomenon is not limited to major cities, either.

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

  

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

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

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

  

  

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

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

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

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

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

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

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

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

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

  

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

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

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

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

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

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

  

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

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

  

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

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

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

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

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

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

  

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

  

  

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

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

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

  

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

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

  — The_Real_Fly (@The_Real_Fly) April 20, 2017

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

  — The_Real_Fly (@The_Real_Fly) April 20, 2017

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

  — The_Real_Fly (@The_Real_Fly) April 20, 2017

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

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

  — The_Real_Fly (@The_Real_Fly) April 22, 2017

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

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

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

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

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

  Content originally published at iBankCoin.com

  

• Which Country Is America’s Biggest Enemy?

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

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

  CONGRATS, DEAR LEADER

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

  

  Source: Visual Capitalist

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

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

  

  Source: Visual Capitalist

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

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

  CHANGING ENEMIES OVER TIME

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

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

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

  

  Source: Visual Capitalist

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

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

   

  

  

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

  Via StockBoardAsset.com,

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

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

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

  

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

  

   

  Latest Space Weather Warnings

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

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

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

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

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

  

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

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

  

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

  

   

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

  

  GICs can force a transformer tank wall to overheat

  

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

  

   

  What is a substation?

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

  2003 Substation fire due to a geomagnetic storm overheating a transformer

  

  Take away points

  

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

  

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

  

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

  

  

  

• Cheat Or Chump? – You Are Not An Investor

  Authored by Raul Ilargi Meijer via The Automatic Earth blog,

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

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

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

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

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

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

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

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

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

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

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

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

  

   

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

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

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

  

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

  Fed Intensifies Balance-Sheet Discussions With Market Players

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

   

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

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

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

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

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

  

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

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

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

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

  

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

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

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

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

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

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

  

  

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

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

  Not him..

  

   

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

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

   

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

   

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

   

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

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

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

  Sending VIX Call volumes to near-record highs…

  

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

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

   

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

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

  

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

   

  

  

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

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

  

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

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

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

  

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

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

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

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

  According to the Voice of Reason:

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

   

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

   

  Among the organizations involved are:

  – U.S. Department of Energy (DOE)

  – U.S. Department of Defense (DOD)

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

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

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

  – U.S. Northern Command (NORTHCOM)

  – State of New Jersey Office of Emergency Management

  – State of New York Office of Emergency Management

  – City of New York Office of Emergency Management

   

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

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

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

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

  These will be trying times.

  *  *  *

  Full Gotham Shield 2017 Presentation below:

  

  

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

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

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

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

   

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

   

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

   

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

  

   

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

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

   

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

   

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

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

  

   

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

  

  

  

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

  Authored by Paul Craig Roberts via The Strategic Culture Foundation,

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

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

  Perhaps he is.

  

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

  For Trump, the presidency is a fund-raising device. If his VP, National Security Advisor, Secretary of Defense, UN Ambassador, CIA Director, whoever, want to start wars wherever, that’s just more memorabilia to raffle off for a $3 donation.

  As a result of Trump’s failure to govern his own government, we have VP Pence telling Russia and China that there could be a nuclear exchange on their borders between the US and North Korea. Although Pence is not smart enough to know, this is not something Russia and China will accept.

  Washington worries about North Korea having nuclear weapons, but the entire world worries that Washington has nuclear weapons. And so many of them. World polls have shown that the majority of the world’s population are far more concerned about the threat to peace posed by Washington and Israel than by Iran, North Korea, Russia and China.

  Pence prefaced his “the sword stands ready” remark with “the United States of America will always seek peace,” which after Serbia, Somalia, Afghanistan, Iraq, Libya, Yemen, Pakistan, and Syria is as false a statement as it is possible to make. From Washington’s perspective it is always Washington’s victims that are “reckless and provocative,” never Washington.

  The US stands for war. If the world is driven to Armegeddon, it will be Washington, not North Korea, Iran, Russia, or China, that brings life on earth to an end.

  

  

• Is China Trying To (Slowly) Burst Another Stock Market Bubble?

  The pressure point in Asian stock markets this week has been the decline in Chinese equities (the biggest weekly drop in 4 months).

  

  Despite a stellar performance of the economy the outlook for the Shanghai Composite Index isn’t promising as the government is taking advantage of better growth to spur deleveraging.

  For a market relying more on liquidity than fundamentals, China’s worsening monetary conditions index suggests tough times ahead…

  

   

  As a reminder, the Shanghai Composite Index, notorious for its wild swings over the past two years, has gone 86 trading days without a loss of more than 1% on a closing basis, the longest stretch since the market’s infancy in 1992.

  

   The last 4 days have highlighted the unusual effect in Chinese stocks.. each time the Shanghai Composite dropped over 1% (red dotted line) it was miraculously lifted to ensure it closed with a loss less than 1%…

  

   

  As Bloomberg reports, authorities favor a steady stock market because it helps companies fund investment and repay debt by issuing new shares, which could help boost economic growth, according to Yin Ming, a vice president at Baptized Capital in Shanghai.

  “The national team is behind it,” Yin said. “State funds will likely continue to be a market stabilizer.”

  So one wonders, is China desperate to delever the speculative fervor in their markets… but do it just 1% at a time? Can the 'market' really be that well centrally planned? We will see…

  If the 6-month lag in Chines commodities is anything to go by, the breakdown in Chinese stocks is nowhere near over…

  

  

  

• "Everything's Worse" – Where India's Disintegration Is Set To Begin

  Authored by Jayant Bhandari via Acting-Man.com,

  Everything Gets Worse  (Part XII) –  Pakistan vs. India

  After 70 years of so-called independence, one has to be a professional victim not to look within oneself for the reasons for starvation, unnatural deaths, utter backwardness, drudgery, disease, and misery in India.

  Intellectual capital accumulated in the West over the last 2,500 years — available for free in real-time via the internet — can be downloaded by a passionate learner. In the age of modern technology, another mostly free gift from the West which has significantly leveled the playing field, societies that wanted economic convergence with the West, such as Japan, Korea, Singapore, HK, China, etc., have either achieved it rapidly, or have strongly trended toward it.

   

  

  More than 28,000 children less than six years of age have died in just one province, Madhya Pradesh, over the past year. Because these deaths were due to diseases resulting from malnourishment, the government attributed every single death to disease rather than malnourishment.

   

  Given that Indian prime minister Narendra Modi has been at the helm for only three years, it is hard to blame him in general for any of the above mentioned monstrosities marring daily life in India. The best the head of the executive of an extremely diverse and complicated country can achieve is to nudge the Titanic in the right direction.

  The problem is that Modi has actively sped the Titanic toward collision with an iceberg, from which he himself will not emerge unharmed. He must be blamed for his naiveté, his upside-down understanding of economics and a complete lack of awareness of the realities of life, his narcissism and obsession of making a hero out of himself, and an utter lack of self-respect that drives him to seek solace in Hindu fanaticism. He and his party have been a catalyst fanning the flames of nationalism and fanaticism among Indians.

   

  

  Farmers demonstrating in Delhi to point out their plight. More than 12,600 farmers and agricultural laborers committed suicide in 2015 in what is one of the world’s poorest countries. On average, life is worse for Indians than it is for Africans.

   

  However, sociopaths exist in every society. If you get rid of one, another one enters the scene. In the end, it is Indians who deserve to be blamed for elevating Modi and his BJP to their positions. In the end, it is Indians who deserve to be blamed for hollowing out and destroying institutions the British left behind over the past 70 years.

  In the irrational and tribal society of India, Modi perfectly symbolizes and unconsciously exploits the thinking process of the common man, who tends to deal with problems by doing even more of what created the problems in the first place.

  A rational person (particularly one whose perception is otherwise skewed by political correctness) faces a huge uphill task and high levels of frustration, when trying to comprehend the actions of irrational people and societies. He won’t be able to understand that the irrationality of some people is so pronounced it can keep them from connecting two simple dots right in front of them.

   

  

  Some 3,000 children die every day from illnesses related to poor diets. Of those who survive, 44% of the children under the age of 5 are stunted. 72% of infants and 52% of married women have anemia. With respect to this India is ranked on the same level as North Korea and Sudan.

  It is difficult or me to judge whether Pakistan is better or worse off by comparison, but I received many complaints in response to an earlier article in this series (in which I had presumed Pakistan to be somewhat worse off than India), mostly based on tribalism. But let’s try to bring some balance to the issue anyway.

  On the World Happiness Report, India is ranked in 122^nd position. Pakistan is ranked much higher, in 80^th  position. Pakistan’s  per capita GDP is US$1,550,  India’s is US$1,719. The difference is very small. Moreover, Pakistan has to spend a fortune to cater to refugees, to defend itself against problems from Afghanistan, as well as a much bigger foe, namely India. Pakistan also suffers from instability spilling over from Afghanistan and Iran.

  As a result Pakistan is spending a much higher proportion of its government revenue on the military than India. If the external conditions of the two countries were similar, Pakistan would presumably be richer than India.

  I also received several introspective messages from Pakistanis, who averred that Pakistan was descending into chaos, and similar statements were made by Indians as well. Most Pakistanis asked me to keep their names confidential, as speaking out against the Pakistani army or Islam could easily lead to unwelcome consequences such as beheading. A small minority in India is less concerned about speaking out, but this is changing quite rapidly.

  A silly, well-orchestrated routine that is conducted every day at Indo-Pak border. Ironically, both Indian and Pakistani forces work and practice this routine together, to keep it well-synchronized. The bravado and bravery is all superficial theater.

   

  Demonetization Pain Continues Unabated

  When Narendra Modi announced on 8th November 2016 that he was demonetizing 86% of the monetary value of all currency in circulation, he gave three major reasons for doing so: to end corruption, to end terrorism and to eliminate counterfeit currency. Ironically, all three are now in far worse condition than they were previously, and even worse than the predictions I made in this series of essays (Part XI is linked here).

  Many ATMs in India still dispense no cash. The economy is in shatters. This had to happen, as any new cash is rapidly moving under the carpets of the financial powerful that hoard currency. Small businesses are traumatized by the lack of access to cash – many are closing for good. People continue to avoid making non-essential purchases. Even food demand has failed to recover. Poor people very likely are still forced to go to bed half-hungry.

  No-one knows whether there are famines in parts of India, as none of the  mainstream media are covering the issue. Not unlike North Koreans or the Chinese during the times of Mao, Indians today, particularly members of the so-called educated class, simply cannot see what Modi or their nationalistic paradigm does not want them to see.

  Indian banks and other financial institutions are extremely unethical. Since privatization was implemented in the 1990s, they have charged fees and commissions for accounts that were never agreed upon. Indians never fight, so this continues. After the demonetization exercise, these mysterious charges have started to appear more often.

  Then they deduct certain services and financial taxes, and most people don’t make the effort to try to understand them. Indians are getting very tired of the banks – not for moral, but simply for financial reasons. Bank websites are extremely unwieldy. They require a sequence of passwords and OTPs (one time pad codes), which have an automatic expiry date.

  Getting the whole sequence right to make an online payment without having these websites freeze during the procedure leaves one with a sense of accomplishment. Most people prefer to walk down to their banks to get bank officials to perform such online transactions. India is simply not ready for the digital age. This experiment in going cashless will end in a disaster.

  Similar to every tyrant, Modi likes to think that tax collection should be at the heart of society. He imagines a society in which subjects dance around the state. The problem is, one can perfect the tax system or minimize corruption, but with a per capita GDP  of $1,718, India simply does not have the required productivity.

  Bank charges, rapacious tax authorities and massive amounts of time lost in dealing with the lack of cash have hurt whatever little productivity the Indian economy may have had. And by forcing digitalization, Modi has merely shifted liquidity from the informal to the formal sector.

  Even in the western world, most big corporations are in bed with governments. In India, romping in bed with the State is all they ever do. For the moment, these corporations are huge beneficiaries of shift of resources to the banking system.

  But without the spine that is the informal sector, the formal sector cannot benefit for very long. Eventually even the formal economy will succumb and take a massive hit.

   

  

  Bank credit growth in India plummets to 60 year lows.

   

  Corruption is bigger today, with most people complaining that they have to pay almost twice as much as usual in bribes, as bureaucrats and politicians try to make up for any real or assumed loses they faced as a result of the demonetization process. Counterfeiting of banknotes is a bigger problem today than it likely ever was.

   

  Kashmir – Where India’s Disintegration Is Set to Begin

  The last professed reason for Modi’s demonetization decree was to end terrorism and to solve the problems in Kashmir. The situation in Kashmir has deteriorated rapidly, while the law and order situation is generally worsening around the country, as vigilantes are given free reign.

  An African student in India being thrashed merely for being African. Racism against Africans is rampant in India, and the hostility is growing.

  Sacred cow enforcement squad: Cow vigilantes have become a regular feature of the Indian landscape, with Muslims and lower-caste people being killed and thrashed on a regular basis (one of the five men beaten up in this video later died). The Muslim community is increasingly isolated. This cannot end well in a country with the world’s second biggest Muslim population.

   

  

  Hindu Yuva Vahini, a group of fanatics, founded by none other than the current Chief Minister of Uttar Pradesh, Yogi Adityanath, roaming freely, with swords drawn (UP is India’s most populous state with nearly 200 million inhabitants). Once the genie of lawlessness is out of the bottle in this irrational society, it will be centuries before it can be put back in again. This is a disaster waiting to happen.

   

  Immediately after his appointment, Yogi Adityanath created “Anti-Romeo” squads, whose job is to harass any couples deemed to be unmarried. In spite of the fact that the police has no such constitutional authority, the courts have been silent spectators. Vigilante Hindu fanatics have even dragged couples from private properties to the police station. Instead of police charging these fanatics, they end up interrogating the couples dragged to the station. As I have said repeatedly, only hollowed out structures remain of the institutions the British left behind.

  There has been an unprecedented increase in human rights violations by the Indian army in recent days in Kashmir

   

  Another short video showing the Indian army in action in Kashmir

  The Indian army recently used a man as a human shield in Kashmir. Not only celebrities and journalists voiced their approval, India’s Attorney General, one of the main guardians of the law, justified it by saying: “peculiar situations require peculiar measures”.

   

  One must reflect on what it means if the country’s Attorney General has no clue what the rule of the law actually means. Voting was almost non-existent in recent elections. The army is stressed out and desperate. Those not in Kashmir and with no skin in the game happily pass judgment from their couches.

  There is no political mechanism in place for Kashmir to secede. Secession through violence – which looks increasingly inevitable, particularly in view of Modi’s heavy-handedness  – will be extremely chaotic. Its reverberations will be heard across the world, and might start the fragmentation of India as a political entity.

  

  

• Failing Malls Turn Empty Parking Lots Into Carnivals To Generate Cash

  It should come as no surprise that America’s malls, the wonderlands of the 80s, are in big trouble.  After slowly losing market share to online competition for years, brick-and-mortar retailers have finally succumb to changing consumer habits which has resulted in a massive surge in bankruptcies and store closings.

  Of course, as we’ve pointed out before, mall owners have tried just about everything to fill their empty spaces including the addition of grocery stores, doctors’ offices and even high schools. 

  But while most mall owners have been trying to figure out how to fill up the inside of their stores, they apparently overlooked another very ‘valuable’ asset:  their empty parking lots.

  With customer traffic sagging, U.S. retail landlords are using their sprawling concrete lots to host events such as carnivals, concerts and food-truck festivals. They’re aiming to lure visitors with experiences that can’t be replicated online — and then get them inside the properties to spend some money.

   

  “Events draw people to come to the shopping center,” said Keith Herkimer, whose company, KevaWorks Inc., is working with big landlords including GGP Inc. and Simon Property Group Inc. to produce outdoor events. “They generate revenue for the owner and offer a chance for cross-promotion, so they can try and drive more customers into the stores.”

  

   

  The idea, obviously, is to attract customers for experiences that can’t be replicated online with a focus on everything from movies nights to carnivals.

  Retail landlords have already made a push toward experience-driven offerings by adding restaurants, movie theaters and activity centers for children. Many malls are also adding rotating stores around for only a short time — known as pop-up shops — that are meant to attract young customers who see shopping as an event.

   

  Now, events are reaching beyond the malls themselves. Herkimer’s task is to bring crowds to parking lots with events that generate as much as $60,000 a week for mall owners from the largest outdoor events.

   

  The idea is gaining traction. Next month, Simon Property is having the first carnival in its Round Rock Premium Outlets parking lot, about 20 miles (32 kilometers) north of Austin, Texas. Similar events are being held for the first time at locations such as Central Mall in Port Arthur, Texas, managed by Jones Lang LaSalle Inc., and a Cheyenne, Wyoming, mall owned by CBL & Associates Properties Inc. In July, Simon Property’s Orland Square Mall, southwest of Chicago, will be holding its first parking-lot food-truck festival, with plans for live music performances, Herkimer said.

  

   

  Meanwhile, REIT investors are finally starting to understand that while carnivals may help to pay the electricity bills of America’s malls they do little to help generate a return on the hundreds of millions of dollars worth of retail square footage that lies empty inside the stores.

  

  

  

• "Total Chaos" – Cyber Attack Feared As Multiple Cities Hit With Simultaneous Power Grid Failures

  Authored by Mac Slavo via SHTFplan.com,

  

  The U.S. power grid appears to have been hit with multiple power outages affecting San Francisco, New York and Los Angeles.

  Officials report that business, traffic and day-to-day life has come to a standstill in San Francisco, reportedly the worst hit of the three major cities currently experiencing outages.

  Power companies in all three regions have yet to elaborate on the cause, though a fire at a substation was the original reason given by San Francisco officials.

  A series of subsequent power outages in Los Angeles, San Francisco, and New York City left commuters stranded and traffic backed up on Friday morning. Although the outages occurred around the same time, there is as of yet no evidence that they were connected by anything more than coincidence.

   

  The first outage occurred at around 7:20 a.m. in New York, when the power went down at the 7th Avenue and 53rd Street subway station, which sent a shockwave of significant delays out from the hub and into the rest of the subway system. By 11:30 a.m. the city’s MTA confirmed that generators were running again in the station, although the New York subways were set to run delayed into the afternoon.

   

  

   

  Later in the morning, power outages were reported in Los Angeles International Airport, as well as in several other areas around the city.

   

  

   

  Via : Inverse

   

  The San Francisco Fire Department was responding to more than 100 calls for service in the Financial District and beyond, including 20 elevators with people stuck inside, but reported no immediate injuries. Everywhere, sirens blared as engines maneuvered along streets jammed with traffic.

   

  

   

  Traffic lights were out at scores of intersections, and cars were backing up on downtown streets as drivers grew frustrated and honked at each other.

  Via: SF Gate

  The cause of the outage has not yet been made clear, though given the current geo-political climate it is not out of the question to suggest a cyber attack could be to blame. It has also been suggested that the current outages could be the result of a secretive nuclear/EMP drill by the federal government.

  As we have previously reported, the entire national power grid has been mapped by adversaries of the United States and it is believed that sleep trojans or malware may exist within the computer systems that maintain the grid.

  In a 2016 report it was noted that our entire way of life has been left vulnerable to saboteurs who could cause cascading blackouts across the United States for days or weeks at a time:

  It isn’t just EMPs and natural disaster that poses a threat to the grid, but there is also the potential for attacks on individual power substations in the vast network of decentralized and largely unguarded power grid chain. A U.S. government study established that there would be “major, extended blackouts if more than three key substations were destroyed.”

   

  Whether by criminals, looters, terrorists, gangs or pranksters, it would take very little to bring down the present system, and there is currently very little the system can do to protect against this wide open threat.

  Whether the current outages are the result of a targeted infrastructure cyber attack or simply a coincidence, most Americans think the impossible can’t happen, as The Prepper’s Blueprint author Tess Pennington highlights, a grid-down scenario won’t just be a minor inconvenience if it goes on for more than a day or two:

  Consider, for a moment, how drastically your life would change without the continuous flow of energy the grid delivers. While manageable during a short-term disaster, losing access to the following critical elements of our just-in-time society would wreak havoc on the system.

   

  • Challenges or shut downs of business commerce
  • Breakdown of our basic infrastructure: communications, mass transportation, supply chains
  • Inability to access money via atm machines
  • Payroll service interruptions
  • Interruptions in public facilities – schools, workplaces may close, and public gatherings.
  • Inability to have access to clean drinking water

  It is for this reason that we have long encouraged Americans to prepare for this potentially devastating scenario by considering emergency food reserves, clean water reserves and even home defense strategies in the event of a widespread outage. The majority of Americans have about 3 days worth of food in their pantry. Imagine for a moment what Day 4 might look like in any major city that goes dark.

  This exclusive clip from American Blackout shows what an American Blackout might look like:

  

  

• The Simple Reason Why A Second American Civil War May Be Inevitable

  Authored by Daniel Lang via SHTFplan.com,

  

  America has always had its divisions, and Americans have never really been a monolith. We’ve always been a nation of many nations. The culture of New England is different from the culture of the Deep South, which is different from the cultures in the West Coast or the Midwest. People living in the cities have different beliefs than people who live in the countryside. Within those areas, there are ethnic, linguistic, and religious enclaves. It’s always kind of been like that (probably to a lesser degree in the past), and somehow we’ve been able to find enough common ground to keep this country together for more than a century.

  However, something has changed. You can feel it in the air. Our nation has clearly never been this divided since the Civil War. A lot of people noticed it after the last election, but the truth is that these divisions have been deepening for decades, and they’re just now reaching a very noticeable breaking point. That’s obvious enough when you look at how the left and the right have been going at each other. It used to be a war of words, but it’s turning into something very dark.

  Consider what happened last week in Berkeley after Trump supporters and counter protesters clashed for the third time. 21 people were arrested and 11 were injured (that we know of), six of who had to be taken to the hospital. At least one person was stabbed. The police confiscated confiscated knives, stun guns, and poles. One Trump supporter admitted to being surrounded, pepper sprayed, and beaten with sticks by a mob of “protesters.”

  But wait, that’s not the dark part. After these groups clashed, the leftist protesters took to Reddit and admitted that they lost this particular battle (I can’t believe I’m using the word “battle” to describe it), and that it was time for them to attain more combat training and better weapons, including firearms.

  Do you see what’s going on here? Conservative demonstrations, which used to be placid affairs (remember the Tea Party protests?) are now turning violent as conservatives grow tired of restraining themselves, and are no longer afraid to hit back. Liberal demonstrators are responding by ratcheting up the level of force that they’re going to bring to the next street battle. It’s a tit for tat that keeps escalating, and I shudder to think of where it’s going to end up.

  Honestly, I think we’re in the early stages of a second civil war. I can’t say what it’ll look like precisely, but I can tell you that our nation is on this path, and it’s not clear how we can get off of it. In fact, I fear that it may be inevitable, and there’s a very simple reason why.

  It’s because Americans have been self-sorting themselves along geographic and political lines for a long time. A book titled “The Big Sort” made light of this trend back in 2008.

  Basically what’s going on, is that Americans are moving to communities that align more with their politics. Liberals are moving to liberal areas, and conservatives are moving to conservative communities. It’s been going on for decades. When Jimmy Carter was elected in 1976, 26.8% of Americans lived in landslide counties; that is counties where the president won or lost by 20% of the vote.

  By 2004, 48.3% of the population lived in these counties. This trend continues to worsen. As Americans move to their preferred geographic bubbles, they face less exposure to opposing viewpoints, and their own opinions become more extreme. This trend is at the heart of why politics have become so polarizing in America.

  We’re also seeing the same trend emerge online with social media. Despite the fact that the internet allows us to be exposed to more opinions that ever before, people choose to follow online voices that they already agree with. They’re slipping into digital bubbles that are comparable to their geographic bubbles.

  This trend is irreversible as far as I can tell. That’s because it’s tied to innovation. As our country became more interconnected with roads and Americans gained more mobility, we chose to move to like-minded places. We’re given the internet, the greatest source of information in human history, and we use it to seek out only the information that reinforces our current beliefs.

  We’re self-sorting at every level. Because of this, Americans are only going to grow more extreme in their beliefs, and see people on the other side of the political spectrum as more alien.

  You can see how this is creating the perfect breeding ground for a real, physical war. The polarization makes it easier to dehumanize the other side. The self-sorting creates definable geographic boundaries that are necessary for a war. It spawns two sides with beliefs that are so divergent, that they cannot coexist.

  We’re becoming two distinct nations with two competing visions for what the country should be. Two visions that are diametrically opposed. We used to be a nation of many nations that was held together, because there was still some common ground on what it means to be an American above all else. Now we can’t even agree on that.

  Once the last shreds of common ground and understanding dissipate, a moment that is rapidly approaching, another civil war will be impossible to avoid. I wish I knew what the solution is, but I don’t. All I can say is, unless Americans go out of their way to listen to people on other side, whatever that side may be, there’s going to be a lot of blood in the streets.

  

  

• Eight Venezuelans Electrocuted To Death While Looting Bakery Amid Massive Protests

  Venezuela’s ongoing protests against the Maduro regime took tragic turn when at least 12 people were killed overnight during looting and violence in Venezuela’s capital. Most of the deaths took place in El Valle, a working class neighborhood near Caracas’ biggest military base where opposition leaders say a group of people were hit with an electrical current while looting and trying to steal a refrigerator from a bakery.

  

  The chaos turned deadly when looters entered a bakery protected by an electric fence and tried to remove a refrigerator. The accounts varied, but one opposition leader said 13 people were hit with an electrical current after tossing containers filled with water and making contact with the refrigerator’s power cord.

  
  Criminal investigators look for evidence in front of a bakery, after it was looted

  Daniela Alvarado, 25, who sells vegetables in the El Valle area, said the looting on Thursday night began after police officers fired tear gas and buckshot at demonstrators blocking a street with burning tires.

  “People starting looting the businesses and yelling that they were hungry and that they want the government out,” said Alvarado. “We’re afraid (the stores) are going to run out of everything, that tomorrow there won’t be any food.”

  “Yesterday around 9 or 10 (p.m.)things got pretty scary, a group of people carrying weapons came down … and started looting,” said Hane Mustafa, owner of a small supermarket in El Valle cited by Reuters, where broken bottles of soy sauce and ketchup littered the floor between bare shelves.

  
  Empty shelves, a day after a night of looting in El Valle neighborhood in Caracas

  “The security situation is not in the hands of the government. We lost everything here,” said Mustafa, who said he could hear the looting from his home, which is adjacent to the store. Dozens of businesses in the area showed signs of looting, ranging from empty shelves to broken windows and twisted metal entrance gates.

  According to AP, the Public Ministry said the violence left 11 people dead in El Valle, all men between the ages of 17 and 45. Another death was reported east of Caracas in El Sucre. Six other people were injured. “This was a war,” said Liliana Altuna, whose butcher shop was ransacked by looters armed with guns who grabbed everything in sight.

  

  
  A demonstrator throws a molotov cocktail during clashes with riot police

  Opposition leaders accused the government of repressing protesters with tear gas and rubber bullets but standing idly by as businesses were looted. Meanwhile, Foreign Minister Delcy Rodriguez pointed the finger at the opposition, saying armed groups controlled by the government’s foes were responsible for the attack at the hospital.

  “We reject and do not accept those irresponsible declarations,” said Henrique Capriles, a former opposition candidate for president who the government recently barred from running for public office.

  Nine other people have been killed in violence associated with a wave of anti-government demonstrations in the past three weeks in which protesters have clashed with security forces in melees lasting well into the night.  Nine other people have been killed in violence associated with a wave of anti-government demonstrations in the past three weeks in which protesters have clashed with security forces in melees lasting well into the night.

  
  People holding a placard that reads ‘No more deaths, Maduro’

  The violence began Thursday night and stretched into Friday in El Valle, an area historically known as a hot spot for political protest. Witnesses said masked looters wielding knives and guns descended on an area known as “the little market” filled with bakeries, supermarkets and butcher’s shops.

  “They left us with nothing,” said Manuel Martinez, who was directing cleanup and repairs at a destroyed grocery store. “What they did wasn’t because of hunger,” he added. “It’s vandalism.”

  * * *

  Earlier Friday, officials said that one of the dead was Mervins Guitian. The young Venezuelan man was fatally shot when he was returning home late from work Thursday and got caught in the middle of late-night street clashes. Vicente Paez, a local councilman, said Guitian was an employee of a Caracas-area city governed by an opposition mayor but didn’t join the protests. It wasn’t clear who shot him and there was no immediate comment from authorities.

  Venezuelan social media was ablaze late into the night with grainy cellphone videos of light-armored vehicles plowing down dark streets to control pockets of protesters who set up burning barricades in several neighborhoods.

  

  
  Demonstrators run away from tear gas during clashes with police

  Vice President Tareck El Aissami said Friday the country is facing an “unconventional war” led by opposition groups working in concert with criminal gangs. He said opposition claims government forces were responsible for launching tear gas at the maternity hospital were another attempt to demoralize a people who have “decided to break ties with the bourgeoisie forever.”

  
  Police fire tear gas toward opposition supporters during clashes

  Meanwhile opposition members said they have no intention of easing up on protests. “Twenty days of resistance and we feel newly born,” opposition lawmaker Freddy Guevara said at an outdoor news conference Thursday as residents looking out from balconies in a neighborhood at the heart of the protest movement cheered loudly in support.

  The next planned protest is Saturday, when opponents are being asked to dress in white and march silently to commemorate the victims of the demonstration. Sit-ins to block major highways are planned for Monday.

  * * 

  As reported on Friday, General Motors announced early Thursday that it was closing its operations in Venezuela after authorities seized its factory in the industrial city of Valencia, a move that could draw the Trump administration into the escalating chaos engulfing the nation. A number of major Latin American governments, including Mexico, Argentina and Brazil, called on Venezuela to take steps to increase democratic order and halt the violence that has been swirling around the protests.

  The recent controversial, and subsequently reversed, Supreme Court ruling reinvigorated Venezuela’s fractious opposition, which had been struggling to channel growing disgust with Maduro.

  Opponents are pushing for Maduro’s removal through early elections and the release of dozens of political prisoners. The government last year abruptly postponed regional elections that the opposition was heavily favored to win and it cut off a petition drive aimed at forcing a referendum seeking Maduro’s removal before elections scheduled for late next year.

  But the government hasn’t backed down. Already drawing criticism for the GM seizure, Maduro announced late Thursday that he wanted an investigation into cellphone operator Movistar for allegedly being part of the “coup-minded march” organized by his adversaries Wednesday. That march was the largest and most dramatic the country has seen in years. He said the subsidiary of Spain’s Telefonica “sent millions of messages to users every two hours” in support of Wednesday’s protests.

  As tensions mount, the government is using its almost-complete control of Venezuela’s institutions to pursue its opponents. On Wednesday alone, 565 protesters were arrested nationwide, according to Penal Forum, a local group that provides legal assistance to detainees. It said 334 remained in jail Thursday. In light of the 100,000 political opponents arrested or fired by Turkey’s president Erdogan ever since last summer’s “failed coup” attempt, Maduro may have to pick up the pace.

  Opposition leaders have promised to keep up their protests, demanding that Maduro’s government call general elections, free almost 100 jailed opposition activists and respect the autonomy of the opposition-led Congress. They are calling for community-level protests across the country on Friday, a white-clad “silent” march in Caracas on Saturday to commemorate those killed in the unrest, and a nationwide “sit-in” blocking Venezuela’s main roads on Monday.

  With protests now assured on a virtually daily basis, what little was left of the economy is assured to grind to a halt. The only question is how much longer can the protests continue before the army flips its allegiance from the regime, and Maduro is replaced.

  

  

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