Jan 20

Today’s News 20th January 2017

  • Here Were the Biggest Winners and Losers During Obama's Reign of Terror

    At the end of the Bush administration, I hated the republicans. George was such a fucking idiot, alongside the tea party retards. I viewed Obama as a welcomed respite. In hindsight, I probably voted for Obama to prove that I wasn’t some sort of redneck racist.

    The Obama administration was very good for stocks — maybe the best ever. But at what cost?

    The national debt has doubled, borrowing more than $9 trillion since 2008 and the Fed’s balance sheet has gone from $700 billion to $4.5 trillion. This whole economy is a fucking illusion, a sham. Try to unwind those positions and start paying down that debt and you’ll see the true nature of the economy and the markets.

    Obama did nothing, other than kick the can down the road — passing on a nuclear time bomb for future generations. By that fact alone, I consider Obama a grandiose failure, of the community organizing varietal. I’m not even going to get into the wars and his social policies — which has laid waste to the social fabric of America.

    So what stocks did the best over the past 8 years, an era defined by crony capitalism, massive advances in technology, and social networks?

    BAD NEWS FOR TRADERFAGS. Most of the big winners were held captive by FRED ‘Fucking’ WILSON and his crony capitalist VC pigs. Those greedy fuckers presided over monumental gains in social networks. Here are a few.

    Facebook: $4b valuation in 2008 to $363b today.
    Twitter: $1.5m valuation in 2008 to $12.3b today.
    Yelp: $200m valution in 2008 to $3.2b today.
    Snapchat: $485k in 2012 to $25b today.
    Airbnb: $20k valuation in 2009 to $30b today.
    Uber: $200k valuation in 2009 to $70b today.

    That’s where the real money was made. Let’s see what scraps were left over for us — the little rich people.

    $TREE +5,130%
    $NFLX +4,415%
    $JAZZ +4,400%
    $DPZ +3,517%
    $MKTX +3,300%
    $PCLN +3,100%
    $ULTA +3,000%
    $INCY +2,800%
    $MGPI +2,800%
    $PPC +2,200%
    $PRSC +1,700% (literally a welfare play)

    And here were the losers.

    $BBRY -85%
    $APOL -85%
    $SPWR -79%
    $SHLD -77%
    $FSLR -76%
    $RIG -75%
    $AVP -73%
    $FRO -73%
    $CYH -66%
    $JCP -66%
    $CHK -65%
    $BBG -64%

    Notice any trends? Which will be the biggest winners and trends under Trump?

    I saw a world in need of automation, superfluous comforts indicative of a nation with plenty of excess. It was an era of wanton hedonism for the elite, and a grueling struggle for everyone else. One cannot discuss Obama without thinking about healthcare — his cornerstone issue during his time in office. It failed and now we have to deal with the ramifications.

     


    Content originally generated at iBankCoin.com

  • Trump Versus The CIA

    Authored by Paul Craig Roberts,

    When I read Trump’s defenders, such as Daniel Lazare, having to balance their defense with denunciations of Trump, I think the CIA’s propaganda is working. In his article, Lazare asks the rhetorical question, “Is a military coup in the works?” He then goes on to describe the CIA and presstitute coup against Trump unfolding before our eyes. 

    Having described the unprecedented frame-up of the president-elect of the United States by the CIA and the Western media, Lazare has to square himself with those doing the frame-up:

    “This is not to say that the so-called President-elect’s legitimacy is not open to question. . . . Trump is a rightwing blowhard whose absurd babblings about Saudi Arabia, Iran and Yemen reveal a man who is dangerously ignorant about how the world works.”

    Note that Lazare goes beyond the CIA and the presstitutes by elevating Trump from someone not sufficiently suspicious of Vladimir Putin to “dangerously ignorant.” I suppose Lazare means dangerously ignorant like Bill and Hillary Clinton, George W. Bush, and Obama. If this is what Lazare means, why is Trump any less qualified to be president than his three most recent predecessors and his opponent in the election?

    Of course, Lazare has no idea what he means. He is simply afraid he will be called a “Trump deplorable,” and he stuck in some denuciatory words to ward off his dismissal as just another Russian agent.

    At other times I conclude that the CIA is discrediting itself with its fierce and transparently false attack on the president elect. The attack on Trump from the CIA and its media agents at the New York Times, Washington Post, CNN, the network TV channels, the BBC, the Guardian, and every other Western print and TV source with the exception of Fox News, is based on no evidence whatsoever. None of the US 16 intelligence agencies can produce a tiny scrap of evidence. The evidence consists of nothing but constant repetitions of blatant lies fed into the presstitute media by the CIA .

    We have witnessed this so many times before: “Tonkin Gulf,” “Saddam Hussein’s weapons of mass destruction,” “Iranian nukes,” “Assad’s use of chemical weapons,” “Russian invasion of Ukraine.”

    General Smedley Butler, the most decorated Marine in the history of the US military said that he and the US Marines spent their lives defending the interests of the United Fruit Company and some lousy investment of the banks in Latin America. That’s all the attack on Trump is about. Trump is saying that “America first” doesn’t mean a license for America to rape and plunder other countries.

    Normalized relations with Russia removes the orchestrated “Russian threat” justification for the $1,000 billion taxpayer dollars taken annually from ordinary Americans and given to the military/security complex via the federal budget.

    Trump’s question about the relevance of NATO 25 years after the collapse of NATO’s purpose—the Soviet Union—threatens the power and position not only of the US military/security complex but also of Washington’s European vassals who live high in money and prestige as Washington’s servants. All European governments consist of Washington’s vassals. They are accustomed to supporting Washington’s foreign policy, not having had a policy of their own since World War II.

    Trump is taking on a policy world long under the influence of the CIA. Little wonder WikiLeaks’ Julian Assange and a number of other clued-in people say that the CIA will assassinate Trump if he cannot be brought into line with a Western alliance organized for the power and profit of the few.

    So what is Trump to do?

    There are various alternatives. Trump could fire CIA director John Brennan, have the Attorney General indict him for treason, have the FBI locate all participants in the intelligence agencies and presstitute media who aided and abetted the attempted frame-up of the president-elect of the United States and put them all on trial. This would be the best and surest way for Trump to clean out the snakepit that is Washington, D.C. To call a snakepit a “swamp” is to use an euphemism.

    Another alternative is for Trump to make the obvious point that despite the allegations of the CIA and the presstitutes, any hacking that occurred was not the fault of Trump and Russia, but the fault of the US intelligence agencies who were too incompetent to prevent it. Trump’s trump question to the CIA, NSA, FBI is: So, you know the Russians hacked us and you did not prevent it? If you repeat your incompetence, I am going to fire everyone of you incompetents.

    The same goes for terror attacks. Trump should ask the intelligence agencies: “How were you so totally incompetent that a handful of Saudi Arabians who could not fly airplanes brought down three WTC skyscrappers and desroyed part of the Pentagon, humiliating the world’s sole super-power in the eyes of the world?”

    Trump should make the point that the huge amount of money spent on security does not produce security. The massive security budget cannot prevent hacking of an American election and it cannot prevent humiliating attacks on the SuperPower by a handful of Saudi Arabians operating independently of any intelligence service.

    Trump should raise the obvious question: Has the Saudi’s oil trillions purchased the CIA and the presstitutes so that the CIA and the corrupt Western media now serve foreign interests against the United States? The story is being established that the Saudis are responsible or 9/11 and nothing is done about it. Instead the Saudis are supplied with more weapons with which to murder women and children in Yemen.

    All of the CIA’s propaganda can be turned against the agency. 9/11 was due to CIA failure, and to nothing else. Putin’s theft of the US presidential election was due to CIA failure, and to nothing else. All the bombings in France, UK, and Germany are due to intelligence failings, and to nothing else, as is the Boston Marathon bombing and every other alleged “terror event.”

    I mean, really, the CIA is a sitting duck for Trump. He has every reason to abolish the agency that has traditionally operated in behalf of narrow interests. In his book, The Brothers, Stephen Kinzer documents the use of the CIA and State Department in behalf of the clients of the Dulles brothers’ law firm’s clients. The CIA serves no American purpose, only the private purposes of the ruling elites, who are the real deplorables who have used corrupt Western governments to solidify all income and wealth in a few greedy hands.

    There is no reason for Trump to tolerate spurious charges against him by the CIA. At best the CIA is incompetent. At worst the agency is complicit in, or organizer of, terrorist events.

  • Child at Anti-Trump Protest Starts Fire and Says 'Screw Our President' on National TV

    This is what happens when two libfags get together and breed. The child is innocent. This is a reflection upon them and their abhorrent parenting skills.

    Those same people featured above have been camped outside of the DeploraBall Event, with the keynote speaker being Milo from Breitbart, claiming they were Nazis — because MUH alt-right.

    Not before long, the savages could not contain themselves and ended up getting MACED in the face by police for attacking Deploraball attendees.

    This, of course, is DEVELOPING…

     


    Content originally generated at iBankCoin.com

  • Assange "Stands By" Extradition Offer; Promises "Big Publishing Year" In 2017

    Just yesterday we noted that Julian Assange and his lawyers were seemingly shying away from an offer they previously made to the Obama administration whereby Assange agreed to U.S. extradition in return for clemency for Chelsea Manning (see “Assange’s Lawyer Provides An “Out”: Says Conditions Not Met For Extradition Deal“).  While initial tweets from WikiLeaks implied that the extradition deal was still on, a follow-up from Assange’s U.S. attorney seemed to declare a technical breach of “contract.”

    “Mr. Assange welcomes the announcement that Ms. Manning’s sentence will be reduced and she will be released in May, but this is well short of what he sought,” said Barry Pollack, Assange’s United State’s attorney.

     

    “Mr. Assange had called for Chelsea Manning to receive clemency and be released immediately.”

    That said, on a live press conference held earlier today on periscope, Assange once again confirmed that he “stands by everything I said including the offer to go to the United States if Chelsea Manning’s sentence was commuted.”

    “We look forward to having a conversation with the DoJ [Department of Justice] about what the correct way forward is.”

     

    “I’ve always been willing to go to the United States provided my rights are respected because this is a case that should never have occurred.”

    The full press conference can be viewed here:

     

    Meanwhile, irrespective of what happens with his personal extradition agreement, Assange promised a “big publishing year” in 2017 with the popularity of the ‘Podesta Emails’ encouraging other sources to come forward with new leaks.

    Assange promised a “big publishing year ahead” for WikiLeaks, adding “I’m in love with the publications we have coming.”

     

    Following the media coverage the Podesta emails garnered, Assange said “that exposure has, like it always does, encouraged other sources to come forward.”

     

    “We have a lot of material to get through, it takes time,” he said, concluding that WikiLeaks’ decade-long record of accuracy is a valuable reputation to maintain.

    Among a litany of other topics, Assange also touched on the “fake news” epidemic saying that Facebook was “more or less in the tank for Clinton” and has become “integrated with the U.S. establishment.”

    Assange described Facebook’s attempts to stop fake news as “super interesting,” saying that as Facebook “became rich [it] has integrated with the US establishment,” adding the social media site was “more or less in the tank for Clinton” during the election.

     

    “Organizations like Facebook are permitting many people to publish billions at the touch of a button – that’s breaking down the control structure,” he said. ”That is a new circumstance in democracy.”

    Finally, touching on a topic we’ve written about frequently in recent months, Assange discussed the attempts of the establishment to dismiss any hint of legitimate opposition from a pissed off electorate as nothing more than a reflection of Russian propaganda….

    “There is that environment now, where you can see the incentives, so whatever propaganda Russia may be putting out, through RT or elsewhere, and it certainly has its angle on things, you can see the incentives for incumbents, like Merkel, just like we could see with Clinton to try and hype up an issue about potential Russian involvement.”

     

    “It’s not that they [the incumbents] have a genuine opposition.  It’s not that the people are annoyed with misbehavior in government, and of course there is, I’m not saying anything in particular about Merkel’s government, but as a government who misbehaves, well, there’s an attempt to go, any criticism of governmental misbehavior, corruption,  or incompetence, well it’s not the opposition or the people making a fuss, no it’s secretly the Russians.”

    …though we’re sure the Russians told Assange to say all of the above so we highly recommend you take it all with a grain of salt. 

  • Dynamic Scoring is More Voodoo Economics (Video)

    By EconMatters


    We discuss the $20 Trillion National Debt, the $5 Trillion Central Bank Balance Sheet and the 105 Percent Debt to GDP Ratio in the context of the environment that Donald Trump is going to inherent as President in this video. No more experimental policies, we know what works, cut government spending, keep tax revenue constant, and start paying down the National Debt.

    Every American needs to know these 3 charts backward and forward because you are the one who has to pay for this government spending and debt obligations over your lifetime. It is time that our government goes on a spending diet, no more military jets that we don`t really need, let alone can actually afford. There are no magic, fantasyland budgetary solutions and Dynamic Scoring and Laffer Curve nonsense to justify an agenda is unacceptable with a $20 Trillion National Debt staring us in the face this year.

    It is time to break it down to solid finance basics, spend less, keep revenue increasing slightly to account for the entitlements hitting the budget with babyboomers` entitlements obligations starting in 2018, build a budget surplus each year, and start paying down the National Debt with some Fucking Financial Discipline.

     

    © EconMatters All Rights Reserved | Facebook | Twitter | YouTube | Email Digest | Kindle    

  • "He Wants To Be Emperor" – How Mark Zuckerberg Is Scheming To Become President

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    At this point, I’ve seen enough. It’s becoming quite clear that Facebook’s Mark Zuckerberg wants to be President of these United States.

    The topic first piqued my interest about a week ago when I read an article published at Vanity Fair titled, Will Mark Zuckerberg be Our Next President?

    Increasingly, a number of influential people in Silicon Valley seem to think that Mark Zuckerberg will likely run for president of the United States one day. And some people, including myself, believe that he could indeed win. “He wants to be emperor” is a phrase that has become common among people who have known him over the years.

     

    We’ll get to my theory on what that means a little later. First, let’s zip through the myriad indications that he might choose to throw his hoodie into the ring. Last year’s Facebook proxy statement articulated that Zuckerberg can run for office and still maintain control of his company. (To this end, Trump’s controversial precedent may facilitate any thorny political complications regarding the matter.) Then, over the holidays, Zuckerberg responded to a question about being an atheist, a belief he once professed, with a decidedly more politically circumspect answer: “I was raised Jewish and then I went through a period where I questioned things, but now I believe religion is very important.” (No one likes a president who doesn’t believe in some sort of God.) More recently, President Obama’s former campaign manager, David Plouffe, joined the philanthropic Chan Zuckerberg Initiative, to lead policy and advocacy. Other politicians from both parties have also joined the organization. And then there was the most obvious intimation: earlier this year, Zuckerberg, who has a habit of posting his annual New Year’s resolution on his Facebook page, declared that after conquering the previous challenges of learning Mandarin, and building an artificial-intelligence butler for his home, this year he was going to meet “people in every state in the US.” He noted that he’s “spent significant time in many states already, so I’ll need to travel to about 30 states this year to complete this challenge.” I wonder how many of those states are swing states?\

     

    If he does want the job, Zuckerberg definitely has the personality for it. When Facebook went public in 2012, I co-authored a profile of the young C.E.O. During the reporting, I heard from several friends about his penchant for playing world-conquering board and video games. Early childhood pals told me that one of Zuckerberg’s favorite video games as a boy was Civilization, the game in which you have to “build an empire to stand the test of time.” Others have told me that, to this day, Zuckerberg loves to play Risk, a strategy board game where you have to essentially take over the world. Believe it or not, he ended up applying some of these theories while forging and managing the extraordinary growth of Facebook, organizing his product teams in similar ways to his battalions in the board games. (According to someone close to him, these days Zuckerberg loves Game of Thrones and enjoys cooking a meat-laden “Dothraki Feast” while watching Westeros fall in and out of anarchy.)

    Then, this morning, I came across the following tweets.

    If that’s not enough for you, how about the team of 12 people now working on his personal page to make sure it’s perfectly pristine. Bloomberg reports:

    When Facebook went public five years ago, the world had a pretty vivid picture of who Mark Zuckerberg was. As much as anything, that image was of Jesse Eisenberg’s fictionalized performance as Zuckerberg in The Social Network: an intense, socially inept kid billionaire who always wore a hoodie, whether he was meeting with financiers or trying to screw a co-founder in court. Over the past couple of years, Zuckerberg has made a concerted effort to steer his image in a different direction.

     

    Near the end of 2014, he began holding Q&A sessions with groups of people wherever he was traveling around the world, fielding softballs ranging from lessons on startup-building to his favorite pizza toppings. Those town halls have evolved into near-daily posts on Zuckerberg’s own Facebook page, mixing news of company milestones with personal epiphanies, soft-focus photos from his life as a new dad, and responses to user comments. “What he’s learned over the last two years is that his image in the digital domain needs to be controlled,” says David Charron, who teaches entrepreneurship at the University of California at Berkeley. “And he’s simply growing up.”

     

    Zuckerberg has help, lots of it. Typically, a handful of Facebook employees manage communications just for him, helping write his posts and speeches, while an additional dozen or so delete harassing comments and spam on his page, say two people familiar with the matter. Facebook also has professional photographers snap Zuckerberg, say, taking a run in Beijing or reading to his daughter. Among them is Charles Ommanney, known most recently for his work covering the refugee crisis for the Washington Post. Company spokeswoman Vanessa Chan says Facebook is an easy way for executives to connect with various audiences.

     

    While plenty of chief executive officers have image managers, the scale of this team is something different.

    Naturally, Zuck doesn’t spend all of his free time smooching on Texas babies. So what’s he doing in between the professional photo shoots, Dothraki feasts, and playing cuddly tech oligarch for “ordinary” Americans? Well he’s suing native Hawaiians to get off his 700-acre, $100 million estate on the Hawaiian island of Kauai, of course.

    As reported by the Daily Mail:

    Mark Zuckerberg is suing Hawaiian families in an attempt to get them to sell their land to make his 700-acre property more secluded, a Honolulu newspaper reported Wednesday.

     

    Almost a dozen of small parcels on the Facebook co-founder’s $100 million Kauai property belong to Hawaiian citizens who acquired them through legislation dating back to 1850, called the Kuleana Act, according to the Star Advertiser.

     

    As such, these land owners are allowed to walk through Zuckerberg’s domain. But the billionaire is believed to have filed lawsuits against a few hundred people in the hope that they will sell their parcels at a public auction.

     

    Using the law to induce land sales, which isn’t uncommon in Hawaii, can be viewed as problematic because it severs the native Hawaiian community’s link to ancestral land.

     

    Zuckerberg is believed to have sued a few hundred people via several companies that he controls, the Star Advertiser reported. Some of these people, who inherited or owned interest in the land, are dead.

     

    Similar auctions have in the past led to below-market sales, but according to the Star Advertiser, some of those involved in the Zuckerberg cases believe the billionaire will offer a fair amount of money.

    I know that’s a lot to take in, so let me end this post with a little humor.

     

    No, that’s not real.

  • In Last Farewell, Russia Slams Obama Whose "Dumb" Actions "Claimed Tens Of Thousands Of Lives"

    In a scathing Facebook post, Russia’s former president and current Prime Minister, Dmitry Medvedev (who less than five years ago was assured by Obama that “he would have more flexibility”) gave his final assessment of US-Russia relations during the Obama administration, and lashed out at the outgoing US president, accusing him of destroying relations “between the United States and Russia, which are at their lowest point in decades” and predicting that “this is its key foreign policy mistake which will be remembered by history.”

    Medvedev was relentless, saying “US-Russia relations completely fell apart by the end of the second term of the Obama administration,” which has shown itself to be “short-sighted on such an important and complex issue as relations with Russia.”

    Despite some initial achievements in US-Russian relations, when “our countries signed a nuclear weapons reduction treaty, and Russia and the United States played a leading role in resolving the controversy surrounding the Iranian nuclear program” which gave “hope” to Russia that the two countries could establish good relations, that did not happen, for one reason: “the most important thing was to remember that Russia is not a banana republic (even though equal dialogue is a must with all members of the international community).”

    Obama’s mistake? Belittling a foe which saw itself a more equal with every passing day, “a country with defensive capabilities equal to the United States,” and a permanent seat at the UN Security Council (UNSC) deserved a different approach. “It is important to remember that Russia-US relations, without exaggeration, determine the fate of major international initiatives.”

    Why did Obama fail to grasp that foreign policy is a two-way street? Simple: according to Medvedev, “there is only one explanation for such actions: the interests of the United States. An explanation which is entirely defensible in America itself, though much less so in other countries.” But, he added accusing Obama not just of callousness, but outright stupidity, “the real issue lies elsewhere– the failure to understand one’s own true interests.”

    As a result, Obama’s “reckless” policies led to “the complete collapse of the political systems” and wars “which claimed tens of thousands of lives.”

    “Everyone is aware that the United States has always tried to” steer” almost all global processes, brazenly interfering in the internal affairs of various countries and waging multiple wars on foreign soil. Iraq, the Arab Spring, Ukraine, and Syria are just a few examples of such reckless policies in recent years. We can still see their consequences.“

    Taking the verbal humiliation up a notch, Russia’s prime minister then said “it doesn’t get any dumber than restricting entry to the United States for the leadership of the Russian parliament, ministers, and businessmen, thus deliberately reducing the possibility of full-fledged contacts and closing the window to cooperation. The bet was on brute force and sheer pressure. It is impossible to imagine such actions even during the Cuban missile crisis, even though the situation was much more serious then…”

    Having cast Obama on the trash heap of diplomatic history, the Russian did save some hope that relations between the two countries may recover thanks to Trump:

    “We do not know yet how the new US administration will approach relations with our country. But we are hoping that reason will prevail. And we are ready to do our share of the work in order to improve the relationship.“

    We can only hope that Trump will reciprocate.

    * * *

    Medvedev’s full Facebook post below:

    The administration of US President Barack Obama has come to a close and the results are decidedly mixed. I would like to give my assessment of Russia-US relations during this period, especially since I was directly involved in many events.

    On the one hand, Russia and the United States managed to work together to resolve a number of major international problems. Our countries signed a nuclear weapons reduction treaty, and Russia and the United States played a leading role in resolving the controversy surrounding the Iranian nuclear programme. We achieved the elimination of chemical weapons in Syria. These outcomes are important for the entire world.

    On the other hand, US-Russia relations completely fell apart by the end of the second term of the Obama administration.

    Everyone is aware that the United States has always tried to” steer” almost all global processes, brazenly interfering in the internal affairs of various countries and waging multiple wars on foreign soil. Iraq, the Arab Spring, Ukraine, and Syria are just a few examples of such reckless policies in recent years. We can still see their consequences, which range from the complete collapse of the political systems in these countries to wars which claimed tens of thousands of lives.

    There is only one explanation for such actions: the interests of the United States. An explanation which is entirely defensible in America itself, though much less so in other countries.

    But the real issue lies elsewhere– the failure to understand one’s own true interests.

    The Obama administration was completely short-sighted on such an important and complex issue as relations with Russia. There was hope that it would be smarter, more circumspect, and more responsible– despite differing assessments of complex international processes, varying approaches to key decisions, the role of emotion and the pressure exerted by various political forces. The most important thing was to remember that Russia is not a banana republic (even though equal dialogue is a must with all members of the international community). It is unacceptable to talk to a country which is a permanent member of the UN Security Council in such a manner. A country with defensive capabilities equal to the United States. It is important to remember that Russia-US relations, without exaggeration, determine the fate of major international initiatives. Often, we may like or dislike some of the policies of our key partners, but we must be aware of our common responsibility. This is something that the Obama administration failed to do.

    The pressure on our country has reached unprecedented proportions. Ill-considered economic sanctions, which did no one any good, have reduced our cooperation to zero. There were the ridiculous individual sanctions that nobody paid attention to. And it doesn’t get any dumber than restricting entry to the United States for the leadership of the Russian parliament, ministers, and businessmen, thus deliberately reducing the possibility of full-fledged contacts and closing the window to cooperation. The bet was on brute force and sheer pressure. It is impossible to imagine such actions even during the Cuban missile crisis, even though the situation was much more serious then…

    Who benefited from this? No one. Certainly not the United States. It didn’ t work.

    Conclusion: The Obama administration has destroyed relations between the United States and Russia, which are at their lowest point in decades. This is its key foreign policy mistake which will be remembered by history.

    We do not know yet how the new US administration will approach relations with our country. But we are hoping that reason will prevail. And we are ready to do our share of the work in order to improve the relationship.

  • China Grows At Slowest Pace In 26 Years Despite Record Debt, Currency Devaluation

    Amid constant liquidity additions, record credit support, a devaluing currency, and admission that the last three years of macro data was fabricated; China ended 2016 with the worst economic growth since 1990…

    China's macro data avalanche was a mixed bag. The headline GDP grew more than expected (+6.8% YoY) but Industrial Production disappointed and while retail sales rose more than expected, fixed asset investment growth missed.

    If debt is growth then China's transmission mechanism is officially FUBAR as Q4 saw the largest surge in aggregate financing ever…

    Credit expansion at close to twice the pace of GDP growth will be tough to sustain without putting financial stability at risk.  

    And a massive devaluation occurred in the yuan during Q4… (along with soaring bond yields and rising default risk)

     

    And the result of all that…

    • GDP (4Q): +6.8% BEAT +6.7% Exp
    • Industrial Production (Dec.): +6.0% MISS +6.1% Exp
    • Retail Sales (Dec.): +10.9% BEAT +10.7% Exp
    • Fixed Assets Investments (YTD): +8.1% MISS +8.3% Exp

    As Bloomberg notes,

    "Stable growth has come at the expense of higher leverage and bubbles from bonds to bitcoin. A policy shift toward controlling financial risks and curbing housing prices will weigh on the economy in 2017."

    On a long-term horizon, the economy seems to be filled by ever-growing debt rather than investment or consumption.

    Reaction from Stephen Innes, a Singapore-based senior trader at foreign exchange company Oanda:
    "GDP beat market expectations. Mind you, China’s growth remains supported by massive government spending and record-setting bank lending which in itself continues to fuel asset bubble fears."

    *  *  *

    As a reminder, Bloomberg notes that a shrinking working-age population, reduced scope for additions to the capital stock and diminished space for productivity gains mean that China's potential growth is slowing. Bloomberg Intelligence estimates potential growth at 7.1% in 2016, down from 7.3% in 2015 and on a path to 6.5% by the end of the decade.

    As Enda Curran, Bloomberg's Chief Asia Economics Correspondent, concludes…

    Of course, there is a cost to propping up GDP like this. And that's debt.

     

     

    It's hard to look past the headline number without considering the gargantuan lending China's banks were forced to pump into the economy to keep things chugging along. We know that policy makers are aware of this risk given the recent signals about prudent monetary policy and a tolerance for slower growth.

    The initial fallout was a drop in the offshore Yuan rate (following Yuan strength going into the numbers thanks to Yellen's dovish comments)…

     

     

  • California Governor Jerry Brown Admits To $1.5 Billion "Math Error" In State Budget

    Budgeting can be difficult, particularly for expansive state budgets that require a ton of inputs to support 1,000s of line items each of which can result in massive variances depending on the development of various economic indicators like interest rates, commodity prices, etc. throughout the year.

    That said, while forecasting variances are inevitable, we, as taxpayers, generally rely on our expensive budget office employees to at least present annual budgets that reflect sound mathematics and accounting principles.  Unfortunately, that seems to be too much to ask of the math-challenged administration of California Governor Jerry Brown which decided to double count certain cost savings and simply “forgot” to incorporate other expenses altogether.  Per the LA Times:

    Budget staffers said there were, in fact, two mistakes:

     

    –  A double counting of state savings from a program that coordinates health, behavioral and long-term care services with local government. That error understated expenses by $913 million.

     

    –  A forgotten state government cost from two counties — San Mateo and Orange — enrolling in the coordinated program, which meant missed expenses of $573 million.

    Jerr Brown

     

    Embarrassingly, when asked about the “mistakes” that resulted in a $1.6 billion budget deficit, the Chief Deputy Director of Brown’s Department of Finance could offer no other explanation than that the “math was wrong” while another spokesman admitted, “There’s no other way to describe this other than a straight up error in accounting, which we deeply regret.”

    Meanwhile, adding insult to injury, Brown’s administration allegedly discovered their “accounting errors” several months ago but didn’t disclose them to State Senators until last week.  Per Mercury News:

    The administration discovered accounting mistakes last fall, but it did not notify lawmakers until the administration included adjustments to make up for the errors in Brown’s budget proposal last week.

     

    The Department of Finance said it did not account for $487 million in rebates from drugmakers that the state must pay the federal government to reimburse Washington for its share of Medi-Cal drug costs.

     

    The state also miscalculated costs for the Coordinated Care Initiative, an experimental program in seven counties to improve care for a group of high-needs patients eligible for both Medi-Cal and Medicare, the federally funded health plan for seniors and people with disabilities.

     

    Officials double-counted some of the expected savings, leading to a budget hole of $913 million, and undercounted the costs in San Mateo and Orange counties by $573 million.

     

    In his spending plan, Brown proposed eliminating the Coordinated Care Initiative because he said the program was not cost effective, angering counties that said the change would shift $550 million in costs to them.

    Of course, the blatant attempt to cover up their “math error” rather than quickly admit the mistake last fall, led California State Senator John Moorlach to ask the obvious question of what other errors may be buried in the expansive budget, saying “It makes you wonder what else is not right. … When something like this happens, the trust factor gets eroded, and you lose confidence in what’s being provided to you.”  But, no matter the size of the various other “math errors” that come to light, we’re quite certain that California’s liberal legislators in Sacramento stand ready, willing and able to implement whatever tax hikes may be necessary to address such issues.

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Jan 19

Today’s News 19th January 2017

  • 58% of Americans Don’t Think Russian “Hacking” Changed Election … 56% Believe U.S. Should Improve Relations with Russia

    Despite the evidence–free drumbeat of propaganda and hysteria, a new CNN/ORC poll finds that Americans are remaining level-headed about the Russian hacking allegations:

    Majorities say that … that the outcome of the election would have been the same regardless of the information released (58% say that). Further, 56% say that despite this situation, the US ought to continue its efforts to improve relations with Russia rather than take strong economic and diplomatic steps against Russia.

    It’s almost enough to restore my faith in my fellow Americans …

     

  • "Dull Draghi" – What Wall Street Expects From The ECB Tomorrow

    While ECB President Mario Draghi may sound slightly hawkish at tomorrow’s press conference after an unexpectedly strong acceleration in CPI in December and European economic growth modestly picking up, the ECB is set to argue on Thursday that its extra-easy policy stance is still needed to keep the recovery on course. As a result, it is all but certain to leave current monetary policy in place and maintain a promise for lengthy stimulus, having extended its bond-buying program just last month coupled with the tapering (just don’t call it a taper) of its bond purchases this year.

    ECB President Mario Draghi can argue the bank has done its part to mend growth, but he will also note the recovery is not self-sustaining, underlying inflation is weak and political risk from key elections weighs on the outlook. So turning down the ECB taps now is inappropriate, he is expected to say.

    According to Reuters, on the face of it, Draghi should be relaxed. Inflation hit a three year high of 1.1% last month (the ECB expects it to hit 1.7% in 2019), manufacturing activity is accelerating and confidence indicators are firming, all pointing to solid growth at the end of last year. Additionally, euro zone business growth was the fastest in more than five years in December, order books are surging on export demand, and consumption is holding up, despite rising energy costs, all pointing to the sort of resilience not seen since before the bloc’s debt crisis. Of course, it could all be transitory as the “Trump” effect shifts to Europe, but the answr won’t be known for a few more months.

    So what does Wall Street expect? According to a Bloomberg survey, the ECB will wait until at least its meeting on Sept. 7 to announce any new policy measures As a result, Bofa strategists expect Draghi to sound “as dull as possible” to keep the message sent at the previous meeting intact. Confirming this, ECB’s Yves Mersch said on Jan. 6 that improving euro-area economic numbers and a faster-than-forecast inflation pickup aren’t enough to warrant an immediate shift in the policy.

    Here is a summary breakdown of select outlooks:

    BofAML (Athanasios Vamvakidis, Gilles Moec)

    • Draghi will endeavor to be as dull as possible, so as not to generate too many expectations on any further change in stance any time soon
    • Any deviation from the December message on the inflation outlook and/or further delay in the implementation of the new QE parameters would create scope for bonds to underperform current forwards
    • Risk for euro small and balanced; any hawkish statements that strengthen the euro during the Q&A could be an opportunity to sell EUR/USD again

    JPMorgan (strategists including Fabio Bassi)

    • Don’t expect the ECB meeting to break much new ground; ECB will likely express satisfaction at the improvements in the growth and inflation outlook, at the same time stressing that there is no reason to think about tapering more quickly than the Dec. announcement

    NatWest Markets (Anna Tokar, Giles Gale)

    • Unlikely to give significant new clues to the ECB’s reaction function
    • Since the Dec. meeting, data has been solid; expect the Council’s economic assessment may be slightly more optimistic, in line with the assessment of the Eurozone growth outlook
    • However, policy debate should be unchanged and simply reference the decisions taken in Dec

    Citi (strategists including Harvinder Sian)

    • Meeting is too close to the policy moves enacted last month to warrant a material shift in ECB tone, even if data has been more buoyant than expected
    • Any change to the reference of growth risks being to the downside will have to await more data and perhaps even clarity on the new U.S. administration’s policies
    • Think that any further tapering risk starts from June meetings onwards, but the rise in oil prices and a drop in euro could see markets re-price from the March staff forecasts
    • Expect some focus on the 33% issue limit, with Draghi likely to repeat that there are legal issues in up- sizing the issuer limit on legal grounds; many investors don’t believe the limit is a hard line in the sand –- despite the fact Portuguese and Irish bond valuations already reflect a less supportive ECB backdrop

    UniCredit (economist Marco Valli)

    • ECB President Draghi will sound constructive, but dovish
    • He will probably acknowledge that risks in the short term are moving toward faster-than-expected headline inflation and more balanced growth assessment
    • Also expects Draghi to emphasize that uncertainty remains elevated and the medium-term outlook hasn’t changed much from last month
    • ECB still wants financial conditions to remain very loose

    Deutsche Bank (strategists including Francis Yared)

    • Next step for the ECB should be to shift to a neutral stance by removing reference that rates may go lower in the introductory statement; may be too early to do so in Jan. meeting, but the overall tone of the press conference should suggest that the policy stance is evolving in that direction

    ING (Carsten Brzeski)

    • The December decision has put the ECB on autopilot at least until the summer and until after the Dutch and French elections. This autopilot should also immunize the ECB against short-term volatility in macro data.

    Commerzbank

    • The lending channel is no longer clogged up, but it is not completely free either and progress has only been possible thanks to massive measures by the ECB. If monetary policy were to be tightened again, and the burdens from existing loans were to increase once more, the lending channel would close and the economic picture would worsen considerably again.

  • Nothing Is Real: When Reality TV Programming Masquerades As Politics

    Submitted by John Whitehead via The Rutherford Institute,

    “There are two ways by which the spirit of a culture may be shriveled. In the first – the Orwellian – culture becomes a prison. In the second – the Huxleyan – culture becomes a burlesque. No one needs to be reminded that our world is now marred by many prison-cultures…. it makes little difference if our wardens are inspired by right- or left-wing ideologies. The gates of the prison are equally impenetrable, surveillance equally rigorous, icon-worship pervasive…. Big Brother does not watch us, by his choice. We watch him, by ours…. When a population becomes distracted by trivia, when cultural life is redefined as a perpetual round of entertainments, when serious public conversation becomes a form of baby-talk, when, in short, a people become an audience, and their public business a vaudeville act, then a nation finds itself at risk; culture-death is a clear possibility.”— Professor Neil Postman

    Donald Trump no longer needs to launch Trump TV.

    He’s already the star of his own political reality show.

    Americans have a voracious appetite for TV entertainment, and the Trump reality show—guest starring outraged Democrats with a newly awakened conscience for immigrants and the poor, power-hungry Republicans eager to take advantage of their return to power, and a hodgepodge of other special interest groups with dubious motives—feeds that appetite for titillating, soap opera drama.

    After all, who needs the insults, narcissism and power plays that are hallmarks of reality shows such as Celebrity Apprentice or Keeping Up with the Kardashians when you can have all that and more delivered up by the likes of Donald Trump and his cohorts?

    Yet as John Lennon reminds us, “nothing is real,” especially not in the world of politics.

    Much like the fabricated universe in Peter Weir’s 1998 film The Truman Show, in which a man’s life is the basis for an elaborately staged television show aimed at selling products and procuring ratings, the political scene in the United States has devolved over the years into a carefully calibrated exercise in how to manipulate, polarize, propagandize and control a population.

    Indeed, Donald Trump may be the smartest move yet by the powers-that-be to keep the citizenry divided and at each other’s throats, because as long as we’re busy fighting each other, we’ll never manage to present a unified front against tyranny in any form.

    This is the magic of the reality TV programming that passes for politics today.

    It allows us to be distracted, entertained, occasionally a little bit outraged but overall largely uninvolved, content to remain in the viewer’s seat.

    The more that is beamed at us, the more inclined we are to settle back in our comfy recliners and become passive viewers rather than active participants as unsettling, frightening events unfold.

    Reality and fiction merge as everything around us becomes entertainment fodder.

    We don’t even have to change the channel when the subject matter becomes too monotonous. That’s taken care of for us by the programmers (the corporate media).

    For instance, before we could get too worked up over government surveillance, the programmers changed the channels on us and switched us over to breaking news about militarized police. Before our outrage could be transformed into action over police misconduct, they changed the channel once again to reports of ISIS beheadings and terrorist shootings. Before we had a chance to challenge what was staged or real, the programming switched to the 2016 presidential election.

    “Living is easy with eyes closed,” says Lennon, and that’s exactly what reality TV that masquerades as American politics programs the citizenry to do: navigate the world with their eyes shut.

    As long as we’re viewers, we’ll never be doers.

    Studies suggest that the more reality TV people watch—and I would posit that it’s all reality TV—the more difficult it becomes to distinguish between what is real and what is carefully crafted farce.

    “We the people” are watching a lot of TV.

    On average, Americans spend five hours a day watching television. By the time we reach age 65, we’re watching more than 50 hours of television a week, and that number increases as we get older. And reality TV programming consistently captures the largest percentage of TV watchers every season by an almost 2-1 ratio.

    This doesn’t bode well for a citizenry able to sift through masterfully-produced propaganda in order to think critically about the issues of the day, whether it’s fake news peddled by government agencies or foreign entities.

    Those who watch reality shows tend to view what they see as the “norm.” Thus, those who watch shows characterized by lying, aggression and meanness not only come to see such behavior as acceptable and entertaining but also mimic the medium.

    This holds true whether the reality programming is about the antics of celebrities in the White House, in the board room, or in the bedroom.

    It’s a phenomenon called “humilitainment.”

    A term coined by media scholars Brad Waite and Sara Booker, “humilitainment” refers to the tendency for viewers to take pleasure in someone else’s humiliation, suffering and pain.

    “Humilitainment” largely explains not only why American TV watchers are so fixated on reality TV programming but how American citizens, largely insulated from what is really happening in the world around them by layers of technology, entertainment, and other distractions, are being programmed to accept the brutality, surveillance and dehumanizing treatment of the American police state as things happening to other people.

    The ramifications for the future of civic engagement, political discourse and self-government are incredibly depressing and demoralizing.

    This not only explains how a candidate like Donald Trump with a reputation for being rude, egotistical and narcissistic could get elected, but it also says a lot about how a politician like Barack Obama—whose tenure in the White House was characterized by drone killings, a weakening of the Constitution at the expense of Americans’ civil liberties, and an expansion of the police state—could be hailed as “one of the greatest presidents of all times.”

    This is what happens when an entire nation—bombarded by reality TV programming, government propaganda and entertainment news—becomes systematically desensitized and acclimated to the trappings of a government that operates by fiat and speaks in a language of force.

    Ultimately, as I make clear in my book Battlefield America: The War on the American People, the reality shows, the entertainment news, the surveillance society, the militarized police, and the political spectacles have one common objective: to keep us divided, distracted, imprisoned, and incapable of taking an active role in the business of self-government.

    If “we the people” feel powerless and apathetic, it is only because we have allowed ourselves to be convinced that the duties of citizenship begin and end at the ballot box.

    Marching and protests have certainly been used with great success by past movements to foment real change, but if those marches and protests are merely outpourings of discontent because a particular politician won or lost with no solid plan of action or follow-through, then what’s the point?

    Martin Luther King Jr. understood that politics could never be the answer to what ailed the country. That’s why he spearheaded a movement of mass-action strategy that employed boycotts, sit-ins and marches. Yet King didn’t march against a particular politician or merely to express discontent. He marched against injustice, government corruption, war, and inequality, and he leveraged discontent with the status quo into an activist movement that transformed the face of America.

    When all is said and done, it won’t matter who you voted for in the presidential election. What will matter is where you stand in the face of the injustices that continue to ravage our nation: the endless wars, the police shootings, the overcriminalization, the corruption, the graft, the roadside strip searches, the private prisons, the surveillance state, etc.

    Will you tune out the reality TV show and join with your fellow citizens to push back against the real menace of the police state, or will you merely sit back and lose yourself in the political programming aimed at keeping you imprisoned in the police state?

  • DOJ Ordered To Preserve Gmail Records Of Clinton-Colluding Assistant AG Peter Kadzik

    A Judicial Watch lawsuit seeking records related to potential collusion between the Justice Department and Hillary Clinton operatives during her email investigation has resulted in a federal judge issuing a rare order instructing the DOJ to preserve the Gmail records of the now infamous Assistant Attorney General Peter Kadzik.  The order came from U.S. District Court Judge Emmet Sullivan, a Clinton appointee, and gave the DOJ until this morning to report back on steps taken to preserve the personal email accounts of Kadzik.  Per Politico:

    “Defendant shall take all necessary and reasonable steps to ensure the preservation of all agency records and potential agency records between the dates of December 1, 2014 and November 7, 2016 in any personal email account of Assistant Attorney General for Legislative Affairs Peter Kadzik. Any question about whether a record is an agency record shall be resolved in favor of it being an agency record.”

    Of course, as we pointed out back in the fall, various emails provided by WikiLeaks exposed Kadzik repeatedly colluding with the Clinton campaign by providing campaign manager, and long-time friend, John Podesta with inside information on the DOJ’s investigation of Hillary’s email scandal.  Moreover, proving just how close they were, in a Sept. 2008 email, Podesta emailed an Obama campaign official to recommend Kadzik for a supportive role in the campaign saying that Kadzik was a “fantastic lawyer” who “kept me out of jail”…now that’s a bond that lasts.

    screen-shot-2016-10-25-at-11-57-45-am

     

    Of course, in response to Judge Sullivan’s order, the DOJ promptly noted that Mr. Kadzik was unable to locate any work-related emails on his Gmail account…well how convenient.

    “It is the government’s understanding that Mr. Kadzik has located no agency records or potential agency records in his Gmail account and that, therefore, there are no such documents to preserve. Nevertheless, out of an abundance of caution and consistent with the preservation order that Judicial Watch seeks, the government has instructed Mr. Kadzik to preserve any potential agency records in his Gmail account, should any exist, and Mr. Kadzik has agreed to do so,” the Justice Department filing said.

    And since we have no doubt that Kadzik performed a thorough, impartial scan of his Gmail account while resisting the urge to delete “inconvenient” records, we assume that he simply overlooked this email which provided a very timely “Heads up” to John Podesta regarding confidential information about DOJ hearings and FOIA requests.  Simple, honest mistake, no doubt.

    Kadzik

     

    How long can this farce continue on before government officials are finally forced to do what private corporations have been forced to do for years, namely requiring that their employees use secured, archived email systems for official communications and impose stiff penalties for non-compliance.  Seems simple enough.

  • China On Alert For "Death Of Night" Trump Tweets

    Submitted by Saxo Bank's Martin O'Rourke via TradingFloor.com,

    • Donald Trump's inauguration to take place on Friday
    • China's relationship with president-elect off to difficult start
    • Trump angered China by fielding call from Taiwanese counterpart after victory
    • Trump's anti-supranationalism might favour China if TPP is abandoned — Wei Li
    • Currency manipulation attacks not borne out by long term — Wei Li
    • Anti-trade rhetoric difficult to sustain in intricate global trade chain — Wei Li
    • Trumpflation trade may boost commodity exporters out of China
    • Geopolitical risk possible but markets have been adept at absorbing pain — Wei Li

    Read more on Saxo's page dedicated to Trump's inauguration

    k

    Chinese investors will keep a close eye on developments around Donald Trump's inauguration on Friday.

    Among many strands that are worrying investors in the run up to the inauguration of Donald Trump on January 20, the president-elect's foreign policy pivot towards Moscow and intensely confrontational stance towards China lurks as a deeply disturbing seismic-shift in geopolitics.

    Trump's been going after China for some time now. If that looked like just a good bit of old-fashioned scapegoating in the US presidential campaign designed to create sweet music with his highly disaffected hinterland, there has, if anything, been a ratcheting up of the rhetoric ever since his victory was confirmed on November 8.

    When he fielded that call from Taiwanese president Tsai Ing-wen in December, Beijing offered him a diplomatic path out of the maze by trying to suggest Tsai had lured the president-elect into a trap. Trump not only snubbed the lifeline, he reinforced the point a few days later by questioning the whole One-China approach that has defined US policy since 1979 and then lambasting China for the seizure of a US drone in disputed waters before Christmas.

    The tone mirrors Trump's pre-election mantra that China manipulated its currency to help its export sector and stole US manufacturing jobs and has seemingly set Washington on a collision course with Beijing that could emerge as one of the fundamental themes of the next four years. We are, after all, talking about the two biggest economies in the world.

    It's certainly got Beijing on red alert, says Wei Li, iShares head of investment strategy EMEA, in interview with TradngFloor this week.

    "There are some really unexpected things happening with the Trump administration and there are no doubt a lot more people paying attention to Twitter at 2am in the night," Wei Li says, in reference to Trump's liking for an unguarded tweet or two in the dead of night. "We are operating in a very different environment where markets are reacting and adapting to changes that have not been seen for a good decade or more."

    Wei Li says that it is important to put Trump's criticisms under the microscope and see if they stand up to scrutiny. The currency manipulation charge is once such hotspot.

    "It's actually quite difficult to say where the Chinese offshore yuan should be trading so labelling it as 'currency manipulation' is quite a statement," she says. "The Chinese yuan devaluation fear started becoming a mainstream rhetoric in the past couple of years but in years prior to that the Chinese yuan had been appreciating."

    USDCNH at the end of 2016 came within a whisker of breaking through the key 7.0 handle before concerted efforts including intervention by the People's Bank of China and slowing capital outflows stabilised dragging the pair back to the 6.800 zone.

    USDCNH was at 6.8575 at 1341 GMT, January 16, according to SaxoTraderGO.

    USDCNH came within a whisker of breaking 7.0 at the end of 2016 and the steady devaluation of the offshore yuan has given Trump fuel for a pernicious campaign
    k

    Source: SaxoTraderGO

    "The choice in China was seen as one in which you are either dealing with a businessman like trump where the focus is around profit and figures and the alternative of Hillary Clinton, the continuation effectively of the status quo and a more classic and experienced politician," says Chinese-native Wei Li. "There are still a lot of details as to how the relationship will pan out…but if the anti-trade rhetoric were to continue, you could see that hitting growth potential."

     

    "But it's hard to see the rhetoric continuing on the same scale because of the very intricate nature of the global supply chain," says the London-based analyst. "You can't just write off one aspect of the chain and not consider the impact on the rest so there are a lot of nuanced factors at play and it is probably too early to say what the impact will be on the Sino-US trade relationship."

    l

     Wei Li: 'If the US walks away from TPP, then this could create an opportunity for China.'

    China, says Wei Li, could even benefit from Trump's clear anti-internationalism stance if he sees through his promise to abandon the Trans-Pacific Partnership.

    "It's clear that if the US walks away from TPP, then this could create an opportunity for China in the global trade picture if it leaves a gap," she says. "TPP was a deal that included many countries but [not] China so if that deal does not happen in its original scale, then it may not be a bad thing for China in terms of its market share of global trade."

     

    "There has to be more room to go in the reflation trade, which could also provide quite a stimulus to Chinese commodity exports if consumer goods come under demand," she adds. "We track US data and factor in other content through our in-house GPS growth monitor and we were ahead of consensus in 2016 and continue to be for 2017 even though there has been some catch up recently."

     

    The monitor still points to upside growth."

    Certainly, the run up in global equities in the last two months that took the Dow Jones Index to within a point of cracking 20,000 seems to indicate that markets are relatively benign about the ongoing Sino-US relationship.

    "The way that markets have reacted and investor positioning seems to show that any tailrisk of a political nature is not fully priced in," says Wei Li.

     

    "Investors have found selling volatilities via Vix futures has been profitable because they have seen vols spikes don't last and this has been a good strategy," she adds.

     

    ""Markets have already shown they are adept and resilient at handling Brexit, Trump's election and the Italian referendum."

     

    "The nature of geopolitical tail risk is it is hard to predict ahead of when it happens but what we have seen is that risk volatility has not been prolonged."

    j

    China – mysterious, inscrutable and beyond Donald Trump's grasp.

  • Lockheed Agrees To Cut F-35 Price Below $100 Million In Latest Victory For Trump

    Less than a month after president-elect Trump first tweeted about the F-35's high costs, and a week after he brought up the F-35 in his first press conference, Reuters reports that The U.S. Department of Defense and Lockheed Martin are close to deal for a contract worth almost $9 billion as negotiations are poised to bring the price per F-35 below $100 million for the first time.

    The Washington Post notes that in recent months, the president-elect has not been shy about taking to social media to criticize or heap praise on individual companies and military programs.

    A Dec. 6 tweet bashed Chicago-based Boeing for what he referred to as the “out of control” cost of the Air Force One presidential airplane. Weeks later he turned in Boeing’s favor at the expense of Lockheed, tweeting that he had asked the company to “price out a comparable F-18 Super Hornet” because of the F-35’s high costs.

    He also briefly brought up the F-35 in a Wednesday news conference intended to clarify his business conflicts, saying he would “do some big things” with the program and find a way to trim costs and improve the plane.

    And then, after emerging from a meeting with President-elect Donald Trump at Trump Tower in New York last Friday, Lockheed Martin chief executive Marillyn Hewson told reporters that the Bethesda, Md.-based defense giant is close to a new contract deal that would cut the cost of the F-35 Joint Strike Fighter program and also create jobs.

    “We had the opportunity to talk to [Trump] about the F-35 program, and I certainly share his views that we need to get the best capability to our men and women in uniform and we have to get it at the lowest possible price,” Hewson said.

     

    “So I’m glad I had the opportunity to tell him that we are close to a deal that will bring the cost down significantly from the previous lot of aircraft to the next lot of aircraft and moreover it’s going to bring a lot of jobs to the United States.”

    Which leads to tonight's news, via Reuters, that they are close to deal for a contract worth almost $9 billion as negotiations are poised to bring the price per F-35 below $100 million for the first time, people familiar with the talks said Wednesday.

    Talks are still ongoing for the tenth batch of stealthy fighter jets with a deal for 90 planes expected to be announced by the end of the month, three people said on condition of anonymity.

     

    A Lockheed representative declined to comment and a representative for the fighter program said negotiations are ongoing.

     

    The U.S. Defense Department expects to spend $391 billion in the coming decades to develop and buy 2,443 of the supersonic warplanes. Though the F-35 program has been criticized by Trump as too expensive, the price per jet has already been declining. Lockheed, the prime contractor, and its partners have been working on building a more cost-effective supply chain to fuel the production line in Fort Worth, Texas.

     

    The overtures from the incoming administration may have had some effect, but Lockheed's F-35 program manager Jeff Babione said last summer that the price of the F-35A conventional takeoff and landing version of the jet would drop to under $100 million per plane in this contract for the 10th low-rate production batch.

    *  *  *

    Another victory for Trump? Or as John Harwood would say, this would probably have happened anyway…

  • Pittsburgh Mall Once Worth $190 Million Sells For $100

    We have frequently noted the precarious state of the U.S. mall REITs (see “Myopic Markets & The Looming Mall REITs Massacre” and “Is CMBS The Next “Shoe To Drop”? GGP Sales Suggest Commercial Real Estate Crashing“), but the epic collapse of the Galleria at Pittsburgh Mills paints a uniquely horrific outlook for mall operators.  The 1.1 million square foot mall, once valued at $190 million after being opened in 2005, sold at a foreclosure auction this morning for $100 (yes, not million…just $100).  According to CBS Pittsburgh, the mall was purchased by its lender, Wells Fargo, which credit bid it’s $143 million loan balance, which was originated in 2006, to acquire the property.

     

    Like many malls around the country, Pittsburgh Mills has suffered the consequences of weak traffic amid tepid demand from the struggling U.S. consumer resulting in massive tenant losses.  According to the Pittsburgh Tribune, the mall is only 55% occupied and was last appraised for $11 million back in August. 

    The value of the mall has been plummeting since it opened in July 2005. Once worth $190 million, it was appraised at $11 million in August.

     

    The mall has lost a number of key tenants over the years, including a Sears Grand store. The mall’s retail space is nearly half empty, with about 55 percent occupied.

     

    Mall

     

    Of course, New York Fed President Bill Dudley laid out a very compelling case for retailers yesterday if he can just convince American homeowners to commit the same mistakes they made back in 2006 by repeatedly withdrawing all of the equity in their homes to fund meaningless shopping sprees.  So it’s probably safe to keep buying those mall REITs…afterall those 3% dividend yields are amazing alternatives to Treasuries and you’re basically taking the same risk…assuming you overlook the billions of property-level debt that ranks senior to your equity position.  

    Mall REITS

  • China Central Bank Injects A Record 1.035 Trillion In Bank Liquidity This Week

    Heading into the Chinese Lunar New Year, local banks are suddenly starved for liquidity like never before. On Tuesday China’s benchmark money-market rate jumped the most in two years, with unprecedented cash injections by the central bank being overwhelmed by demand before the Lunar New Year holidays.

    Demand for cash in China tends to increase before the Lunar New Year holidays, when households withdraw money to pay for gifts and get-togethers. Month-end corporate tax payments are adding to the pressure this time, with the break running from Jan. 27 through Feb. 2. At that point the PBOC usually steps in with liquidity “injections” in the form of reverse repos. However, what it has done this year is literally off the charts.

    On Wednesday, the People’s Bank of China put in a net 410 billion yuan ($60 billion) through open-market operations, the biggest daily “injection” on record. Despite this massive boost in liquidity, the interbank seven-day repurchase rate still jumped 35 basis points, the most since December 2014, to 2.76 percent, according to weighted average prices. Yesterday, the overnight repo rate rose 10 basis points to 2.50 percent, the highest since April 2015, according to weighted average prices.

    So, with liquidity still scarce, moments ago on Thursday morning, the PBOC added another net injection of 190 billion consisting of 100Bn in 7-day repo and 150BN in 28-day repos, offset by 60bn yuan in previous loans maturing.

    As a result, the PBOC has injected a net of 1.035 trillion yuan via reverse repos so far this week, an all time high.

    It was unclear if the rise in 7-day interbank repo rate had continued to rise.

    “The PBOC aims to ensure that the liquidity situation remains adequate, while the 28-day reverse repo is apparently targeted at covering the holidays,” said Frances Cheung, head of rates strategy for Asia ex-Japan at Societe Generale SA. “There could also be preparation for any indirect tightening impact from potential outflows.”

    Liquidity conditions are under pressure also because loans are due to mature under the Medium-term Lending Facility, according to Long Hongliang, a trader at Bank of Hebei Co. in Beijing. There are 216.5 billion yuan of MLF contracts maturing this week, data compiled by Bloomberg show. The PBOC offered 305.5 billion yuan of loans to lenders using the tool on Jan. 13, compared with 105.5 billion yuan due that day.

    As Bloomberg notes, China’s central bank has been offering more 28-day reverse repos than one-week loans in the past two weeks, while curbing the injection of cheaper, short-term funds amid efforts to lower leverage in the financial system. It drained a net 595 billion yuan in the first week of January, before switching to a net injection of 100 billion yuan last week as the seasonal funding demand started to emerge. However, this week’s injection so far of over CNY 1 trillion suggests that there may be something more to the banks’ liquidity needs than simple calendar action.

     

  • Neither Intelligent Nor Wise, But Definitely Dangerous

    Submitted by Robert Gore via StraightLineLogic.com,

    The one adjective that best describes the Deep State is “soulless.”

    If you stay up with current events and read widely enough, especially non-mainstream media, you can often detect the Deep State and its works. Precise delineation is impossible, but the Deep State is the top ranks of the intelligence agencies, military, Departments of State, Homeland Security, Defense, Treasury, and Justice, the Federal Reserve, a myriad of banks, corporations, law firms, foundations, universities, and powerful behind-the-scenes string-pullers. When SLL talks about the Deep State, it is from the same vantage point as the blindfolded Indians describing the elephant: an admittedly limited and ignorant view of an amorphous entity that does its best to obscure itself to outsiders. Deep Staters often hide what they’re doing even from other Deep Staters.

    The Deep State may have had its genesis in the late 1800s, when powerful business, financial, and political figures came together to push passage of the income tax amendment and the Federal Reserve Act, essentials for their desire to dramatically expand the power of the federal government. By the end of the second world war, it had coalesced around two unwavering convictions: the Deep State should run the United States government, and the United States government should run the world. These were not the whispers and murmurs of a super-secret cabal, they were openly discussed by policy makers, the media, and academia in the United States and Great Britain, the junior member of a world-dominating Anglo-American axis.

    For over four decades, the Deep State depicted the Soviet Union as an existential threat, justifying their consolidation of power, US government global intervention, and repression at home. It gave itself a moral Get Out of Jail Free card: dastardly Soviet tactics had to be fought with dastardly American tactics. Despite ritualistic expressions of regret: “It’s a damn shame we have to do this, but such is the nature of our enemy,” many in the military and intelligence services relished that aspect of their jobs. Few were called to account for their reprehensible deeds, many of which will remain forever unexposed.

    While it was Republican Dwight Eisenhower who warned of the “military-industrial complex” in his farewell address, most of what little public opposition that complex and the intelligence agencies have received since then has come from Democrats. After the Bay of Pigs fiasco, President Kennedy fired CIA chief Allen Dulles, reportedly vowing to shatter the agency into a thousand pieces and scatter it to the winds. The debate rages as to whether his vow had anything to do with his assassination, but the possibility cannot be dismissed. (Oddly, Dulles was on the Warren Commission and by most accounts stage-managed its investigation.)

    Democratic senator Frank Church led a Senate select committee investigation on intelligence in 1975. His investigation gave most Americans their first glimpse into the CIA’s dirty laundry, notably assassinations and attempted assassinations of various foreign leaders. (The practice was supposedly outlawed by an executive order issued by President Gerald Ford, which was replaced by one issued by President Ronald Reagan. That order didn’t prevent US acquiescence to and complicity in the murder of Muammar Gaddafi. “We came, we saw, he died!”) Also revealed was the CIA and FBI’s interception, opening, and photographing of domestic mail. Senator Church publicly expressed grave misgivings about the government’s nascent electronic surveillance capabilities. He must be rolling in his grave over what it does now.

    It was also the “Democratic” press, primarily the New York Times and The Washington Post, that took the lead in exposing scandals with intelligence angles and opposing some of America’s military interventions, notably Vietnam. Unfortunately, in the aftermath of the 9/11 attacks the Democratic-dominated mainstream media climbed into bed with the Republican administration. The weapons of mass destruction and the Saddam Hussein-al Qaeda stories, based on doctored and phony intelligence, were sold to the American people as the justifications for the regime-change invasion of Iraq. There were almost no editorial objections to that or subsequent regime-change operations, the Patriot Act’s assault on the Bill of Rights, or to the muddled, impossible to define or limit concept of a global, preemptive war on terror. Although that war has been a predictable failure, the mainstream press will not even acknowledge it’s two most obvious consequences: the further spread of terrorism and the refugee flows from Middle Eastern and Northern African war zones.

    The problem at the heart of intelligence agencies and their oversight is the information they collect. It invariably includes dirt that can be used against those who might question or oppose them. There is not a person on the planet who doesn’t have some aspect of his or her life they want to remain private. It’s no mystery why a former KGB agent runs Russia, why all the retirement rules were waived so J. Edgar Hoover could stay on as head of the FBI until his death, how a former head of the CIA and then his son acquired the power base that got them both elected president (and they were trying for number three). Threatened or actual blackmail is a powerful weapon, except for that .000000001 percent who lead unblemished, exemplary lives. That weapon renders a secret intelligence function incompatible with civil liberties and popular control of the government.

    The recent election was a revolt by the electorate against their incompetent, corrupt rulers. Hillary’s Clinton’s nomination was the exclamation point on the Democratic party’s moral bankruptcy, a final repudiation of the party and its aligned media’s attempts, however incomplete and compromised, to check the Deep State. Given that abdication, its embrace of the intelligence agencies’ perpetration of fake news, support of an increasingly confrontational stance with Russia in hopes of provoking a war, and tacit endorsement of violence during Donald Trump’s inauguration come as no surprise. Grasping for the power they’ve been denied, they’ll try anything.

    There has been much talk of a Deep State “coup” during its battle against Donald Trump, but how can those who control the government stage a coup? What they are doing is taking action against an opponent who has ripped away the facade of popular control and may pose a threat to their power and position. Deep State rule has been neither intelligent nor wise. However, it would be unintelligent and unwise to therefore conclude it’s not dangerous. That it would try to deny the duly elected choice of the American people the presidency bespeaks arrogance completely disconnected from morality. That it would try to provoke violence from nuclear-armed Russia and inauguration “demonstrators” in American cities bespeaks a disregard of extreme risks and potentially catastrophic consequences, not just to the citizenry they despise, but to themselves as well.

    They must be opposed, stopped, and scattered to the winds (which would, in a perfect world, blow some of them into prison). Donald Trump may be the last, best hope. The intelligent and wise will be on full alert, prepared for the risks and dangers…should he fail or succeed.

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Jan 18

Today’s News 18th January 2017

  • Chinese New Home Prices Soar by 12.4% in December — Higher by 25% in Tier One Cities

    What can go wrong, after all? The Chinese government has already informed us their real estate market, which is being driven by records amount of debt, is NOT in a bubble, so relax, chill and enjoy a large overflowing bowl of wanton soup.

    Take Larry Hu, for example, economist from Macquarie. He posited, back in October, that the +25% year over year price jumps for Chinese property wasn’t indicative of a bubble…because MUH lack of supply. Perfectly normal stuff.

    Source: BBG

     

    Big cities like Shanghai are experiencing net immigration with only limited blocks of land coming on the market. “If Shanghai sells only one parcel of land in a year, the price of the land must be extremely high – this is not a bubble; this is a shortage of supply,” Hu said.

    We can revisit a litany of smug remarks by any number of US economists before the US housing market collapsed — almost mocking those who warned against unchecked gains in property prices.

    Take, for example, the missives of Jonathan McCarthy and Richard W. Peach — senior economists at the NY Fed.

    “Home prices have been rising strongly since the mid-1990s, prompting concerns that a bubble exists in this asset class and that home prices are vulnerable to a collapse that could harm the U.S. economy.
     
    “A close analysis of the U.S. housing market in recent years, however, finds little basis for such concerns. The marked upturn in home prices is largely attributable to strong market fundamentals: Home prices have essentially moved in line with increases in family income and declines in nominal mortgage interest rates.”

     
    Or, we can look back at the advice of Chris Flanagan, head of ABS Research, JP Morgan — and laugh at how stupid he was.
     

    “Based on what we know and see in terms of employment and interest rates, it is extremely difficult to see how five years from now we could be looking back and observing a historical 5-year growth rate of, say, less than 5%. That should be more than adequate to support the continued good credit performance of sub-prime mortgage pools.
     
    “It is important to understand — we can contemplate home price growth rates declining, albeit modestly, but we do NOT envision home prices declining!”

     
    This out of China tonight — record home prices.
     

    Source: Beijing Monitoring Desk
    Average new home prices in China’s 70 major cities rose 12.4 percent in December from a year earlier, slowing slightly from a 12.6 percent increase in November, an official survey showed on Wednesday.
     
    Compared with a month earlier, home prices rose 0.3 percent nationwide, slowing from November’s 0.6 percent, according to Reuters calculations from data issued by the National Bureau of Statistics (NBS). Shenzhen, Shanghai and Beijing prices rose 23.5 percent, 26.5 percent and 25.9 percent, respectively, from a year earlier.
     
    Monthly growth in Shanghai and Shenzhen slowed but was unchanged in Beijing as local governments’ tightening measures took effect. China relied heavily on a surging real estate market and government stimulus to help drive economic growth in 2016, but policymakers have grown concerned that the property frenzy will fuel price bubbles and risk a market crash, with serious consequences for the broader economy. Soaring home prices have prompted more than 20 Chinese cities to tighten lending requirements on house purchases, while regulators have told banks to strengthen their risk management on property loans.

     
    Hindsight is 20/20 and it’s never easy to time tops or bottoms. But this is child’s play. None of these gains are due to some grass roots renaissance, thanks to some technological breakthrough or keystone event that caused prices to jump. The price jumps in China are due to record levels of debt, leverage, greed, avarice, and wanton chicanery.
     
    It’s most definitely a bubble — whether it cracks this year or not is anyone’s guess.

    Content originally generated at iBankCoin.com

  • A Violent Inauguration? A Call For Peace On Inauguration Day

    Submitted by David Battistella

     A Violent Inauguration? A Call For Peace On Inauguration Day

    Now that all attempts to delegitimize President Elect Trump to this point including failed recounts, the constant drum beating about popular vote victory, intimidation, bullying and desperate pleas to the Electoral college and the attempt at cold War 2.0 have failed, will inauguration day be the last stand? Now even millionaire Catholic socialist filmmaker Michael Moore is leveraging a Trump presidency to catapult himself back into relevance while his home state is already feeling the benefits of the Trump effect.

    Moore has already shown up to Trump tower with his trademark (and tired) Roger and Me shtick and he is a leading voice in calling for civil disobedience protests, a whole hundred days of them, starting on inauguration day. While this is probably a key way to gather material for his next film about how awful America is, he left out a key word in his call to action – peaceful.

    While Michael Moore is calling for civil disobedience, many signs are pointing to the possibility of violent protests. All this while President Elect Trump is already putting jobs back into Moore’s home state of Michigan and the country is already seeing some signs of being hit with the Trump’s economic defribulator. What a sad pair Moore and Rosie O’Donnell make, leading the charge!

    I’m sure Mr. Moore would be on his soap box had Obama done anything this useful for Michigan in the last eight years, but alas, we seem to have become so attached to identity politics that we can no longer celebrate the good even when it directly impacts issues like jobs, the one issue Michael Moore staked his entire career on back before his net worth took him into the one percent.

    Meanwhile at DNC headquarters, Donna Brazile has it backwards, it’s Democrats who have a great chance to move back toward their roots and embrace Americana again by getting behind proposed initiatives that might help the American worker and stimulate a browbeaten economy.

    In any case, it seems definite that there will be a wave of protests on January 20th as Americans who oppose this presidency rightly should exercise their right to free speech. The larger question though is whether those protests will turn violent and turn inauguration day into an international spectacle. This might not have a desired effect on the rest of the world.

    Violence is a line, which when crossed, catapults the violent aggressor into another category beyond how civilized democracies should operate. When it comes to debate and protest I can listen to and follow any discourse, weigh the arguments and always respect a peaceful protest process. The moment that process turns to violence, looting, destruction of property, injury to peace officers and civil unrest; (to me at least) the messenger is no longer playing by the rules of a peaceful democracy. They have, in effect, suspended some of the rights afforded them and their expression of free speech.

    When mired in violence respect for any cause is lost or eroded. Engaging in violence, violent behaviour and destruction of property is the moment where we move out of the realm of what civilized, peaceful democratic process is about. Think Gandhi when trying to understand how much power lies in peaceful, well reasoned, organized protest movements. Think bullying and terrorism when this important step is bypassed and a violent mob rule takes over. Smashing property is not going to garner respect. It might make a good news hit for CNN, who most probably will be looking for the violence at every turn and rebroadcasting it as the main story.

    One thing is almost certain, that if there are violent outbursts during the Trump inauguration, there is a high degree of probability that the violence will be blamed squarely on Donald Trump. The logic for this might be that somehow Donald Trump, by just being Donald Trump, is enough of a reason to become violent and in some twisted form of reason, that violence would become acceptable under the circumstances. Perhaps they are mad at Russia too.

    The real threat of violence is not purely blowing smoke. Check out Carl Rove talking about inauguration day security threats in 2008 and how staff security clearances played an important role with a serious threat. Zoom up to the 6 minute mark.

    But I’d like to offer another suggestion though, and I know I am speaking in hypotheticals here, but any violence around inauguration day speaks squarely to the current lack of top leadership. President Obama’s passive-aggressive, fence-sitting, double-speak stance, through both his words and his omission, lends quiet support and encouragement and has contributed to creating a climate where violent protest is acceptable behavior. How well off would we all be if The outgoing President would renounce violence nearly as fast as Democrats demand renouncements and retractions on any number of issues.

    Obama said at a joint news conference with German Chancellor Angela Merkel. “And I suspect that there’s not a president in our history that hasn’t been subject to these protests. So, I would not advise people who feel strongly or who are concerned about some of the issues that have been raised during the course of the campaign, I wouldn’t advise them to be silent.”
     
    The President of the United States would not advise them to be silent? Really? So what is the take-away here when this prevailing attitude come straight from the top of the alt-left.

    It’s precisely this kind of murky messaging that well funded and radical organizations use as a battle cry and even permission to turn civil disobedience and peaceful protest into intimidating, violent outburst ultimately designed not to be heard but really designed to silence others. Do these protesters not have to be extremely careful in not becoming exactly what they oppose? Folks who engage in violence need to take a very hard look not only at what they are fighting for, but exactly how they are fighting for it.

    I’ve never heard the current President clearly (I mean in non wishy washy terms) renounce the use of violence, rioting, looting and destruction of property after recent cop killing and protests in major US cities. This includes the murder of Police officers (remember when we used to call them “peace” officers). His is more a conciliatory tone, an understanding of the frustrations of what arrises, but saying nothing firmly to denounce violence and encourage a deeper thinking and peaceful way forward. This kind complacency might lead to things like dead police officers in Dallas and riots in other US cities.

    Obama said, “In a movement like Black Lives Matter, there is always going to be some folks who say things that are stupid or imprudent, or over-generalize, or are harsh (edit) and I don’t think that you can hold well-meaning activists who are doing the right thing and peacefully protesting responsible for everything that is uttered at a protest.”

    This opinion is dangerous, more dangerous than saying nothing at all. Essentially it is saying, go ahead and organize and if something happens so be it, the leadership is not responsible for anything done, said or perhaps for violence that “breaks out”.

    Should violence occur on inauguration day, a story which will emerge and quickly spread internationally will be one of a divided America, an inauguration with a violent and extreme reaction to a “divider president”, Donald Trump. But it is not Donald Trump who has been sitting in the seat of power over the past eight years using veiled encouraging statements like this to his SJW audience;  that one falls squarely into the lap of the sitting president.

    But in the end would violence and disruption amount to Trump’s violent entrance? Or would this be Obama’s violent exit, a stain on his scandal-free war-time Presidency?

    It’s an important narrative to watch and one the MSM will ultimately need to take a great deal of responsibility for. If the MSM want to restore their place in the public trust, perhaps they should be the first to renounce any violence around the Inauguration, rather that rebroadcast it ad nauseum.

    To me, any story which emerges which is not a peaceful transition and inauguration of newly democratically elected Donald Trump, (if things turn violent and we pray it does not) falls at the feet of the outgoing President and his slurping lapdog, aka the MSM.

    President Bush had eggs hurled at his limo on inauguration day, which of course made it into a Michael Moore film. However, as the Obama’s have expressed, the Bush family were nothing but gracious and welcoming when their time in the White House had come to a close. Can we really say the same now while every possible barrier has been put up by a sore loser campaign a party and a President who struggles with narrative and his legacy by planting the protest seeds in the form of executive orders and last minute actions and disruptions designed as trip wires to the front door of the White House?

    Cue the next narrative, “we tried real hard and we forced laws through” by abusing Presidential executive orders with “a pen”, but now Trump and the Republicans (who happened organize themselves well enough to to win power across the important houses of government at every level) just want to change all the good we tried to impose through executive action.

    While Obama has professed a peaceful transition his actions speak much louder. Pushing American troops the the Russian border, looking the other way on Isreal, giving himself and his VP presidential medals, last minute actions on monuments and National Parks, that pen sure has been busy Mr. Constitution. It does not seem that the Obama’s are exiting with the same kind of grace of presidents past and if Washington, NYC or any other major city do turn violent on inauguration day you could chalk it up to inaction and statements that do nothing to encourage a peaceful process. Michelle Obama’s loss of hope is a great example. Maybe she is being honest, but gracious, classy, supporting peaceful process, um, no.

    Add to this the whole Russian spy narrative as a reason Hillary Clinton failed (not that she was outworked or anything). Now that this narrative is being embarrassingly debunked and turned into another colossal failure the next narrative/target is the FBI through a DOJ probe. It’s not into Hillary Clinton’s fast-and-loose home server, open for the world’s lamest hackers to access top state secretes by not going through official channels, but rather, the FBI departments who wanted to investigate her while she was Secretary of State selling off bits of America to the highest donor to CGI and the Clinton foundation.

    What message does this all of this ultimately send?

    With January 20th days away this is just a heads up to what the world hopes for out of days like this in American politics. The world looks to America to promote and preserve peace and stability.

    America must represent a proactive attitude of peace, hope and prosperity. America needs to project this to to the world and be the leaders of a new global movement. No person knows how this Presidential term will turn out, but it can start on a correct path with a peaceful transition and the peaceful inauguration of a new Presidency.

    Americans owe a peaceful transition to themselves, to the world and to its tattered Democratic party. However bruised, the Democrats are Americans, who with their fellow Americans, need to roll up their sleeves and get back to a work within balanced and fair democracy based on principles and ideas established in America and based on its constitution which is admired the world over.

    This week and the entire lead up to the transition needs to be about peace and prosperity.

    Peace is in your hands America, and that non-violent peace starts with the American people participating in a peaceful process.

  • Trader Warns: The "Cure-Through-Greater-Inequality" Paradigm Just Snapped

    Investors won’t be able to trade markets if they can’t settle on a base-case scenario, and, as Bloomberg's Richard Breslow warns, they have to accept that some unknowns are less unknown than others.

    Every tweet that restates what Donald Trump has been saying consistently for many months shouldn’t come as a surprise to traders and send global asset prices into a tizzy.

     

    The same goes for today’s speech by U.K. Prime Minister Theresa May.

     

    If people are on edge waiting for the next installment on protectionism or a hard Brexit, it should be because their positions would be affected on the chance that the messages are reversed, not reiterated.

    There seems to be this enduring tendency for market participants to believe that these politicians will “come to their senses” and this will all have been campaign or negotiating tactics.

    A bad dream. It’s why his election night victory speech had such a profound affect.

    But whether you like what’s going on or not, you need to position for the most likely scenarios and what you think it means for markets. On the latter, opinions may differ and that’s all right. But don’t feign being surprised that some pretty remarkable things are being said and proposed — regularly.

    For years, post-financial crisis policy was conducted on the self-serving belief that it works best by propping up asset (especially equity) prices, which will then cause some of the goodies to trickle down… known in the non-official journals as “cure through greater inequality”.

    Traders, and I guess the clever people who program computers, can’t get this out of their heads…

    Of course we’ll eventually get market-friendly prescriptions.

     

    So we’ll always price for that outcome.

     

    It’s a big part of why geopolitical events have notoriously had such little affect on markets.

     

    There was always more liquidity in the bag.

    It really isn’t profound to point out that if global politics turn decidedly ugly, it could act as a drag on world growth…

    Unless you assume you're owed a policy response just as soon as it happens. Now that’s an assumption that should be weighed carefully!

  • "Common Sense" – Addressed To The Inhabitants Of 2017 America

    Submitted by Jim Quinn via The Burning Platform blog,

    “Without the pen of the author of Common Sense, the sword of Washington would have been raised in vain.” – John Adams

    Thomas Paine was born in 1737 in Britain. His first thirty seven years of life were pretty much a series of failures and disappointments. Business fiascos, firings, the death of his first wife and child, a failed second marriage, and bankruptcy plagued his early life. He then met Benjamin Franklin in 1774 and was convinced to emigrate to America, arriving in Philadelphia in November 1774. He thus became the Father of the American Revolution with the publication of Common Sense, pamphlets which crystallized opinion for colonial independence in 1776.

    The first pamphlet was published in Philadelphia on January 10, 1776, and signed anonymously “by an Englishman.” It became an instantaneous sensation, swiftly disseminating 100,000 copies in three months among the two and a half million residents of the 13 colonies. Over 500,000 copies were sold during the course of the American Revolution. Paine published Common Sense after the battle of Lexington and Concord, making the argument the colonists should seek complete independence from Great Britain, rather than merely fighting against unfair levels of taxation. The pamphlets stirred the masses with a fighting spirit, instilling in them the backbone to resist a powerful empire.

    It was read aloud in taverns, churches and town squares, promoting the notion of republicanism, bolstering fervor for complete separation from Britain, and boosting recruitment for the fledgling Continental Army. He rallied public opinion in favor of revolution among layman, farmers, businessmen and lawmakers. It compelled the colonists to make an immediate choice. It made the case against monarchy, aristocracy, tyranny and unfair taxation, offering Americans a solution – liberty and freedom. It was an important precursor to the Declaration of Independence, which was written six months later by Paine’s fellow revolutionaries.

    Paine’s contribution to American independence 241 years ago during the first American Fourth Turning cannot be overstated. His clarion call for colonial unity against a tyrannical British monarch played a providential role in convincing farmers, shopkeepers, and tradesmen reconciliation with a hereditary monarchy was impossible, and armed separation was the only common sense option. He made the case breaking away from Britain was inevitable, and the time was now. Armed conflict had already occurred, but support for a full-fledged revolution had not yet coalesced within the thirteen colonies. Paine’s rhetorical style within the pamphlets aroused enough resentment against the British monarchy to rally men to arms, so their children wouldn’t have to fight their battles.

    “I prefer peace, but if trouble must come, let it be in my time that my children may know peace.” – Thomas Paine

    Paine did not write Common Sense or The American Crisis pamphlets for his contemporaries like John Adams, Samuel Adams, Jefferson, Madison, or Franklin. These intellectual giants were already convinced of the need to permanently break away from the British Empire and form a new nation. Paine wrote his pamphlets in a style understandable to the common man, rendering complex concepts intelligible for the average citizen. Paine seized this historic moment of crisis to provide the intellectual basis for a republican revolution. To inspire his citizen soldiers, George Washington had Paine’s pamphlets read aloud at their encampments.

    “These are the times that try men’s souls: The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like Hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives everything its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as freedom should not be highly rated.” – Thomas Paine – The American Crisis

    The wealthy landowners and firebrands who comprised the Continental Congress leadership were not the audience Paine was trying to sway. They were focused on how a Declaration of Independence would affect the war effort. They were deficient in making their case to the less informed populace.

    Without public support and volunteers to fight the Redcoats, the revolution would have failed. Paine’s indispensable contribution to our country’s independence was initiating a public debate and disseminating ideas about independence among those who would need to do the fighting and dying if independence was to be achieved.

    Paine was able to synthesize philosophical enlightenment concepts about human rights into common sense ideas understood by ordinary folks. Paine was not a highly educated intellectual and trusted the common people to make sound assessments regarding major issues, based upon wisdom dispensed in a common sense way. He used common sense to refute the professed entitlements of the British ruling establishment. He used common sense as a weapon to de-legitimize King George’s despotic monarchy, overturning the conventional thinking among the masses.

    Paine was able to fuse the common cause of the Founding Fathers and the people into a collective revolutionary force. Even though their numbers were small, Paine convinced them they could defeat an empire.

    “It is not in numbers, but in unity, that our great strength lies; yet our present numbers are sufficient to repel the force of all the world” – Thomas Paine, Common Sense

    Paine didn’t know he was propelling the American Revolution Fourth Turning towards its successful climax when he wrote those pamphlets. His use of the term Crisis as the title to his second group of pro-revolutionary pamphlets displayed his grasp of the mood in the colonies toward the existing social order. The majority of the 2.5 million people living in the 13 colonies in 1776 were native born. Their loyalty to a distant monarch, treating them with contempt and taxing them to support his far flung empire, had been waning as time progressed. They were ready to shed the cloak of oppression and Paine gave them the rationale for doing so.

    The American Revolution Crisis was ignited by the fiery Prophet Generation leader Samuel Adams with the provocative Boston Tea Party in 1773. The colonial tinderbox was ignited as Adams’ committees of correspondence rallied resistance against the Crown and formed a political union among the 13 colonies. After the battles of Lexington & Concord, arming of militias and the formation of the Continental Army under command of George Washington, the regeneracy was at hand.

    Paine, as a Liberty Generation nomad, did what his generation was born to do – be a hands on, pragmatic, get it done leader. His vital contribution to the revolution was rousing the colonists with the toughness, resolution, and backbone to withstand the long difficult trials ahead. He, along with other members of his generation – George Washington, John Adams, and Francis Marion, did the heavy lifting throughout the American Revolution.

    They knew they would hang if their labors failed, but the struggle for liberty against a tyrannical despot drove them forward against all odds. Paine’s pamphlets, followed shortly thereafter by the Declaration of Independence, marked the regeneracy of the first American Fourth Turning, as solidarity around the cause of liberty inspired by brave words and valiant deeds, propelled history towards its glorious climax at Yorktown.

    When you’re in the midst of a Fourth Turning it is hard to step back and assess where you are on a daily basis. This Fourth Turning began in September 2008, with the global financial implosion created by the Fed and their Wall Street puppet masters. We have just achieved the long awaited regeneracy as Trump has stepped forth as the Grey Champion to lead a revolution against the corrupt tyrannical establishment.

    The election of Trump did not mark the end for the Deep State, but just the beginning of the end. Just as Paine’s Common Sense and the Declaration of Independence denoted the beginning of a long string of bloody trials and tribulations, Trump’s ascendency to the presidency has marked the beginning of a battle – with the outcome dependent upon our response to the clashes ahead.

    The regeneracy spurred by Thomas Paine and the nation’s Founding Fathers in 1776 was followed by five years of ordeal, misery, misfortune, bloody routs, and numerous junctures where total defeat hung in the balance. Lesser men would have abandoned the cause during the dark bitter winter at Valley Forge in 1778.

    The shocking victory by Trump has revealed the depth of corruption among the corporate mass media, both political parties, surveillance agencies, and shadowy Deep State moneyed players behind the scenes. The ivory tower D.C. politicians, their entitlement culture, blatant corruption, vile disregard for the Constitution, and complete disregard for the plight of average Americans living outside their bastions of liberal elitism (NYC, L.A., S.F., D.C., Chicago), have shown their true colors since November 8.

    Trump utilized the same populist messaging invoked by Paine in his Common Sense pamphlets during his unorthodox presidential campaign. He mobilized the large alienated silent majority who has been left behind as the globalists, corporatists, and militarists reaped the rich rewards of a growing corporate fascist surveillance state. Average Americans in flyover country watched as the fetid swamp creatures in the mainstream media, along with debased political establishment hacks, Hollywood elites, left wing billionaires, and so called social justice warriors coalesced behind a criminal establishment candidate. The out of touch elite have controlled the government for decades, treating the country and its people like a two dollar whore.

    Just as Paine hit a nerve among the great unwashed masses, Trump united blue collar workers, small business owners, family men, working mothers, guns rights champions, disaffected conservatives, realistic libertarians, disaffected millennials and various anti-establishment types sick and tired of the status quo. He gave voice to the little man with his in your face populist rhetoric against the corrupt dominant elites.

    His plain spoken, aggressive, no holds barred, pugnacious approach to crushing his enemies rallied millions to his cause. The Make America Great Again revolution has only just begun and the violent, vitriolic pushback from the vested interests are only the opening volleys in this Second American Revolution. The entrenched Deep State establishment will concede nothing. Tyranny will not be defeated without bloodshed.

    “Power concedes nothing without demand. It never did and it never will. Find out just what people will submit to, and you have found out the exact amount of injustice and wrong which will be imposed upon them; and these will continue until they are resisted with either words or blows or both. The limits of tyrants are prescribed by the endurance of those whom they oppress.” – Thomas Paine

    The same common sense Paine used to argue against a tyrannical, oppressive hereditary monarchy applies today when judging our corrupt, authoritarian, co-opted government. His themes of society as a blessing, government as evil, and revolution as inevitable are as applicable today as they were 241 years ago. As we approach Trump’s inauguration it has become clear the ruling elite feel threatened and are using their control of the media, intelligence services, military, and financial system to try and undermine his presidency before it begins.

    As their fake news propaganda falls on the deaf ears of disgusted Americans, their next ploy will be violence, war or assassination. The vested interests have no intention of relinquishing their power and wealth, just as King George and his Parliament had no intention of allowing the colonies to form an independent republic.

    If you thought voting Trump into the office of the president constituted a victory, you are badly misreading historical precedent and the inevitable paths of Fourth Turnings. The fight is just beginning. The leftist social justice warriors, their wealthy elite puppeteers, the neo-con military industrial complex warmongers, globalists, multi-culturists, and surveillance state apparatchiks have all made it clear they will violently and rhetorically, through their corporate media mouthpieces, resist Trump and his common man revolution.

    I don’t know if the normal people who supported Trump realize how abnormal, deviant, and despicable their opponents are. Blood will be spilled. Violence will beget violence. The country is already split and the divide will only grow wider. Someone will win and someone will lose. Our choices will matter.

    “The seasons of time offer no guarantees. For modern societies, no less than for all forms of life, transformative change is discontinuous. For what seems an eternity, history goes nowhere – and then it suddenly flings us forward across some vast chaos that defies any mortal effort to plan our way there. The Fourth Turning will try our souls – and the saecular rhythm tells us that much will depend on how we face up to that trial. The saeculum does not reveal whether the story will have a happy ending, but it does tell us how and when our choices will make a difference.”  – Strauss & Howe – The Fourth Turning

    In Part Two of this article I will try to show how Paine’s Common Sense, even though written three generations ago, has essential pertinence during these troubled times of our current Fourth Turning.

  • US F-16 Photographed In Mock Dogfight With Russian Su-27 Above Area 51

    A curious sight was observed in the skies above Area 51 in Nevada, on November 8, the day Donald Trump was elected President, by vacationing air traffic controller Phil Drake. According to Drake, the photographs below all taken by him, show a Russian-built Su-27P fighter jet taking on a US Air Force F-16 engaged in a mock dogfight training mission.


    The moment a US F-16 was caught in a mock dogfight with a Russian SU-27 fighter

    Drake, a 42-year-old enthusiast from Hampshire in the UK, told the Mail he was visiting the desert surrounding Area 51 on the day of the Presidential election, and hoped to see some fast jets involved in a training mission. Instead, what he photographed appears to have been Russian Su-27 involved in a combat training with a US fighter jet.

    Drake said the Russian jet was a Su-27P Flanker-B, which has never been officially imported into the United States.


    Drake said the aircraft was a Russian SU-27P Flanker-B with Soviet style camouflague


    The jets performed a series of high-speed passes during an intense training mission

    “This aircraft was anonymous and unidentifiable, apart from the Soviet style camouflage it wore,” he said. “After they finished their mission they flew into Groom Lake’s highly restricted airspace.” Shooting from Tikaboo Valley, near Groom Lake (Area 51’s official name), Drake had to push his camera zoom to the limit to document the incident.

    Drake’s location outside Area 51

    He said: “The planes were operating above 20,000 feet, and a couple of miles east of me, so the distance between me and the planes was at least six miles. They were literally specks in the sky, but of course that’s the reason that no-one has photographed them before.

    Drake believes these are the first pictures of a single-seat Sukhoi Su27 Flanker – on a training mission or otherwise – inside the United States.

    ‘Initially, during the mission, the aircraft were just outside of Area 51 airspace.

    “The Americans practice air to air combat with Russian aircraft to give them an advantage in combat. They also try out new weapons systems on aircraft to test their effectiveness against a bona fide Russian-built target.”

    According to Drake, “the Flanker is rumoured to have been flying from Groom Lake for nearly 20 years, but no-one has ever managed a definitive photograph to prove it does exist. This sequence of photos is the first proof that the Americans are flying this aircraft, which is the premier Air Defence Fighter in use with the Russian and Chinese Air Forces.”

    He continued: “Things went quiet around 1300. Very quiet. Nothing moved for two hours and I was thinking of moving to another vantage point, such as Queen City Summit, or maybe the Powerlines Overlook. Then the sound of jet noise caught my attention and that’s when I got my first sight of a Groom Lake Su-27 Flanker.”

    “Flying NE at around 30,000 feet leaving an intermittent contrail. The time was 1500 and the sun was moving to the west as the Flanker and a F-16 gave me a private 25 minute air display. The pair seemed to perform a series of head on intercepts at descending altitudes from 30,000 feet to around 20,000 feet, only a mile or two to the east of me. This meant they were beautifully illuminated by the afternoon sun. After the head on intercept, the pair would break into a turning dogfight, with the Flanker using it tremendous maneuverability to try and get behind the F-16. “

    “I took a long series of photographs, but as the aircraft were fairly high my autofocus couldn’t cope. I had to shoot in manual mode, constantly moving the focusing ring to attempt to get some reasonable images. The Su-27 was clearly a single seater, a Su-27P Flanker-B.”

    “This Flanker was in the classic 1990’s two-tone blue colour scheme, with white nose and white fin tips. A very different aeroplane. There had been rumours that the US had obtained two single seat Flankers from Belarus in 1996 or 1997, so I figured it should have been one of them.”

    “After the final dogfight, when I was lucky enough to catch on camera the F-16 flashing directly in front of the Flanker, the pair climbed back to 30,000 feet or so, and headed SW back into Groom Lake restricted airspace. Interestingly the Flanker left a solid contrail, while the F-16 left none despite being at a similar altitude.”

    * * *

    There has been no official statement from either the US Air Force, the Dept of Defense or Dept of Energy, on these curious, perhaps historic, photographs emanating from one of the most secretive US army bases in the world.

  • Liberal Preppers Are "Tired Of Being Perceived As Wusses" – Stock Up On Guns, Food As Trumpocalypse Looms

    Submitted by Shane Dixon Kavanaugh via Vocativ

    With Trump on the horizon, the survivalist movement — long a pastime of the right — is picking up progressive converts fast.

    Colin Waugh bought a shotgun four weeks before November’s election.

    An unapologetic liberal, he was no fan of firearms. He had never owned one before. But Waugh, a 31-year-old from Independence, Missouri, couldn’t shake his fears of a Donald Trump presidency — and all of the chaos it could bring. He imagined hate crimes and violence waged by extremists emboldened by the Republican nominee’s brash, divisive rhetoric. He pictured state-sanctioned roundups of Muslims, gays, and outspoken critics.

    “I kept asking myself, ‘Do I want to live under tyranny?’” said Waugh, who supported Bernie Sanders in the Democratic primary and later backed Hillary Clinton. “The answer was absolutely not.”

    With Trump now days away from assuming the White House, Waugh’s preparing for the worst. He’s made “bug-out bags” stuffed with ammo, energy bars, and assorted survival gear for his wife and their three cats. He’s begun stowing water and browsing real estate listings in Gunnison County, Colorado, which he’s determined to be a “liberal safe-haven.” Last month, Waugh added a 9mm handgun to his arsenal.

    His advice to others on the left fearful of the next four years? “Get ready. Pay attention. Keep your wits about you.”

    Waugh’s not alone. He is among a new cadre embracing extreme self-reliance in the wake of Trump’s surprising victory. Long a calling among conservatives spooked by big government boogymen and calamitous natural disasters, the so-called prepper movement is gaining a decisively liberal following.

    “We’re tired of being perceived as wusses who won’t survive when shit hits the fan,” said Stacy, a Texas Democrat who recently caught the prepper bug. She spoke with Vocativ on the condition we not publish her last name. “I, for one, don’t like to be thought of as some precious snowflake.”

    After years cast as a fringe survival group, preppers entered a kind of golden age during the Obama presidency. A horrific housing crash and the spectacle of Hurricane Sandy helped give rise to reality television shows like Doomsday Preppers and Doomsday Bunker, and fueled a multi-billion dollar survival industry. Branded by some as a foreign-born, gun-grabbing socialist, Obama aroused deep suspicion among the patriot groups, right-wing conservatives, and apocalyptic Christians at the center of the growing movement.

    Trump’s provocative posturing and unpredictability is now inspiring a fresh wave of panic on the left. Those who spoke with Vocativ have envisioned scenarios that could lead to military coups led by loyalists of the president-elect and internment camps packed with political opponents, bloody social unrest and an all-out civil or nuclear war. Sound bonkers? Perhaps. But, for many, so was the prospect of a President Trump.

    “It’s the nature of the political beast,” said Kevin O’Brien, a conservative prepper and realtor who specializes in off-the-grid properties in eastern Tennessee. “Obama had many on the right really wound up. Now it’s the left’s turn.”

    Lib preppers

     

    The signs of change are surely in the air. Groups that cater to gun-toting bleeding hearts — such as the aptly named Liberal Gun Club — say they’ve seen a surge in paid membership since the election. Candid talk of disaster preparedness among progressives is showing up on social media. Even companies that outfit luxury “safe rooms” — which protect their wealthy owners from bombs, bullets, and chemical attacks — attribute recent boosts in business to the incoming administration.

    “I don’t think we’d have the same level of interest if Hillary had been elected president,” Tom Gaffney, whose fortified home shelters at Gaffco Ballistics run as high as $400,000, told Vocativ in an interview.

    Looking for likeminded folks to weather the Trumpocalypse, Waugh started a private Facebook group called the Liberal Prepper shortly after the election. In nine weeks, it’s drummed up more than 750 members, all of whom are individually screened and vetted, Waugh said. Dozens more flock to it daily.

    Few are wasting precious time. They trade tips on survival swag and solicit recommendations for solar panels, firearms, and raising chickens. There are discussions on homesteading and home safety. Links to news stories about the president-elect or signs of instability around the globe are never in short supply.

    Occasionally, posts on the Liberal Prepper seem to veer close to parody. One debate thread last week centered around the merits of stocking up on recycled toilet paper rolls versus buying Angel Soft, a brand produced by Koch industries, a notorious climate change foe. And in another discussion, vegetarian and vegan members talked about the best meat- and dairy-free food supplies to have during a sustained crisis.

    In a smaller Facebook group, Progressive Liberal Preppers, members who blacksmith, bow hunt, and operate ham radios are eager to teach their skills with others, said one the site’s administrators, who goes by the name of Blythe Bonnie. “The next thing we’re going to do is a class on home brewing and winemaking,” said Bonnie, a lifelong Democrat and 70-year-old now living in Arkansas.

    While most of these liberal preppers say they are readying for any disaster — natural, manmade, or even zombie —  a doomsday scenario at the hands of a President Trump continues to be a primary concern.

    “With the new administration I worry about Nazi-style camps that would include my wife, our twins and myself,” said Melissa Letos, who lives with her family on a five-acre spread near Portland, Oregon. In a recent interview, she said she raises chickens, strives to keep a year’s supply of canned food, and is able to hold her own with a firearm. She and her family plan to a build a bunker-style basement in the future.

    Even as Letos and other liberals brace for bedlam, some longtime preppers worry that others in the movement have let their guard down. Michael Snyder, author of The Economic Collapse blog, recently warned against those on the right who seemed overly optimistic about a Trump presidency. “Everyone is feeling so good about things, very few people still seem interested in prepping for hard times ahead,” he wrote, raising the specter of financial instability in Europe and a potential trade war with China. “It is almost as if the apocalypse has been canceled and the future history of the U.S. has been rewritten with a much happier ending.”

    For Waugh and his liberal peers, the apocalypse may have just begun. “Fear is an unfortunate catalyst for a lot of folks,” he said. “But there are still too many caught up in the idea that the system is infallible and that it will persevere and prevail.”

  • Julian Assange Responds Amid Growing Extradition Speculation

    Five days ago, Wikileaks' Founder Julian Assange agreed to US extradition if Chelsea Manning was granted clemency by President Obama…

    This evening we got confirmation that Obama has indeed granted Manning clemency.

    By way of background, we noted previously, Assange has been living in the Ecuadoran embassy in London since June 2012 to avoid extradition to Sweden to face sexual assault allegations. The Australian former computer hacker said he fears Stockholm will in turn extradite him to the US, where he angered Washington over WikiLeaks' publication of thousands of US military and diplomatic documents leaked by former US soldier Manning. The full details of which can be found here…

    Interestingly, Assange's offer comes just days after his uncharacteristically emotional interview with Sean Hannity…

    "I have been detained illegally, without charge for six years, without sunlight, lots of spies everywhere. It's tough… but that's the mission I set myself on. I understand the kind of game that's being played – big powerful actors will try and take revenge...it's a different thing for my family – I have young children, under 10 years old, they didn't sign up for that… and I think that is fundamentally unjust… my family is innocent, they didn't sign up for that fight."

    And it is clear from the initial response from Wikileaks that Assange's biggest fear – and perhaps rightly so – was receiving a fair trial under an Obama/Lynch justice system…

    Mr Assange added:

    Followed by a full statement.

    Statement from Mr. Julian Assange

    I welcome President Obama's decision to commute the sentence of Ms. Chelsea Manning from 35 years to time served, but Ms. Manning should never have been convicted in the first place. Ms. Manning is a hero, whose bravery should have been applauded not condemned. Journalists, publishers, and their sources serve the public interest and promote democracy by distributing authentic information on key matters such as human rights abuses, and illegal acts by government officials. They should not be prosecuted. In order for democracy and the rule of law to thrive, the Government should immediately end its war on whistleblowers and publishers, such as Wikileaks and myself.

    Mr. Assange's lawyers also made a statement

    Mr. Assange welcomes President Obama's decision to commute Chelsea Manning's sentence. Whistleblowers like Chelsea Manning serve the public interest. She should never have been prosecuted and sentenced to decades in prison. She should be released immediately. Likewise, publishers of truthful information serve the public interest, promote democracy, and should not be prosecuted. The war on whistleblowers should end now and should not be continued in the new Administration. For many months, I have asked the DOJ to clarify Mr. Assange's status. I hope it will soon. The Department of Justice should not pursue any charges against Mr. Assange based on his publication of truthful information and should close its criminal investigation of him immediately."

    So, to sum up, it appears that US extradition is on the cards for Julian Assange as he is "confident" of a fair trial under President Trump – a very different situation to Obama's Justice Department which "prevented a fair jury."

    We wish him luck.

  • 56 Years Ago Today, Eisenhower Warned Americans Of "The Unwarranted Influence" Of The Deep State

    In his farewell address to the nation 56 years ago, President Dwight D. Eisenhower warned the American people for the first time to keep a careful eye on what he called the "military-industrial complex" that had developed in the post-World War II years. Fiscally conservative Eisenhower had been concerned about the growing size and cost of the American defense establishment since he became president in 1953, and as History.com notes, in his last presidential address to the American people, he expressed those concerns in terms that shocked many of his listeners.

    Eisenhower began by describing the changing nature of the American defense establishment since World War II. No longer could the U.S. afford the “emergency improvisation” that characterized its preparations for war against Germany and Japan. Instead, the United States was “compelled to create a permanent armaments industry” and a huge military force. He admitted that the Cold War made clear the “imperative need for this development,” but he was gravely concerned about “the acquisition of unwarranted influence…by the military-industrial complex.” In particular, he asked the American people to guard against the “danger that public policy could itself become the captive of a scientific-technological elite.”

     

    Eisenhower’s blunt language stunned some of his supporters. They believed that the man who led the country to victory in Europe in World War II and guided the nation through some of the darkest moments of the Cold War was too negative toward the military-industrial complex that was the backbone of America’s defense. For most listeners, however, it seemed clear that Eisenhower was merely stating the obvious. World War II and the ensuing Cold War resulted in the development of a large and powerful defense establishment. Necessary though that development might be, Eisenhower warned, this new military-industrial complex could weaken or destroy the very institutions and principles it was designed to protect.

    From January 17th 1961… ("unwarranted influence" begins at 8:41)

     

    Full – frighteningly prophetic – Speech:

    Good evening, my fellow Americans.

    First, I should like to express my gratitude to the radio and television networks for the opportunities they have given me over the years to bring reports and messages to our nation. My special thanks go to them for the opportunity of addressing you this evening.

    Three days from now, after half century in the service of our country, I shall lay down the responsibilities of office as, in traditional and solemn ceremony, the authority of the Presidency is vested in my successor. This evening, I come to you with a message of leave-taking and farewell, and to share a few final thoughts with you, my countrymen.

    Like every other — Like every other citizen, I wish the new President, and all who will labor with him, Godspeed. I pray that the coming years will be blessed with peace and prosperity for all.

    Our people expect their President and the Congress to find essential agreement on issues of great moment, the wise resolution of which will better shape the future of the nation. My own relations with the Congress, which began on a remote and tenuous basis when, long ago, a member of the Senate appointed me to West Point, have since ranged to the intimate during the war and immediate post-war period, and finally to the mutually interdependent during these past eight years. In this final relationship, the Congress and the Administration have, on most vital issues, cooperated well, to serve the nation good, rather than mere partisanship, and so have assured that the business of the nation should go forward. So, my official relationship with the Congress ends in a feeling — on my part — of gratitude that we have been able to do so much together.

    We now stand ten years past the midpoint of a century that has witnessed four major wars among great nations. Three of these involved our own country. Despite these holocausts, America is today the strongest, the most influential, and most productive nation in the world. Understandably proud of this pre-eminence, we yet realize that America’s leadership and prestige depend, not merely upon our unmatched material progress, riches, and military strength, but on how we use our power in the interests of world peace and human betterment.

    Throughout America’s adventure in free government, our basic purposes have been to keep the peace, to foster progress in human achievement, and to enhance liberty, dignity, and integrity among peoples and among nations. To strive for less would be unworthy of a free and religious people. Any failure traceable to arrogance, or our lack of comprehension, or readiness to sacrifice would inflict upon us grievous hurt, both at home and abroad.

    Progress toward these noble goals is persistently threatened by the conflict now engulfing the world. It commands our whole attention, absorbs our very beings. We face a hostile ideology global in scope, atheistic in character, ruthless in purpose, and insiduous [insidious] in method. Unhappily, the danger it poses promises to be of indefinite duration. To meet it successfully, there is called for, not so much the emotional and transitory sacrifices of crisis, but rather those which enable us to carry forward steadily, surely, and without complaint the burdens of a prolonged and complex struggle with liberty the stake. Only thus shall we remain, despite every provocation, on our charted course toward permanent peace and human betterment.

    Crises there will continue to be. In meeting them, whether foreign or domestic, great or small, there is a recurring temptation to feel that some spectacular and costly action could become the miraculous solution to all current difficulties. A huge increase in newer elements of our defenses; development of unrealistic programs to cure every ill in agriculture; a dramatic expansion in basic and applied research — these and many other possibilities, each possibly promising in itself, may be suggested as the only way to the road we wish to travel.

    But each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs, balance between the private and the public economy, balance between the cost and hoped for advantages, balance between the clearly necessary and the comfortably desirable, balance between our essential requirements as a nation and the duties imposed by the nation upon the individual, balance between actions of the moment and the national welfare of the future. Good judgment seeks balance and progress. Lack of it eventually finds imbalance and frustration. The record of many decades stands as proof that our people and their Government have, in the main, understood these truths and have responded to them well, in the face of threat and stress.

    But threats, new in kind or degree, constantly arise. Of these, I mention two only.

    A vital element in keeping the peace is our military establishment. Our arms must be mighty, ready for instant action, so that no potential aggressor may be tempted to risk his own destruction. Our military organization today bears little relation to that known of any of my predecessors in peacetime, or, indeed, by the fighting men of World War II or Korea.

    Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But we can no longer risk emergency improvisation of national defense. We have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security alone more than the net income of all United States cooperations — corporations.

    Now this conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every Statehouse, every office of the Federal government. We recognize the imperative need for this development. Yet, we must not fail to comprehend its grave implications. Our toil, resources, and livelihood are all involved. So is the very structure of our society.

    In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.

    Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades. In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.

    Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers. The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present — and is gravely to be regarded.

    Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.

    It is the task of statesmanship to mold, to balance, and to integrate these and other forces, new and old, within the principles of our democratic system — ever aiming toward the supreme goals of our free society.

    Another factor in maintaining balance involves the element of time. As we peer into society’s future, we — you and I, and our government — must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.

    During the long lane of the history yet to be written, America knows that this world of ours, ever growing smaller, must avoid becoming a community of dreadful fear and hate, and be, instead, a proud confederation of mutual trust and respect. Such a confederation must be one of equals. The weakest must come to the conference table with the same confidence as do we, protected as we are by our moral, economic, and military strength. That table, though scarred by many past frustrations — past frustrations, cannot be abandoned for the certain agony of disarmament — of the battlefield.

    Disarmament, with mutual honor and confidence, is a continuing imperative. Together we must learn how to compose differences, not with arms, but with intellect and decent purpose. Because this need is so sharp and apparent, I confess that I lay down my official responsibilities in this field with a definite sense of disappointment. As one who has witnessed the horror and the lingering sadness of war, as one who knows that another war could utterly destroy this civilization which has been so slowly and painfully built over thousands of years, I wish I could say tonight that a lasting peace is in sight.

    Happily, I can say that war has been avoided. Steady progress toward our ultimate goal has been made. But so much remains to be done. As a private citizen, I shall never cease to do what little I can to help the world advance along that road.

    So, in this, my last good night to you as your President, I thank you for the many opportunities you have given me for public service in war and in peace. I trust in that — in that — in that service you find some things worthy. As for the rest of it, I know you will find ways to improve performance in the future.

    You and I, my fellow citizens, need to be strong in our faith that all nations, under God, will reach the goal of peace with justice. May we be ever unswerving in devotion to principle, confident but humble with power, diligent in pursuit of the Nations’ great goals.

    To all the peoples of the world, I once more give expression to America’s prayerful and continuing aspiration: We pray that peoples of all faiths, all races, all nations, may have their great human needs satisfied; that those now denied opportunity shall come to enjoy it to the full; that all who yearn for freedom may experience its few spiritual blessings. Those who have freedom will understand, also, its heavy responsibility; that all who are insensitive to the needs of others will learn charity; and that the sources — scourges of poverty, disease, and ignorance will be made [to] disappear from the earth; and that in the goodness of time, all peoples will come to live together in a peace guaranteed by the binding force of mutual respect and love.

    Now, on Friday noon, I am to become a private citizen. I am proud to do so. I look forward to it.

    Thank you, and good night.

    h/t Jim Quinn's Burning Platform blog

  • North Dakota Lawmakers Want To Legalize Running Over Protesters

    Submitted by Nadia Prupis via TheAntiMedia.org,

    Running over protesters may soon be legal in North Dakota, if conservative lawmakers are successful in advancing legislation introduced last week.

    House Bill Number 1203 (pdf) states that, “Notwithstanding any other provision of law, a driver of a motor vehicle who unintentionally causes injury or death to an individual obstructing vehicular traffic on a public road, street, or highway, is not guilty of an offense.”

    The bill is slated to be heard by the North Dakota’s House Transportation Committee on Friday.

    Rep. Keith Kempenich (R-Bowman), one of the bill’s co-sponsors, told the Bismarck Tribune on Wednesday, “[The roads are] not there for the protesters. They’re intentionally putting themselves in danger.”

    “It’s shifting the burden of proof from the motor vehicle driver to the pedestrian,” Kempenich said.

    Tara Houska, an Indigenous water protector and attorney who has resided at the Dakota Access Pipeline (DAPL) resistance camps since August, told NBC News that the bill was “a direct violation of our First Amendment rights.”

    “It’s shocking to see legislation that allows for people to literally be killed for exercising their right to protest in a public space,” said Houska, who also serves as the national campaigns director for Honor the Earth, an Indigenous-focused environmental nonprofit.

    Water protectors at times blocked roads leading to DAPL construction sites as part of the resistance to the pipeline. Blocking traffic is also an occasional tactic of various environmental and human rights movements.

    Houska also criticized another bill in the legislative lineup that would require North Dakota’s attorney general to sue the federal government to recoup some of the cost of policing the months-long DAPL protests.

    “These [bills] are meant to criminalize the protests with no real concern for constitutional law,” she said.

    Standing Rock Sioux Chairman Dave Archambault II added, “The state claims they want to work closely with the tribe on repairing our relationship with them. Clearly that is not happening when legislation that impacts us is being drafted without consultation, consent, or even basic communication.”

    Allison Renville, an activist from the Lakota nation, saw the bills as an insult to sovereign Native American communities, and expressed concern about the recent naming of Republican Sen. John Hoeven, a supporter of the DAPL pipeline and fossil fuel industry, as chairman of the U.S. Senate Committee on Indian Affairs.

    “This is a really scary time for Indian Country,” Renville told NBC News. “To have such an avid supporter of the oil industry who has consistently stated his support for extractive industry projects on Native lands named to the position as chairman is akin to stepping on our sovereignty.”

     

Digest powered by RSS Digest

Jan 17

Today’s News 17th January 2017

  • CoLD WaR NuT JoB…

    COLD WAR NUT JOB

    .
    CIA

  • Tucker Carlson Takes on DNC Chair Candidate Jehmu Greene and Humilitates Her

    Tucker Carlson delved into a discussion with Jehmu Greene, frontrunner to become the next shill to head up the DNC, and got very specific when it came to the issue of drug prices and Trump’s proposal to import American made drugs from Canada, because our country is partly run by the big pharma industrial complex. The results were telling. Notice every time Jehmu blinks she is, in fact, telling a bald faced lie.

    Partisan politics rules the day. What’s good for the American people, naturally, are secondary concerns to these retrograde water carriers.

     

     

     

    Content originally generated at iBankCoin.com

  • Abolish The CIA

    Submitted by Michael Rozeff via The Ron Paul Institute for Peace & Prosperity,

    Every American who looks at the CIA objectively or in a balanced way and judges it by any number of criteria, such as moral, legal and pragmatic, should reach the conclusion that the CIA should be abolished. JFK wanted to break it into a million pieces. Trump is right to dismiss its intelligence reports about DNC hacking. The CIA war on Trump shows us immediately that the CIA is a rogue organization within the U.S. government and a severe threat to America.

    The CIA is an internal threat to the rule of law and to the government that it supposedly serves. Senator Schumer acknowledges the CIA’s unbridled power, its subversive power, its power to undermine even a president, especially one that wishes to control or alter the organization, when he says:

    “Let me tell you: You take on the intelligence community, they have six ways from Sunday at getting back at you. For a practical, supposedly hard-nosed businessman, he’s being really dumb to do this.”

    Schumer is saying that the CIA is so powerful that a president should not attempt to control it or else! The CIA is so powerful that elections do not matter when it comes to the CIA. The CIA stands alone. The Constitution that empowers the president as the Executive, the boss of government operations, does not matter. Basic American institutions and laws must bow before the threats that the CIA possesses. This is the assessment of a Senator beginning his 4th term and who is the highest ranking Democrat in the Senate in his post as minority leader.

    The CIA is an organization that perpetually undermines traditional American values and moral values. It consistently kills innocent people. It continually causes instability and wars. It undermines other societies and our own. It interferes constantly in foreign nations, to the detriment of them and us. It is an unelected power that challenges elected officials. It favors abuses of power, including torture. Its actual value at generating usable intelligence is minimal, often wrong, often misleading, inaccurate and harmful as in the WMD that were never found in Iraq.

    “The Association for Responsible Dissent estimates that by 1987, 6 million people had died as a result of CIA covert operations. Former State Department official William Blum correctly calls this an "American Holocaust."

     

    This quote and a detailed timeline of CIA atrocities is available.

    William Blum has listed CIA interventions for us.

    All that needs to be done to understand the enormity of CIA crimes against humanity is to associate each of these interventions with the deaths, injuries, disruption of lives and destruction that they have caused. The most recent of these are

    • Afghanistan 1980s *
    • Somalia 1993
    • Yugoslavia 1999-2000 *
    • Ecuador 2000 *
    • Afghanistan 2001 *
    • Venezuela 2002 *
    • Iraq 2003 *
    • Haiti 2004 *
    • Somalia 2007 to present
    • Honduras 2009
    • Libya 2011 *
    • Syria 2012
    • Ukraine 2014 *

    The asterisks indicate a case where the CIA overthrew a government.

     As long as Trump is at war with the CIA, a war that the CIA launched against him, not that this matters much because Trump has every right to change the CIA and the CIA has no right to disobey or blacken his name, he should attack the CIA much more completely and thoroughly. It deserves to be attacked. He should abolish it altogether. For a bone to those who have fears that the republic will fall without the CIA, whatever small amount of residual value that is present in its intelligence operations can easily be retained or transferred to other agencies. The latter are already in profuse abundance in Washington. The fact is, however, that the republic is more likely to fall further than it already has in the presence of the CIA than in its absence.

  • 'Golfer-In-Chief' Obama Plays More Rounds Than Any President Since Eisenhower

    20 years after first taking up the game of golf in 1997 – due to basketball injuries – President Obama has worked hard to get his handicap down to "an honest 13," comparable to former golfing presidents as they left office (Nixon 12, Clinton 10, JFK 14).

    However, there is one thing Obama has them all beat with – during his eight years in the White House he played a total of 306 rounds of golf, more than any other president since Dwight Eisenhower.

    As The Telegraph reports, Mr Obama's passion for golf contrasted with that of his predecessor, George W. Bush, who played just 24 times in office. Mr Bush gave up entirely in 2003 because he felt images of him playing seemed insensitive while US soldiers were fighting and dying in Iraq and Afghanistan.

    Other golfing presidents of the modern era, including John F. Kennedy and Bill Clinton, kept their habit away from the public eye as much as possible.

     

     

    Mr Obama tried to do the same but, in an era when a president's movements are constantly documented, pictures proliferated of him pacing manicured greens studying a putt at inopportune moments of national crisis.

     

    Towards the end of his second term it offered ballast for assertions that he had "checked out".

    In the annals of US presidents Mr Obama's final tally of 306 rounds is high, but he was far outstripped by two other men.

    President Dwight Eisenhower played an estimated 800 rounds in office, calling golf "the best game of them all".

     

    And President Woodrow Wilson manged to fit in over 1,000 rounds between 1913 and 1921. Despite all his efforts his wife was a better player.

    Last year US president -elect Donald Trump hammered Mr Obama for "playing more golf than Tiger Woods".

    Mr Trump added: "We don’t have time for this. We have to work. I love golf, I think it’s one of the greats, but I don’t have time."

    But the lure of the links is strong for all presidents, including Mr Trump. Weeks after his election victory Mr Trump was in Florida, playing golf with Tiger Woods. And there were photographs.

    * * *

    And in case you did not believe us – here is the complete list of all 306 rounds…

     

  • This Is What Venezuela's New, Vertical, Banknotes, Now With Added Zeros Look Like

    We’ve all been eagerly waiting to see them: Venezuela’s crisp,brand new yet soon to be hyperinflated with many more zeros banknotes, and finally, after various failed attempts to deliver the new bills to Caracas (which according to Maduro were at least partially aborted due to pesky CIA meddling) they have arrived. And they are vertical.

    A new bank note of 500 Bolivars held outside a bank in Caracas. Jan. 16, 2017.


    A new bank note of 5,000 Bolivars outside a bank in Caracas. Jan. 16, 2017.

    Eager to get their hands on the new currency, AP writes that Venezuelans stood in long ATM lines Monday to take out new, larger-denominated bills “that President Nicolas Maduro hopes will help stabilize the crisis-wracked economy.” Of course, they will do no such thing as the pieces of paper in circulation have absolutely no bearing on the underlying economy, or its hyperinflation, but it will take at least several more shipments of new banknotes before the Maduro figures this out.

    As a reminder, in taking a page out of the Indian demonetization playbook, Maduro last month said he was scrapping circulation of the most used bill, the 100-bolivar note, and replacing it with new bills ranging from 500 to 20,000 bolivars. 

    The local were appalled. Residents in Caracas expressed shock at seeing bills with so many zeros — a sign of how worthless the bolivar has become amid triple-digit inflation and a collapse in foreign exchange reserves that has led to severe food shortages.

    Our advice: get used to it – the fun is only just starting. Ask Zimbabwe.

    “I never thought I’d have such a big bill in my hands,” Milena Molina, a 35-year-old sales clerk, said as she inspected crisp, new 500-bolivar notes she had just withdrawn. “But with the inflation we’re suffering, the notes we had weren’t worth anything and you always had to go around with huge packages of bills.”

    The Weimar Republic agrees.

    Monday’s rollout of the first batch of imported notes came weeks later than the government had originally promised. Maduro last month ordered the 100-bolivar note to be withdrawn from use well before the replacement bills were ready, leading to widespread chaos as Venezuelans rushed to spend the bills before they were taken out of circulation. With cash running out, looting and protests were widespread – although they were widespread before the currency exchange too, so there wasn’t much of a difference – and Maduro had to backtrack. On Sunday, he extended for the third time, until Feb. 20, the deadline for the 100-bolivar note to remain legal tender.

    While the new denominations should make cash transactions easier the relief may be short-lived: since the largest, 20,000-bolivar note is worth less than $6 on the widely used black market, Maduro already has to order a fresh batch with at least one more zero. With inflation forecast by the International Monetary Fund to hit four digits this year, few economists expect the currency to rebound any time soon.

    Seeking to combat the black market, the government on Monday inaugurated four currency exchange houses near the border with Colombia where Venezuelans will be able to purchase Colombian pesos at a favorable exchange rate of 4 pesos per bolivar. The bolivar currently is worth just a quarter of that amount at exchange houses over the border in Colombia.

    And while on the surface this risk-free arbitrage guaranteeing 400% returns would be a slam-dunk trade, there are two problems.

    First, while Gov. Jose Vielma Mora of Tachira state said the Venezuelan central bank has at its disposal a large amount of pesos to meet what is expected to be strong demand for hard currency, purchases would be capped at between $200 and $300. A second, and bigger proble, is that it was hard to find anyone Monday who had managed to buy pesos.

    Opponents of Maduro said that in trying to set an exchange rate for pesos, authorities are paving the way for corruption, saying only certain individuals and companies close to the government will be able to purchase them at the official rate. They are, of course, right.

  • Merkel Says She Is Ready To "Fight A Generational Battle" With Trump To Preserve Liberal Democracy And Trade

    Shortly after Germany retaliated to Trump’s overnight press attack, when German economy minister Sigmar Gabriel said on Monday morning that Germans would gladly buy US automobiles if only America could “build better cars”, and that – responding to Trump’s criticism of Germany’s “catastrophic” refugee policy – he said there “is a link between America’s flawed interventionist policy, especially the Iraq war, and the [European] refugee crisis”, Merkel fired her own shot across the bow of Trump’s proposed protectionism, when she told industry leaders late on Monday that she would remain committed to free trade, rebutting Trump’s comments about a border taxes on car imports.

    Taking advantage of the anti-populist wave stirred by Trump, Merkel, speaking to the German Chamber of Commence and Industry in Cologne, urged industry leaders to remain supportive of the German government in the forthcoming Brexit negotiations between Britain and the European Union. “We can’t let anyone divide us,” she said quoted by Reuters.

    As far as free trade and open markets go, Merkel told the industrialists her government was prepared to fight to preserve them.

    “We’ve got to fight this battle, if for no other reason than principle,” Merkel said, referring to Germany’s commitment to the free trade, and asking German business to “join her in defending liberal democracy and trade”, saying “in every generation one has to fight for one’s ideals.”

    “I’m ready for that,” Merkel added.

    “I have the impression that we are once again at a crossroads,” Merkel tells a business chamber gala in Cologne, hinting at an ideological crusade to rid the world of backward-looking protectionists.

    Indeed, she then said that halting protectionism is part of the struggle, and would not give up on free-trade deals with the U.S. “I have a lot of resolve, but the number of doubters is growing,” says she’s “deeply convinced” that “embracing competition rather eliminating it is best for human development and for prosperity in Germany.”

    Needless to say, Merkel has never met anyone quite like Trump.

    She then appealed to the audience to resist giving up those principles “too hastily for reasons of short-term gain.”

    Merkel echoed words from her Finance Minister Wolfgang Schaeuble earlier on Monday, who issued a not so thinly veiled warning to Trump over the dangers of protectionist trade policies.

    “Whoever wants growth – and I trust this administration will be a growth-friendly one – must be in favor of open markets,” Schaeuble told the Wall Street Journal in an interview. “Protectionism can afford short-term advantages but is almost always damaging in the long term.”

    Of course, Keynes himself said the same thing about Keynesian economics, the bedrock of all modern economic thinking, but that’s a different topic.

    As for Germany and its preparedness for an “ideological” crusade against Trump and the world’s protectionists, be careful what you wish for.

  • New Video Exposes Anti-Trump Groups Plotting Criminal Acts To Disrupt Inauguration

    In the latest undercover video from Project Veritas, investigators uncovered a group of protesters known as the DC Anti-fascist Coalition plotting to disrupt President-Elect Donald Trump’s inauguration by deploying butyric acid (aka “stink bombs”) at the National Press Club during the Deploraball event scheduled for January 19th.  In a dose of irony, the planning meeting for the attack was held at Comet Ping Pong, the DC pizza restaurant that recently gained infamy as the location of the Pizzagate controversy.

    Apparently “Plan A” of the disaffected agitators was to set off “stink bombs” in the ventilation systems of the building hosting the “Deploraball.”

    “I was thinking of things that ruin, that would ruin the evening, ruin their outfits or otherwise make it impossible to continue with their plans.  Make sure they get nothing accomplished.”

     

    “Yeah, if you had…a pint of butyric acid, I don’t care how big the building is, it’s closing…And this stuff is very efficient, it’s very very smelly, lasts a long time a little of it goes a long way.”

     

    “If you get it into the HVAC system it will get into the whole building.”

    Meanwhile, “Plan B” entailed an effort to simultaneously set off the sprinkler systems throughout the building which had the “added benefit” of sending party goers “outside in the freezing cold.”

    “I’m trying to think through how to get all the sprinklers to go off at once.  There’s usually a piece of like fusible metal or a piece of glass with liquid in it that will blow”

     

    “And the added benefit, everybody is going to walk outside in the freezing cold.”

    Because of the nature of the threats, Project Veritas notes that they notified the FBI, Secret Service and DC Metro Police of the content of this video prior to its release.

    With that, here is the full video:

  • Media Betrayal: Steve Harvey Given Uncle Tom Treatment After Trump Meeting, Nicole Kidman Suffers Pizza-Themed Hit Piece

    Comedian Steve Harvey and actress Nicole Kidman are the latest celebrities on a growing list to come under fire for associating with President-elect Donald Trump, or making pro-Trump statements.

    Harvey has come under vicious attack after meeting with Mr. Trump last Friday to discuss working with incoming HUD secretary Ben Carson on inner-city housing issues. Both Harvey and Carson grew up so poor, and so black, and rose to greatness in their fields – so I think it’s safe to assume they are going to be assets to the Black community. It should also be noted that President Obama’s transition team asked Harvey to do it, which Trump’s team obviously agreed with. In response, the “tolerant left,” including fellow black comedian DL Hughley, has not been kind. 

     

    huangpostIn the media’s latest attack on Harvey, sensitive Asian chef and Super Mario turtle faced author Eddie Huang penned a pithy little hit piece in the New York Times which basically called Harvey (who supported Hillary Clinton) a racist, after the comedian and TV show host made fun of a book cover that Huang had posted on instagram entitled “How to Date a White Woman – a practical guide for Asian men.” Harvey featured the image in a segment on his daytime TV show January 6th, after which he proceeded to crack jokes about how black women don’t like dating Asian men. Literally Hitler.

    Huang, owner of Baohaus Taiwanese restaurant in Manhattan – and author of the book turned TV show “Fresh off the Boat,” has made a fortune off the “Fresh off the boat” franchise – a term which has, for decades, been used as a derogatory slur to describe Asian immigrants who aren’t familiar with American culture. Huang’s whole shtick is the hilarious confusion between Asian and American cultural misunderstandings – so racial comedy using a provocative title.

    davidchangAs long as we’re talking race, are all celebrity Asian chefs this sensitive? If Dave Chappelle wanted to work with the Trump administration to help the black community in a similar capacity as Steve Harvey, do you think Korean chef David Chang would write a whiny little article about Chappelle’s stand-up to increase his visibility? I suspect not, because Chang doesn’t strike me as a sensitive, attention seeking, gold-chain wearing, Super Mario turtle faced opportunist – though I’m sure the left would find someone to write it. Granted, Huang’s opportunistic little hit-piece was related to something he posted on Instagram, however the point is that comedians make racial jokes all the time, and there was really no reason to write that article.

     

     

    Nicole Kidman is yet another celebrity to come under recent fire after making pro-Trump statements to the BBC.  

    “[Trump’s] now elected, and we as a country need to support whoever’s the president because that’s what the country’s based on,”

    Kidman, whose father died while under investigation for his suspected role in a massive pedophile ring, was featured in a recent “pizza themed” hit piece in Australia’s Woman’s Day magazine, which was parroted by the Daily Mail. Perhaps the reference to pizza, which made international news as suspected pedophile code-phrase contained within the Wikileaks dumps, was intended to punish Kidman for simply saying “let’s give Trump a chance?“

    Whatever the case, this is deplorable behavior from the world’s sorest losers.

    So tolerant, so liberal.

    Content originally generated at iBankCoin.com * Follow on Twitter @ZeroPointNow

  • In Defense Of Populism

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    DAVOS MAN: “A soulless man, technocratic, nationless and cultureless, severed from reality. The modern economics that undergirded Davos capitalism is equally soulless, a managerial capitalism that reduces economics to mathematics and separates it from human action and human creativity.”

     

    – From the post: “For the Sake of Capitalism, Pepper Spray Davos”

    One thing I’ve been very careful about not doing over the years is self-identifying under any particular political ideology. I articulated my reasoning in the post, Thank You and Welcome New Readers – A Liberty Blitzkrieg Mission Statement:

    I am not a Democrat or a Republican. I do not consider myself a libertarian, progressive, socialist, anarchist, conservative, neoconservative or neoliberal. I’m just a 38 year old guy trying to figure it all out. Naturally, this doesn’t imply that there aren’t things which I hold dear. I have a strong belief system based on key principles. It’s just that I don’t think it makes sense for me to self-label and become part of a tribe. The moment you self-label, is the moment you stop thinking for yourself. It’s also the moment you stop listening. When you think you have all the answers, anyone who doesn’t think exactly as you do on all topics is either stupid or “paid opposition.”  I don’t subscribe to this way of thinking.

    Despite my refusal to self-identify, I am comfortable stating that I’m a firm supporter of populist movements and appreciate the instrumental role they’ve played historically in free societies. The reason I like this term is because it carries very little baggage. It doesn’t mean you adhere to a specific set of policies or solutions, but that you believe above all else that the concerns of average citizens matter and must be reflected in government policy.

    Populism reaches its political potential once such concerns become so acute they translate into popular movements, which in turn influence the levers of power. Populism is not a bug, but is a key feature in any democratic society. It functions as a sort of pressure relief valve for free societies. Indeed, it allows for an adjustment and recalibration of the existing order at the exact point in the cycle when it is needed most. In our current corrupt, unethical and depraved oligarchy, populism is exactly what is needed to restore some balance to society. Irrespective of what you think of Donald Trump or Bernie Sanders, both political movements were undoubtably populist in nature. This doesn’t mean that Trump govern as populist once he is sworn into power, but there’s little doubt that the energy which propelled him to the Presidency was part of a populist wave.

    Trump understands this, and despite having surrounded himself with an endless stream of slimy ex-Goldman Sachs bankers and other assorted billionaires, his campaign took the following position with regard to Davos according to Bloomberg:

    Donald Trump won’t send an official representative to the annual gathering of the world’s economic elite in Davos, taking place next week in the days leading up to his inauguration, although one of the president-elect’s advisers is slated to attend.

     

    Former Goldman Sachs President Gary Cohn, a regular attendee in the past, told the group he would skip 2017 after being named in December to head the National Economic Council, said people familiar with the conference. Other top Trump appointees will also pass up the forum.

     

    A senior member of Trump’s transition team said the president-elect thought it would betray his populist-fueled movement to have a presence at the high-powered annual gathering in the Swiss Alps. The gathering of millionaires, billionaires, political leaders and celebrities represents the power structure that fueled the populist anger that helped Trump win the election, said the person, who asked for anonymity to discuss the matter. 

    While all of this sounds great, it’s not entirely true. For example:

    Hedge fund manager Anthony Scaramucci is planning to travel to Davos, though. The founder of SkyBridge Capital and an early backer of Trump’s campaign, Scaramucci was named on Thursday as an assistant to the president.

    Not that Scaramucci’s presence should surprise anyone, he’s the consummate banker apologist, anti-populist. Recall what he said last month:

    “I think the cabal against the bankers is over.”

    This guy shouldn’t be allowed within ten feet of any populist President, but Trump unfortunately seems to have a thing for ex-Goldman Sachs bankers.

    While we’re on then subject, let’s discuss Davos for a moment. You know, the idyllic Swiss town where the world’s most dastardly politicians, oligarchs and their fawning media servants will gather in a technocratic orgy of panels and cocktail parties to discuss how best to manage the world’s affairs in the year ahead. Yes, that Davos.

    To get a sense of the maniacal mindset of these people, I want to turn your attention to a couple of Reuters articles published earlier today. First, from Davos Elites Struggle for Answers as Trump Era Dawns:

    DAVOS, Switzerland – The global economy is in better shape than it’s been in years. Stock markets are booming, oil prices are on the rise again and the risks of a rapid economic slowdown in China, a major source of concern a year ago, have eased.

    First report from Davos is in. Everything’s fine.

    And yet, as political leaders, CEOs and top bankers make their annual trek up the Swiss Alps to the World Economic Forum in Davos, the mood is anything but celebratory.

     

    Last year, the consensus here was that Trump had no chance of being elected. His victory, less than half a year after Britain voted to leave the European Union, was a slap at the principles that elites in Davos have long held dear, from globalization and free trade to multilateralism.

     

    Moises Naim of the Carnegie Endowment for International Peace was even more blunt: “There is a consensus that something huge is going on, global and in many respects unprecedented. But we don’t know what the causes are, nor how to deal with it.”

    Thank you for your invaluable insight, Moises.

    The titles of the discussion panels at the WEF, which runs from Jan. 17-20, evoke the unsettling new landscape. Among them are “Squeezed and Angry: How to Fix the Middle Class Crisis”, “Politics of Fear or Rebellion of the Forgotten?”, “Tolerance at the Tipping Point?” and “The Post-EU Era”.

    Ah, a panel on how to fix the middle class. Sounds interesting until you find out who some of the speakers are.

    You really can’t make this stuff up. Now back to Reuters.

    Perhaps the central question in Davos, a four-day affair of panel discussions, lunches and cocktail parties that delve into subjects as diverse as terrorism, artificial intelligence and wellness, is whether leaders can agree on the root causes of public anger and begin to articulate a response.

    This has to be a joke. The public has been yelling and screaming about all sorts of issues they care about from both sides of the political spectrum for a while now. Whether people identify as on the “right” or the “left” there’s general consensus (at least in U.S. populist movements) of the following: oligarchs must be reined in, rule of law must be restored, unnecessary military adventures overseas must be stopped, and lobbyist written phony “free trade” deals must be scrapped and reversed. There’s no secret about how strongly the various domestic populist movements feel on those topics, but the Davos set likes to pretends that these issues don’t exist. They’d rather focus on Russia or identify politics, that way they can control the narrative and then propose their own anti-populist, technocratic solutions.

    A WEF report on global risks released before Davos highlighted “diminishing public trust in institutions” and noted that rebuilding faith in the political process and leaders would be a “difficult task”.

    It’s not difficult at all, what we need are new leaders with new ideas, but the people at Davos don’t want to admit that either. After all, these are the types who unanimously and enthusiastically supported the ultimate discredited insider for U.S. President, Hillary Clinton.

    Moving along, let’s take a look at a separate Reuters article previewing Davos, starting with the title.

    Did you see what they did there? The evaporating trust in globalist elites has nothing to do with “post-truth,” but as usual, the media insists on making excuses for the rich and powerful. The above title implies that elites lost the public truth as a result of a post-truth world, not because they are a bunch of disconnected, lying, corrupt thieves. Like Hillary and the Democrats, they are never to blame for anything that happens.

    With that out of the way, let’s take a look at some of the text:

    Trust in governments, companies and the media plunged last year as ballots from the United States to Britain to the Philippines rocked political establishments and scandals hit business.

     

    The majority of people now believe the economic and political system is failing them, according to the annual Edelman Trust Barometer, released on Monday ahead of the Jan. 17-20 World Economic Forum (WEF).

     

    “There’s a sense that the system is broken,” Richard Edelman, head of the communications marketing firm that commissioned the research, told Reuters.

     

    “The most shocking statistic of this whole study is that half the people who are high-income, college-educated and well-informed also believe the system doesn’t work.”

    Even wealthy, well educated people understand things aren’t working, which begs the question. Who does think the system is working? Well, the people attending Davos, of course. These are the folks who cheer on a world in which eight people own as much as the bottom 50%.

    As can be seen fro the above excerpts, one thing that’s abundantly clear to almost everyone is that the system is broken. This is exactly where populism comes in to perform its crucial function. This is not an endorsement of Trump, but rather an endorsement of mass popular movements generally, and a recognition that such movements are the only way true change is ever achieved. As Frederick Douglass noted in 1857:

    This struggle may be a moral one, or it may be a physical one, and it may be both moral and physical, but it must be a struggle. Power concedes nothing without a demand. It never did and it never will. Find out just what any people will quietly submit to and you have found out the exact measure of injustice and wrong which will be imposed upon them, and these will continue till they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress. In the light of these ideas, Negroes will be hunted at the North and held and flogged at the South so long as they submit to those devilish outrages and make no resistance, either moral or physical. Men may not get all they pay for in this world, but they must certainly pay for all they get. If we ever get free from the oppressions and wrongs heaped upon us, we must pay for their removal. We must do this by labor, by suffering, by sacrifice, and if needs be, by our lives and the lives of others.

    The above is an eternal truth when it comes to human struggle. The idea that the most wealthy and powerful individuals on earth are going to get together in a Swiss chalet and figure out how to help the world’s most vulnerable and suffering is on its face preposterous. Again, this is why popular movements are so important. They represent the only method we know of that historically yields tangible results. This is also why the elitists and their media minions hate populism and demonize it every chance they get. Which is really telling, particularly when you look at the various definitions of the word. First, here’s what comes up when you type the word into Google:

    Or how about the following from Merriam-Webster:

    Aside from the 19th century historical reference, what’s not to like about any of the above? The mere fact that billionaire-owned media is so hostile to populism tells you everything you need to know. Behind the idea of populism is the notion of self-government, and Davos-type elitists hate this. They believe in a technocracy in which they make all the important decisions. Populism is dangerous because populism is empowering. It implies that the people ultimately have the power.

    I think a useful exercise for readers during this Davos circus laden week is to note whenever the word “populism” is used within mainstream media articles. From my experience, it’s almost always portrayed in an overwhelmingly negative manner. Here’s just one example from the first of the two Reuters articles mentioned above.

    The global financial crisis of 2008/9 and the migrant crisis of 2015/16 exposed the impotence of politicians, deepening public disillusion and pushing people towards populists who offered simple explanations and solutions.

    The key phrase in the above is, “populists who offered simple explanations and solutions.” This betrays an incredible sense of arrogance and contempt for regular citizens. Note that it didn’t offer a critique of a specific populist leader and his or her polices, but rather presented a sweeping dismissal of all popular movements as “simplistic.” In other words, despite the fact that the people mingling at Davos are the exact same people who set the world on fire, they somehow remain the only ones capable enough to fix the world. How utterly ridiculous.

    The good news is that most people now plainly see the absurdity of such a worldview, and understand that the people at Davos represent a roadblock to progress, as opposed to any sort of solution. While I don’t endorse any particular populist movement at moment, I fully recognize the need for increased populism as a facet of American political life, particularly at this moment in time.

    Populism can be dangerous, and it’s certainly messy, but it’s a crucial pressure release valve for any functioning free society. If you don’t allow populist movements to do their thing in the short-term, you’ll get far worse outcomes in the long-term.

    In the timeless words of JFK:

    Those who make peaceful revolution impossible will make violent revolution inevitable. 

    Nobody wants that.

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Jan 16

Today’s News 16th January 2017

  • At Least 20 Killed (6 Children) After Turkish Airlines 747 Crashes Into Kyrgyzstan Residences

    Turkish Airlines Flight 6491, a cargo plane, has crashed into a residential area near the Kyrgyzstan capital of Bishkek, killing at least 20 people and injuring others, according to local authorities say.

    The Boeing 747 was flying from Hong Kong to Manas International Airport, which is located just northwest of the Kyrgyz capital Bishkek.

    As BNONews.com reports, photos and videos from the scene showed a large fire burning shortly after the crash, and subsequent images after the fire was extinguished showed that multiple buildings were completely destroyed.

    At least 15 buildings were affected.

    Kyrgyzstan's Ministry of Emergency Situations said more than 20 people had been killed in the crash, though it provided no further details. The health ministry had earlier put the death toll at 16, which included 15 people on the ground, of whom 6 are children.

    It was not immediately clear how many people were on board the aircraft when it went down, though a Boeing 747 cargo plane typically carries a crew of at least two people. Turkish Airlines did not immediately respond to a request for information.

    RT reports that among those killed are three crew members, RIA Novosti news agency reported. One of the crew members survived the crash, the local Emergencies Ministry said, as cited by TASS.

    Members of the Kyrgyzstan government, including Vice prime minister Mukhammetkaliy Abulgaziev, are at the scene, according to reports.

    All flights to and from Kyrgyzstan’s Manas airport have been suspended until further notice, RIA Novosti reported, citing local sources.

  • US Military Deploys Nuke-Spotting Radar To Monitor North Korea

    The Sea-based X-Band Radar has deployed out of Pearl Harbor after North Korean dictator Kim Jong Un recently said his country was in the "final stages" of test-launching an intercontinental ballistic missile. Media sources reported that the SBX was being sent about 2,000 miles northwest of Hawaii to watch for a possible North Korean launch in coming months. The Pentagon downplayed the floating radar's Monday departure.

    As The Honolulu Star Advertiser reports, dispatching the "SBX" out to sea sends "a very clear strategic message of deterrence to the ICBM threat of the North Korean leader that has intensified since first announced on Jan. 1," said Riki Ellison, chairman of the Missile Defense Advocacy Alliance, a Virginia-based nonprofit that advocates a strong U.S. missile defense.

    Media sources reported that the SBX was being sent about 2,000 miles northwest of Hawaii to watch for a possible North Korean launch in coming months. The Pentagon downplayed the floating radar's Monday departure.

     

    "The SBX's current deployment is not based on any credible threat; however, we cannot discuss specifics for this particular mission while it is underway," Navy Cmdr. Gary Ross, a Defense Department spokesman, said in an email.

     

    Kim said in a Jan. 1 speech that North Korea was prepping for an ICBM test launch.

     

    "The SBX deployed in the Pacific Ocean enhances and boosts the probability of kill for each of the current 37 and soon to be 44 (ground-based interceptors) in both Alaska and California, if fired at a North Korean ICBM," Ellison said Thursday in an MDAA release.

     

    If the North Korean test ICBM does not target U.S. or allied territory, the SBX would be in a position "to collect invaluable precision data on the warhead and debris of a North Korean ICBM test-flying in space," the release said.

     

    Defense Secretary Ash Carter also suggested this week that the United States might just monitor the launch if it didn't appear to be a threat.

    The more than 280-foot-tall SBX is topped by a golf ball-like dome containing a phased array radar and is a hard-to-miss sight at its mooring off Ford Island. The powerful radar, which is only operated at sea, acquires, tracks and discriminates the flight characteristics of ballistic missiles.

    TheUnion of Concerned Scientists reported $2.2 billion SBX is designed for long-range precision tracking and discrimination of warheads from other objects, but it "has a number of serious limitations, including a very limited electronic field of view."

     Based on shortcomings of the SBX, the U.S. Missile Defense Agency announced plans to develop by 2020 a long-range discrimination radar in Alaska, the scientific group said.

  • In Scathing Attack, CIA Director Brennan Warns Trump To "Watch What He Says"

    The departing CIA director John Brennan has launched a scathing attack on Donald Trump, warning the President-elect does not fully understand the threat posed to the US by Russia.

    "I think Mr. Trump has to understand that absolving Russia of various actions it has taken in the past number of years is a road that he needs to be very, very careful about moving down."

    As Reuters reports, Brennan's comments, during an interview on "Fox News Sunday," exposed the simmering tensions between the president-elect and the intelligence community he has criticized and is on the verge of commanding.

    "Spontaneity is not something that protects national security interests and so therefore when he speaks or when he reacts, just make sure he understands that the implications and impact on the United States could be profound," Brennan said.

     

     

    "It's more than just about Mr. Trump. It's about the United States of America."

     

    "What I do find outrageous is equating intelligence community with Nazi Germany," Brennan said. "I do take great umbrage at that."

    Brennan also questioned the message it sends to the world if the president-elect broadcasts he does not have confidence in the United States' own intelligence agencies.

    "The world is watching now what Trump says and listening very carefully. If he doesn’t have confidence in the intelligence community, what signal does that send to our partners and allies as well as our adversaries?"

     

    "There is no basis for Mr Trump to point fingers at the intelligence community for 'leaking' information that was already available publicly,"

    Speaking earlier on Sunday, President Barack Obama's chief of staff Denis McDonough said the intelligence community was "staffed by an unbelievably cadre of professionals" and he dismissed the notion that they would seek to undermine Mr Trump's victory as the President-elect has suggested. As Jacob G. Hornberger warns:

    In a truly remarkable bit of honesty and candor regarding the U.S. national-security establishment, new Senate minority leader Charles Schumer has accused President-elect Trump of “being really dumb.”… for taking on the CIA and questioning its conclusions regarding Russia.

     

    “Let me tell you, you take on the intelligence community, they have six ways from Sunday at getting back at you…. He’s being really dumb to do this.”

     

    […]

     

    No president since John F. Kennedy has dared to take on the CIA or the rest of the national security establishment […] They knew that if they opposed the national-security establishment at a fundamental level, they would be subjected to retaliatory measures.

     

    Kennedy… After the Bay of Pigs, he vowed to tear the CIA into a thousand pieces and scatter them to the winds. He also fired CIA Director Allen Dulles, who, in a rather unusual twist of fate, would later be appointed to the Warren Commission to investigate Kennedy’s murder.

     

    Kennedy’s antipathy toward the CIA gradually extended to what President Eisenhower had termed the military-industrial complex, especially when it proposed Operation Northwoods, which called for fraudulent terrorist attacks to serve as a pretext for invading Cuba, and when it suggested that Kennedy initiate a surprise nuclear attack on the Soviet Union.

     

    […]

     

    Worst of all, from the standpoint of the national-security establishment, [Kennedy] initiated secret personal negotiations with Soviet Premier Nikita Khrushchev and Cuban leader Fidel Castro, both of whom, by this time, were on the same page as Kennedy.

     

    […]

     

    Kennedy was fully aware of the danger he faced by taking on such a formidable enemy.

    And, as we previously noted, to the extent that President Kennedy consciously stood up to the system, he paid the price for his attempt at independent wielding of power from the Oval Office.

    It is a shuddering thought. A sharp lesson in history that must not be misinterpreted.

    The implications for Trump are quite clear. If his refusal to take intelligence briefings, or follow CIA advice is serious, then serious consequences will follow. If Trump is serious about peace with Putin when they insist on war, there will be a problem.

    The CIA director will likely be replaced by Mr Trump's pick Mike Pompeo next week.

  • Trump's Delusion: Halting Eurasian Integration And Saving 'US World Order'

    Submitted by Federico Pieraccini via Strategic-Culture.org,

    The preceding three parts of this series analyzed the mechanisms that drive great powers.

     

    The most in-depth understanding of the issues concerned the determination of the objectives and logic that accompany the expansion of an empire.

     

    Geopolitical theories, the concrete application of foreign-policy doctrines, and concrete actions that the United States employed to aspire to global dominance were examined.

     

    Finally, the last bit of analysis focused particularly on how Iran, China and Russia have adopted over the years a variety of cultural, economic and military moves to repel the continual assault on their sovereignty by the West with specific attention was given to the American drive for global hegemony and how this has actually accelerated the end of the 'unipolar moment', impelling the emergence of a multipolar world order.

     

    In this fourth and final analysis I will focus on a possible strategic shift in the approach to foreign policy from Washington. The most likely hypothesis suggests that Trump intends to attempt to prevent the ongoing integration between Russia, China and Iran.

    The failed foreign-policy strategy of the neoconservatives and neoliberals has served to dramatically reduce Washington's role and influence in the world. Important alliances are being forged without seeking the assent of the United States, and the world model envisioned in the early 1990s – from Bush to Kagan and all the signatories of the PNAC founding statement of principles – is increasingly coming undone. Donald Trump’s victory represents, in all likelihood, the last decisive blow to a series of foreign-policy strategies that in the end undermined the much-prized leadership of the United States. The ceasefire in Syria, reached thanks to an agreement between Turkey and Russia, notably excluded the United States.

    The military, media, financial and cultural assault successfully prosecuted over decades by Washington finally seems to have met its Waterloo at the hands of the axis represented by Iran, Russia and China. The recent media successes (RT, Press TV and many alternative media), political resistance (Assad is still president of Syria), diplomatic struggles (negotiations in Syria without Washington as an intermediary) and military planning (Liberation of Aleppo from terrorists) are a result of the efforts of Iran, Russia and China. Their success in all these fields of operations are having direct consequences and implications for the internal affairs of countries like the United Kingdom and the United States.

    The relentless efforts by the majority of Western political representatives for a successful model of globalization has created a parasitic system of turbo capitalism that entails a complete loss of sovereignty by America’s allies. Brexit and Trump have served as an expression of ordinary people’s rejection of these economic and political regimes under which they live.

    In Syria, Washington and its puppet allies have almost exited the scene without achieving their strategic goal of removing Assad from power. Within the American political system, the establishment, spanning from Clinton to Obama, was swept away for their economic and political failures. The mainstream media, spewing an endless stream of propaganda aimed at sustaining the political elite, completely lost their battle to appear credible, reaching unprecedented peaks of partisanship and immorality.

    Donald Trump has emerged with a new approach to foreign policy affairs, shaped by various political thinkers of the realist mould, such as Kenneth Waltz and John Mearsheimer. First on the to-do list is doing away with all the recent neoconservative and neoliberal policies of foreign intervention (Responsibility to Protect – R2P) and soft-power campaigns in favor of human rights. And there will be no more UN resolutions deviously employed as cover to bomb nations back into the stone age (Libya). Trump does not believe in the central role of the UN in international affairs, reaffirming this repeatedly during his campaign.

    The Trump administration intends to end the policy of regime change, interference in the internal affairs of foreign governments, Arab Springs, and color revolutions. Such efforts, they argue, are ultimately ineffective anyway and are too costly in terms of political credibility. In Ukraine the Americans have allied themselves with supporters of the Nazi Stepan Bandera, and in the Middle East they finance or indirectly support al Qaeda and al Nusra Front. These tactics, infamously branded as 'leading from behind', never achieved their desired results. The Middle East is in chaos, with a Moscow-Tehran axis emerging and going from strength to strength. In Ukraine, the government in Kiev not only seems incapable of complying with the Minsk agreements but also of prosecuting a new military campaign with no guarantees from their European and American partners.

    There is a wild card that Trump hopes to play in the first months of his presidency. The strategy will focus on the inherited chaotic situation in the Middle East and Ukraine. Obama will be blamed for the previous chaos, it will be argued that sanctions against the Russian Federation should be removed, and Moscow will be given a free hand in the Middle East. In one fell swoop, the future president may decide not to decide directly on the Middle East or on Ukraine, avoiding any further involvement and instead finally making a decision in the national interest of his country.

    A sustainable strategy may finally be attained by remaining passive towards the developments in the Middle East, especially on the Syrian front, leaving it firmly in Russian hands, while emphasizing at the same time the effort against Daesh in cooperation with Moscow. Another wise choice would see Kiev falling by the wayside, trashing Ukrainian ambitions to regain the Donbass and recover Crimea. Finally, removing sanctions would allow the next president to strengthen the alliance with European partners (a diplomatic necessity that Trump must make as the new president). Over two years the EU has suffered from economic suicide in the name of a failed policy strategy imposed by Washington. The Trump presidency will seek to normalize relations between Moscow and Washington as well as with European allies more willing to actively collaborate with the Trump administration.

    The Middle East will accordingly see a decline in violence, increasing the chances of seeing an end to the conflict in Syria. This plan for the initial phase of the Trump presidency has been widely announced during the months leading up to his election, both by himself or by members of his staff.

    The implicit message is to seek dialogue and cooperation with all nations. Probably what lies behind these overtures is actually an explicit willingness to try to break the cooperation between Russia, Iran and China. The motivations for this action stem from the implications for the United States if a full military, cultural and economic alliance between Beijing, Moscow and Tehran is formed. It would almost ultimately consign the United States to irrelevance on the grand chessboard of international relations.

    More realistically, Trump aims to shift the focus of the United States from the Atlantic to the Pacific, where the largest US commercial interests will reside in the future; a shift of focus from the Middle East to the South and East China Seas. The geopolitical reasons behind this decision, and the guiding theories behind it, were addressed particularly in the first article of this series. In summary, Trump intends to accelerate Obama’s Asian pivot, bringing about profound changes to US foreign policy. Smoking the peace pipe with Russia will free up resources (to "build up our military" in naval terms) to be focused in the Pacific. He intends to emphasize the importance of bilateral relations between allies ("free riders" Japan and South Korea) to focus on containing China.

    The wildcard that Trump hopes to play in breaking the alliance is called Russia. Thanks to previous peace talks developed with Moscow, Trump hopes for a reprise of Kissinger's strategy with China in 1979, with the addition of a promise of non-interference in the Middle East against Iran and Syria by the United States. In an exchange unlikely to happen, the American administration is hoping to convince the Kremlin that no action will be taken in the Middle East against Moscow and its allies, including Iran, in exchange for help in containing the Republic of China.

    With this in mind, Trump’s choice of a very questionable personality to liaise between Washington and Tel Aviv, combined with the strong rhetoric of Trump against the Islamic Republic of Iran, and the equally harsh responses from Tehran to the threats of the future president, seem to satisfy the roles and rhetoric of all parties involved. No actions, only rhetoric. For Tehran and Tel Aviv it is easier to argue that to sign an agreement. The Iranian nuclear deal will, for this reason, continue to be a major point of tension, but also the guarantor of unlikely military action.

    The real problem for the future administration in this strategy is offering a consistent plan of non-interference in the Middle East. Putin is well aware, in any case, that Washington is not able to intervene and change the fate of the balance of power that is forming in the Middle East. Trump’s indirect offer not to take action in the Middle East is at best a bluff that will not last long. Trump ignores (or, being a good negotiator, pretends not to want to see) that very few cards in his deck can be attractive to Moscow. The alliance between Moscow, Beijing and Tehran is firm and certified by strategic exchanges in many fields, a trend promising tremendous growth. The war in Syria has shown the results of effective coordination between the three nations. The addition of the Islamic Republic of Iran to the Shanghai Cooperation Organization (SCO) will further strengthen security ties, without forgetting that the north-south corridor between Russia and Iran also ensures stability in an area of ??the globe where the danger of subversive terrorism is very high..

    During the period of sanctions, Russia and China signed the most important and immense trade agreement in history, sealing Moscow’s turn toward the east. Such a move involves a level of strategic planning that goes well beyond the four years of a presidential term. If Trump hopes to achieve cooperation of some kind with Putin to further his grand strategy, he is deluding himself. However, he must out of necessity cooperate against terrorism in the Middle East with Russia and moderate Washington’s allies in the region who support terrorist. He will be forced to remove sanctions and reset the international relationship between Washington and Moscow, freeing the EU from a counterproductive situation in opposing the Russian Federation. He will probably then decide to ignore permanently the matter of Ukraine and Crimea, burying one of the tactics and strategies that was the cornerstone of the neoconservatives, namely an attempt to prepare the Ukrainian army to face the Russian Federation militarily, then drawing in NATO into an all-out war.

    Trump knows he is in an inferior negotiating position vis-a-vis Moscow and Beijing. He is well aware that effecting a rupture of relations between China, Russia and Iran is almost impossible. The only advantage, from his point of view, is having more room to negotiate with Moscow, given the abysmal levels of relations between Putin and Obama.

    Naturally, if Trump should really embark on such a mission of dividing the Eurasian continent, he is likely to expect very specific guarantees about the future attitude of Moscow towards Beijing. Putin will have very few problems in playing him to his advantage. Moscow has everything to gain from this situation. Trump hopes to have on his side the Russian Federation, then proceed to convince countries like Japan, the Philippines and South Korea that containing China is the only viable strategy for limiting China’s influence and future domination over Asia. These actions will provoke the opposite effects to those intended, thereby promoting further integration of Eurasia (AIIB and Silk Road 2.0), as shown by Obama’s Asian pivot. Any attempt to impose a new Asian pivot will end up in flames, as has been the case with the commercial Trans-Pacific Partnership Agreement.

    In the meantime, with the removal of sanctions, many EU countries will finally be able to resume their energy and technology integration with the Eurasian continent, especially with Russia. Japan will in all likelihood be able to sign a peace treaty with Russia without violating its obligations to Washington.

    In general, the removal of sanctions on Russia will accelerate many projects placed on hold by tensions between Washington and Moscow. Trump’s attitude, if he decides to have an aggressive posture towards Beijing, will force the Chinese elite to see what lies in store for it. Washington does not intend to have joint relations with Beijing. Trump has repeatedly reiterated the thoughts of Mearsheimer, a prominent contemporary geopolitical theorist, who states that in less than a decade China’s growth will likely pose a threat to the United States as a superpower. Mearsheimer argues that within a few years, thanks to the growth of nominal GDP and demographic increase, the Republic of China will be the first military power in the world to dominate Asia. Trump intends to concentrate all his efforts, in terms of foreign policy, on this factor. To succeed, he understands that he needs to have on his side several regional players (Japan, South Korea, Vietnam, India, the Philippines), especially the Russian Federation, as well as oversee a sea change that will transfer the attention in Washington from the Atlantic to the Pacific .

    This period of time will represent for Moscow, Beijing and Tehran a time to make definitive choices, a season in which the national policy-makers of these nations will have to understand what road to embark on. For Tehran, the cards are dealt face up, with a predetermined role as regional power. For Moscow and Beijing the issue is far more complicated. Much will depend on how Beijing intends to oppose openly any hostile action of Trump. Moscow has for many years openly questioned the world order led by Washington. Beijing understandably seems reluctant to engage in direct confrontation. In all likelihood, Trump and his realist foreign-policy attitude will lead the Chinese elite to understand that Washington considers itself to be the only one entitled to grant world order. The Chinese elites need to understand that the only sustainable path for the future is the construction, with all actors, of a multipolar world that includes Washington, New Delhi, Moscow, Tehran, London and Brussels. Realistically, it is hard to think that the new administration would alter the strategic partnership formed between China, Iran and Russia. After all, Trump would retrace the same steps of his predecessors, simply by changing the angle of approach and trying to further shuffle the cards of international relations. The decision to improve the world through cooperation and mutual respect does not exactly match the aspirations of the American deep state that seeks war, chaos and conflicts.

    The big difference we will see with a candidate like Trump is easy. Once all diplomatic efforts have failed against Beijing, instead of doubling down with military or terrorist efforts, the strategy will be abandoned in silence. The strong expressions against Beijing, the feared increase in military spending for the Pacific (to satisfy the industrial-military apparatus), and the rhetoric against Iran (to appease the Israel lobby), will be used to moderate the deep state’s intentions, while Trump will try to focus on economics and security (counter-terrorism) and much less on foreign policy.

    Series Conclusion.

    This series has sought to invite readers to reflect on the epochal events that are occurring. The global hegemonic project that was supposed to be realized with a Clinton presidency has been stopped. The inevitable military confrontation with Russia, Iran and China has been averted thanks to the preventive actions of these countries together with the defeat of the Democratic candidate. A huge blow has been delivered to the establishment, with its impulse toward globalism and US imperialism.

    The emergence of a multipolar world order has altered the way nations interact with each other in the field of international relations. Washington is no longer the only referent, and it is this that represents a pivotal transition from a unipolar world dominated by Washington. The mechanisms that regulate the great powers have varied in form and content, leading to an almost unprecedented international situation. The future multipolar world order, historically unstable, will in fact hold the promise of stability thanks to the actions of opposing nations to the American superpower. United they will stabilize the world.

    The key to a sustainable future world order is the synergy between the newly formed Beijing, Moscow and Tehran axis as an economic, military and cultural counterweight to the US. The union and the alliance of these three nations has created a new super-pole, able to balance effectively the often destructive actions of Washington. Rather than a multipolar world order, we are actually faced with a situation of two superpowers, one of which is based on the integration between dozens of nations on more than two continents. It is a new era that will accompany us over the coming decades. The unipolar world is over – forever!

  • Davos Elite Eat $40 Hot Dogs While "Struggling For Answers", Cowering in "Silent Fear"

    For those unfamiliar with what goes on at the annual January boondoggle at the World Economic Forum in Davos, here is the simple breakdown.

    Officially, heads of state, captains of industry, prominent academics, philanthropists and a retinue of journalists, celebrities and hangers-on will descend Tuesday on the picturesque alpine village of Davos, Switzerland, for the World Economic Forum;

    Unofficially, it’s the world’s biggest echo chamber, where wealthy, influential and/or powerful people, yet vastly out of touch with the rest of the world, sit down with other wealthy, influential and/or powerful people who are just as out of touch, to validate to each other that nobody really knows anything (also known as the “ratings agency effect”), but because the press is there and fails to point out that these emperors of industry, commerce, entertainment and politics are naked in hopes of maintaining their annual invitation and direct access, everyone goes home happy. And just as clueless.

    Hence Trump.

    Case in point, as Reuters fondly recalls, last year, the consensus here was that Trump had no chance of being elected (actually, last January the world’s elites were far more worried about plunging markets as we pointed out in “How Billionaires Are Investing In 2016: “The Only Winning Move Is Not To Play The Game“). 

    Trump was elected. His victory, less than half a year after Britain voted to leave the European Union, “was a slap at the principles that elites in Davos have long held dear, from globalization and free trade to multilateralism.”

    We’ll get to Trump in a second, but first some more on the background of this festival which revels in everything the populist backlash of 2016 found excerable, courtesy of the NYT.

    Who Attends the Conference?

    More than 2,500 people will attend this year’s conference from 90 different countries, paying up to $50,000 per person to attend (that of course excludes the ultra-celebrities who get in for free). In fact, so many people are attending, some of the local staff may sleep in shipping containers. Most of the participants are corporate executives, but more than two dozen heads of state and government are expected to attend.  Theresa May, the prime minister of Britain, and Xi Jinping, president of China, are attending the conference for the first time this year. Xi is the first Chinese president to attend the event, and will also be the star attraction. His presence is being seen as a sign of Beijing’s growing weight in the world at a time when Trump is promising a more insular, “America first” approach and Europe is pre-occupied with its own troubles, from Brexit to terrorism.

    On the other hand, Trump has decided not to officially send a member of his team as it would “betray his populist-fueled movement.” Likewise German chancellor Merkel will be absent, worried about her own image ahead of the 2017 German elections.

    Aside from politicians, Shakira and the actor Forest Whitaker are to receive awards this year. Expected attendees include Sheryl Sandberg, COO at Facebook; Matt Damon; Formula One driver Nico Rosberg; and Alibaba’s Jack Ma. While only 17% of last year’s participants were women, according to the forum, this year the number is not expected to change.

    How Are These People Kept Safe?

    All of those dignitaries need security. During the conference, Davos transforms into a fortress. Roadblocks restrict traffic on the city’s main streets and checkpoints spring up outside each venue. At the Congress Center, where the main panels take place, and at each hotel that hosts parties and talks, attendees pass metal detectors, armed guards and beneath the watchful eyes of sharpshooters. In the past, the conference was targeted by protesters associated with the anticapitalist Occupy movement. In 2013, members of the Ukrainian activist group Femen were arrested after a topless demonstration. The Swiss government estimated it will spend 8 million Swiss francs, about $8 million, on security, but said that number could increase if there were a credible threat to the conference. “Switzerland is still not regarded as a priority target for jihadist terrorists,” the Federal Council said on its website. “On the other hand, even on Swiss soil, the interests of states participating in the military coalition against the so-called Islamic State face an increased threat.”

    Is It as Elitist as It Sounds?

    Yes. The meeting runs on a tiered system of colored badges denoting just how important one is, or is not. White badges are for attendees able to attend any official event and make full use of the forum’s facilities. Orange badges are reserved for the 500 journalists who cover the forum, but are not allowed at some parties. Other badges, like purple ones, denote technical or support staff and limit their holders to a few areas. Local hotels like the Belvedere and the InterContinental often sell their own badges to the bankers and consultants who descend upon Davos to strike deals and chat up clients. These souls camp out at the hotels, renting rooms for business meetings by day and soiree hopping at night.

    What About the Parties?

    Beyond the boring, ineffective, and circle-jerking lectures and panel discussions, a much more important agenda unfolds after sunset. One notable event, according to the NYT, is a simulation of a refugee’s experience, where Davos attendees crawl on their hands and knees and pretend to flee from advancing armies. It is one of the most popular events every year. The theme of this year’s conference is “Responsive and Responsible Leadership.” But attendees like to play as hard as they work.

    There are several official cocktail receptions, but the action really lies in a galaxy of events hosted by corporations. Some are small, intimate dinners that feature the likes of Leonardo DiCaprio and Bono. Others are dazzling affairs worthy of a modern day Gatsby: JPMorgan Chase, for example, has previously taken over the Kirchner Museum Davos for drinks with its chief executive, Jamie Dimon, and Tony Blair, the former British prime minister. Google’s annual party at the InterContinental Hotel has become the hottest ticket in town. The investor Anthony Scaramucci, now an adviser to Donald J. Trump, for years has hosted a reception at the famed Hotel Europe featuring a sometimes eye-popping list of high-end Champagne and Bordeaux red wine. A more recent up-and-comer is hosted by Salesforce.com, a business software maker, whose chief, Marc Benioff, is one of the forum’s most ardent boosters. Last year’s Salesforce party included Mr. Benioff flying in scores of fresh flower leis and a band from Hawaii, as Eric Schmidt of Google and other tech notables danced in a corner. Several years ago, Sean Parker of Napster and Facebook fame, hosted an over-the-top gathering that featured stuffed animal heads shooting laser beams out of their eyes. And the Russian billionaire Oleg Deripaska has thrown opulent gatherings at a nearby villa where the Champagne flowed freely For a nightcap, the Davos crowd traditionally retires to the Tonic Bar at Hotel Europe, sipping cocktails while the forum fixture Barry Colson leads the crowd in Billy Joel singalongs.

    * * *

    With the background of the event covered, we once again focus on the key topic at hand, namely quite ironic “social and wealth inequality” – which incidentally has been a core topic for the past several years, demonstrating just how clueless Davos really is, and of course Trump.

    Just so readers can get a sense of just how delightfully surreal this whole event is, one of the most prominent panels is called “Squeezed and Angry: How to Fix the Middle-Class Crisis“

    Its description: “Poor employment prospects and low-income growth in many developed economies have laid the groundwork for the rise of populism. Did policy-makers ignore these trends or do too little to redress them? What can be done to restore growth in the middle class and confidence in the future?“

    Who are these experts on the woes of the middle class? Read em and weep: Ray Dalio – a billiionaire who encourages spying on his employees; Christine Lagarde – a convicted criminal and tax evader, head of an organization that takes from the poor and gives to the world’s creditors; and Larry Summers, a firm believer, and doer, in wealth redistribution from the middle classes to the wealthy.

    * * *

    While in previous years the Davos party was not to be spoiled with any actual concerns about the real world violating the inner sanctum of the world’s uber-poseurs, this year something has changed.

    Beneath the veneer of optimism over the economic outlook lurks acute anxiety about an increasingly toxic political climate and a deep sense of uncertainty surrounding the U.S. presidency of Donald Trump, who will be quite symoblically, even if purely accidentally, inaugurated on the final day of the forum.

    And with Trump’s election come worries that the ivory towers inhabited by the 2,500 or so Davosites, are far less sturdy than previously believed.  “Regardless of how you view Trump and his positions, his election has led to a deep, deep sense of uncertainty and that will cast a long shadow over Davos,” said Jean-Marie Guehenno, CEO of International Crisis Group, a conflict resolution think-tank.

    Moises Naim of the Carnegie Endowment for International Peace was even more blunt, suggesting that the people in Davos are even more clueless than usual, which is saying quite a lot.

    “There is a consensus that something huge is going on, global and in many respects unprecedented. But we don’t know what the causes are, nor how to deal with it.“

    Brilliant.

    * * *

    Meanwhile, in an attempt to figure out the causes and “how to deal with it”, the participants in the World Economic Forum, which runs from Jan. 17 to 20, will partake in such panels as the abovementioned “Squeezed and Angry: How to Fix the Middle Class Crisis”, “Politics of Fear or Rebellion of the Forgotten?”, “Tolerance at the Tipping Point?” and “The Post-EU Era”.

    The central question in Davos, a four-day affair of panel discussions, lunches and cocktail parties that delve into subjects as diverse as terrorism, artificial intelligence and wellness, is whether leaders can agree on the root causes of public anger and begin to articulate a response… aside from the forum participants themselves of course.

    A WEF report on global risks released before Davos highlighted “diminishing public trust in institutions” and noted that rebuilding faith in the political process and leaders would be a “difficult task”. Guy Standing, the author of several books on the new “precariat”, a class of people who lack job security and reliable earnings, believes more people are coming around to the idea that free-market capitalism needs to be overhauled, including those that have benefited most from it.

    “The mainstream corporate types don’t want Trump and far-right authoritarians,” said Standing, who has been invited to Davos for the first time. “They want a sustainable global economy in which they can do business. More and more of them are sensible enough to realize that they have overreached.”

    But Ian Bremmer, president of U.S.-based political risk consultancy Eurasia Group, is not so sure, and he recounted ro Reuters a recent trip to Goldman Sachs headquarters in New York where he saw bankers “rejoicing in the elevators” at the surge in stock markets and the prospect of tax cuts and deregulation under Trump. Both Goldman CEO Lloyd Blankfein and his JP Morgan counterpart Jamie Dimon will be in Davos.

    It remains to be seen if there will be as much “elevator rejoicing” when the market finally crashes under Trump, an inevitable outcome which some speculate is precisely why Trump was allowed to become president: so that all the blame on the grand crash, once it, happens can be placed on him.

    Others are less worried about the impact of Trump, and more concerned that the pace of technological change and the integrated, complex nature of the global economy have made it more difficult for leaders to shape and control events, let alone reconfigure the global system. The global financial crisis of 2008/9 and the migrant crisis of 2015/16 exposed the impotence of politicians, deepening public disillusion and pushing people towards populists who offered simple explanations and solutions.

    The problem, says Ian Goldin, an expert on globalization and development at the University of Oxford, is that on many of the most important issues, from climate change to financial regulation, only multilateral cooperation can deliver results. And this is precisely what the populists reject.  “The state of global politics is worse than it’s been in a long time,” said Goldin. “At a time when we need more coordination to tackle issues like climate change and other systemic risks, we are getting more and more insular.”

    * * *

    Whatever the reason, sense of dread that things are moving, changing beyond the participants’ control will be all too tangible.

    It is also why, as Bloomberg reported today, the World Economic Forum will convene a special meeting in Washington this year to discuss issues raised during the president-elect’s campaign “and the populist wave that swept him to victory” WEF founder Klaus Schwab told Bloomberg Television on Sunday. The gathering will explore U.S. investment and job-creation opportunities for companies that participate in the forum, he said.

    “It’s very natural that with the new administration we plan a major event in the U.S. to see what are the implications of the new president and how the business community could engage,” Schwab said in advance of the forum’s 47th annual meeting in the Swiss ski resort of Davos. “We have to be responsive to the call.”

    “People have become very emotionalized, this silent fear of what the new world will bring,” Schwab said in the town’s hulking conference center. “We have populists here and we want to listen. We have to respond to these individuals’ fears and to offer solutions. It’s not just enough to listen; we have to provide answers and that’s what were here for in Davos.”

    No, that’s what you were there for in Davos in 2013, 2014, 2015 and 2016, and you did nothing. Now it’s too late as the pendulum has already swung.

    That, however, is not obvious to the forum organizers who will enjoy another blockbuster year. Business is booming for the WEF and Schwab, 78, said he has no plans to abandon or alter its annual retreat. Revenue is up 45%  in the past five years and staff have increased by about a third – with employees earning an average of 135,000 Swiss francs, ($133,875) which rises to 213,000 Swiss francs with the addition of costs such as pensions and healthcare.

    “Our salary structure is completely in line with others such as the Bretton Woods organization, the World Bank or the International Monetary Fund,” Schwab said. “We also have to be competitive with organizations like Goldman Sachs and McKinsey. We are competing for the same talent.”

    How does Schwab reconcile the glaring hypocricy of the world’s wealthiest debating social injustice and wealth inequality? Simple:

    Despite the glitzy parties that have become the hallmark of the annual gathering, Schwab said his aim is not to celebrate the “outrageous excesses of life,” but rather to create a “global village,” where participants can mull weighty issues facing the world without the distractions of a large city. And he insists that as the power and beliefs of business and political leaders face unprecedented challenges, the meeting is needed more than ever.

    Schwab says the WEF’s annual meeting, where companies host lavish parties awash in champagne and rare vintage wines, attendees pay $50,000 and thousands of soldiers and police stand guard, remains an appropriate forum to discuss political issues like the rise of populism and seek solutions to society’s biggest problems. Unfortunately, that’s all it is, as no concrete, revolutionary decisions can ever take place within the confines of this giant echo chamber.

    Schwab concludes by saying that “the right solution will require a lot of effort and many steps in the right direction. I am optimistic that in a new multi-polar world we still have the notion of a joined and shared destiny” but adds that his “biggest fear is that we will believe there are very simple answers to very difficult questions.”

    Actually, herr Klaus Schwab, there are other far more tangible things you and your peers should be afraid of, but somehow we doubt that those will become apparent while eating $40 hot dogs.

     

     

  • Why The Stock Market Has Soared (And We'll All Soon Know What It's Like To Be A Madoff Client)

    Submitted by Chris Hamilton via Econimica blog,

    What is driving the US stock markets to such amazing gains?  While some corporations have seen increases in sales and most have innovated to reduce costs, lessen waste, and maximize efficiency, I'll focus on some of the other means that have driven profits higher helping to push US equities into record territory.

    1- Declining % of profits going to Uncle Sam.

     

    2- Minimal wage growth and holding the line on new hires.

     

    3- Debt fueled stock buybacks and dividends at the expense of investment in mid and long term activities (R&D, cap-ex, exploration, etc.).

    To represent the US market as broadly as possible, we'll use the Wilshire 5000 index, representing all 3600+ publicly traded US corporations (chart below vs. the 10yr Treasury rate).

    Corporate Profits

    First, profits —Way Up.  The Wilshire 5000 vs. corporate profits (chart below).

    But how have corporate after tax profits risen so fast?

    Corporate Taxes

    Pay less in taxes on rising profits…since 2000, profits have risen in excess of 300% while tax revenues half that.

    Of those rising profits, corporations are keeping far more and giving far less to uncle Sam.  Under Eisenhower, 50% of profits went to the Fed's to a low of 17% by the end of GW Bush's term.  Perhaps a Republican Congress and Trump will get these tax revenues rescinded entirely???

    Wages & Corporate Employees

    The #1 cost to business is usually labor, so how about pay the rank and file employees less (chart below)?  Dashed black lines represent old America where workers shared in the growth with growing wages (growing the capacity of the consumer base)…and in the solid black lines, the new America where wage growth has slowed to the lowest levels in US history despite record corporate profits.

    But it's not just paying less, corporations also throttled back on hiring more employees…corporations consistently provided more US employment from 1970 until 2000…since 2000, not so much.  Can't blame corporations for trying to save their way to prosperity and playing the game as it's legislated…but an economy without a growing base of consumers is a bit of a problem.

    Corporate employment vs. Wilshire 5000…hmmm.

    ZIRP = Buybacks and More Cheap Debt

    When 2008 hit, private citizens and corporations simply couldn't / wouldn't take on any more debt.  So the Federal Reserve made money free to corporations (enabling massive debt fueled buybacks) and amazing growth in Federal debt (ultimately a liability of the US taxpayers).

    cat

    According to Reuters, half of the top 50 non-financial U.S. companies are now giving more money back to shareholders in buybacks and dividends than they make in profits – the first time that’s happened outside of recessionary periods.  This is coming at the expense of R&D and innovation.  These include Apple, Intel, IBM, Cisco, Home Depot, AT&T, Boeing, Pfizer, and so many more…detailed HERE.

    Barron's notes, the result of the buybacks is that net equity issuance has been negative for the last several years and bears a striking resemblance to the period leading up to the 2008 financial crisis. The sheer level of buybacks is staggering. A Deutsche Bank report notes that Standard & Poor’s 500 companies pay out two-thirds of their earnings through buybacks and dividends. FactSet further notes that those same companies spent $166.3 billion on share buybacks in the first quarter, a post-recession high and one only surpassed by $178.5 billion in the third quarter of 2007…detailed HERE.

    Federal Public Debt per Full Time Employee

    The chart below shows the growth in federal public debt owed per US Full Time Employee.  The average full time employee is now on the hook for $116 thousand (more than double the 2008 ratio).  Otherwise, how would consumers continue consuming more if their incomes weren't rising and there weren't more employed among them (corporately or working full time)?

    Finally, how full time jobs, federal debt (public), and the Federal Reserves FFR % have progressed to push financial asset prices into the stratosphere.  Since 2007, an increase of 181% in federal public debt and 85% reduction in the federal funds rate cost of borrowing has created a 2.1% increase in full time jobs.  This was truly the last hurrah.

    Conclusion

    The impact of the Fed's extended period of zero interest rate policy was the creation of illusory gains.  However, many analysts expect a market correction to an outright market collapse while the technicians and bulls out there expect the bullish activity has much farther to run and attribute this to positive economic activity.

    As for me, I believe we are in deep trouble and the market is now a matter of national security… the federal funds rates will surely be pushed into negative territory and asset prices rise unbelievably.  For those thinking this is a "free market", the further gains in the equity market will be shocking.  Detailed domestically HERE and globally HERE.  The absolute disconnect of asset prices from economic activity is and will continue to be unlike anything we have seen. 

    This is no more of a "free market" than shooting a cow in a pasture is "hunting".  "Invest" accordingly, but know full well the ill gotten gains will one-day, someday, sooner than later, be entirely gone and we'll all know what it felt like to be Bernie Madoff clients.

  • Trump Responds To CIA Chief Brennan, Asks "Was He The Leaker Of Fake News?"

    Just hours after John Brennan lashed out at the president-elect in an interview with Fox News, Donald Trump has responded by suggesting that the outgoing CIA Director may have been behind the publication last week of unverified and salacious intelligence connecting the president-elect to Russia….

    This is the most direct accusation yet in the escalating feud with Obama’s intelligence agencies. As we noted earlier, no president since John F. Kennedy has dared to take on the CIA or the rest of the national security establishment. They knew that if they opposed the national-security establishment at a
    fundamental level, they would be subjected to retaliatory measures. To the extent that President Kennedy consciously stood up to the
    system, he paid the price for his attempt at independent wielding of
    power from the Oval Office. It is a shuddering thought. A sharp lesson in history that must not be misinterpreted. The implications for Trump are quite clear. If his
    refusal to take intelligence briefings, or follow CIA advice is serious,
    then serious consequences will follow. If Trump is serious about peace
    with Putin when they insist on war, there will be a problem.

    The CIA director will likely be replaced by Mr Trump’s pick Mike Pompeo next week.

  • "Mainstream Mediasaurus"

    They once ruled the earth…

     

    Source: Ben Garrison

  • Why Is Obama Moving Troops Into Poland, Provoking Russia Right Before The Inauguration?

    Submitted by Michael Snyder via The Economic Collapse blog,

    January 20th cannot come soon enough.  Instead of stepping back and trying to ensure a smooth transition for Donald Trump, Barack Obama has decided to go hog wild and use every ounce of presidential power still available to him.  He has been establishing a bunch of new national monuments, he just stabbed Israel in the back at the United Nations, and on Thursday he even took time to give Joe Biden a Presidential Medal of Freedom.  But one of the things that has people the most concerned is his endless provoking of Russia.  Every few days it seems like Obama is doing something else to aggravate Russia, and if he wasn’t leaving office in about a week I am sure that the mainstream media would be full of speculation about a possible war.

    Lame duck presidents are not supposed to make risky moves like this once a new president has been elected.  On Thursday, we learned that U.S. troops have been permanently deployed to Poland for the very first time…

    American soldiers rolled into Poland on Thursday, fulfilling a dream some Poles have had since the fall of communism in 1989 to have U.S. troops on their soil as a deterrent against Russia.

    Some people waved and held up American flags as U.S. troops in tanks and other vehicles crossed into southwestern Poland from Germany and headed toward the town of Zagan, where they will be based. Poland’s prime minister and defense minister will welcome them in an official ceremony Saturday.

    Poland was once a key member of the Warsaw Pact alliance, and the Russians are quite alarmed that U.S. troops will now be stationed so close to the Russian heartland.  The following comes from ABC News…

    “These actions threaten our interests, our security,” President Vladimir Putin’s spokesman Dmitry Peskov said Thursday. “Especially as it concerns a third party building up its military presence near our borders. It’s not even a European state.”

    And it has also been announced that NATO troops will arrive in Lithuania in late January.  If you will remember, Lithuania was actually part of the Soviet Union during the Cold War.

    All of a sudden, Russia has become enemy number one.  Barack Obama and Hillary Clinton say that Russia is to blame for Clinton’s election loss, and so at the end of December Obama expelled 35 Russian diplomats from the country.

    That is the sort of thing that you do before a war starts.

    Over in Europe, they are so freaked out about potential Russian interference in their elections that they are “erecting defenses to counter possible Russian cyber attacks”…

    Nations in Europe, where Germany and France this year hold elections, are erecting defenses to counter possible Russian cyber attacks and disinformation to sway Western politics, but intelligence experts say this might be too little and too late.

     

    The issue of Russian “influence operations” has taken on new urgency after U.S. intelligence agencies released a non-classified assessment that President Vladimir Putin ordered a campaign to move the U.S. election in favor of Donald Trump.

     

    European nations and NATO are setting up centers to identify “fake news”, bolstering cyber defenses and tracking use of social media which target Russian-speaking communities, far-right groups, political parties, voters and decision-makers.

    Back in 2012, Barack Obama mocked Mitt Romney for saying that Russia was a serious threat to our national security.  He even joked that the 1980s were calling Romney because they wanted their foreign policy back.

    At that time, Barack Obama boldly declared that the Cold War had been over for 20 years.  But now here we are just four years later and Barack Obama has gotten us into a new Cold War.  The crisis in Ukraine, the civil war in Syria, the price of oil, cyber-espionage and a whole host of other issues have brought tensions between the United States and Russia to a boiling point.

    Many are hoping that relations with Russia will improve during the Trump administration, but the truth is that things could go either way.

    It is important to remember that Trump will be surrounded by military people that are virulently anti-Russia.  For example, retired Marine General James Mattis has been nominated to be Defense Secretary, and this week he told Congress that Russia is the “principal threat” to U.S. security…

    While much of the hearing has so far been without controveries, in the most striking moment so far, Mattis told the Senate Armed Services Committee that Russia stands as the “principal threat” to the United States’s security. He said this is because of its actions and efforts to “intimidate” other countries.

     

    Senator John McCain questioned Mattis to get his opinion on how much of a threat Russia represents. Mattis response was that the world order is “under biggest attacks since WW2, from Russia, terrorist groups, and China’s actions in the South China Sea”, agreeing with the neocon senator that Russia is trying to break up NATO.

     

    “I’m all for engagement” with Russia, “but we also have to recognize the reality of what Russia is up to,” Mattis told Senator Jack Reed (D-Rhode Island).

    There is a great deal of concern that Trump’s view of Russia could be significantly shaped by strong military men such as Mattis.  Both Democrats and Republicans want Trump to become much more anti-Russia, and let us hope that he does not give in to the pressure.

    Over in Russia, they view us very negatively as well.  A Gallup survey taken in mid-2016 found that current U.S. leadership (the Obama administration) only had a one percent approval rating in Russia.

    Yes, you read that correctly.

    You can’t get much lower than one percent.

    The Russians consider themselves to be the great force for good in the world, and they consider the United States to be the great force for evil.  They openly talk about the possibility of nuclear war on their news broadcasts, and on one recent broadcast people were actually encouraged to locate the closest nuclear bomb shelter to their homes.

    And in response to U.S. troops being deployed to Poland, the Russian government has deployed advanced anti-aircraft missile systems around Moscow…

    Russia has deployed anti-aircraft missile systems around Moscow to protect the capital from attack in the latest sign Vladimir Putin is preparing for war.

     

    The s-400 Triumph air defence system has been providing air cover for Russian forces in Syria since November, and is now being deployed on home soil.

     

    It is capable of hitting moving airborne targets including planes and incoming missiles and has a range of 400km.

    We should be very thankful that Barack Obama is leaving office, because right now we are on a path that leads to war with Russia.

    Every American should be hoping that Donald Trump will work to greatly improve relations with the Russians, but all it would take is one wrong move for things to start deteriorating once again.

    A new Cold War has begun, and the stakes are incredibly high…

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Jan 15

Today’s News 15th January 2017

  • The Clinton Foundation Is Shutting Down The Clinton Global Initiative

    In a “mass layoff” event reported late last week by the Department of Labor, the Clinton Foundation announced it would lay off some 22 employees at the Clinton Global Initiative, which attained notoriety during the John Podesta leaks, when the various details of the fallout between between CGI head Doug Band and Chelsea Clinton were revealed; it also emerged that long-time Bill Clinton friend Band was soliciting donations for Clinton through his PR firm, Teneo in an sordid example of “pay for play” which most of the mainstream media refused to cover, especially after Band emailed Podesta “If this story gets out, we are screwed.”

    Filed as mandated by the Department of Labor’s Worker Adjustment and Retraining Notification, or WARN notice, on January 12, the Clinton Foundation’s Veronika Shiroka advised the DOL that as part of a “Plant Layoff” it would layoff 22 workers on April 15, with reason for the dislocation stated as “Discontinuation of the Clinton Global Initiative.” The layoffs are part of the Clinton plan put in motion ahead of the presidential election, to offset a storm of criticism regarding pay-to-play allegations during Clinton’s tenure as secretary of state.

    As the Daily Caller notes, the layoffs were reportedly announced internally in September, ahead of Clinton’s stunning loss to President-elect Donald Trump. Many other employees had already begun looking for or accepting other jobs at that time, as it had become clear the future of the initiative was in doubt. It’s unclear how many of the once 200 strong staff might remain at the Clinton Foundation in some other capacity.

    As a reminder, while the FBI has cleared Hillary Clinton of wrongdoing regarding her use of a private email server, a parallel probe into the Clinton Foundation regarding allegations of corruption is still ongoing.

    The decision to sunset the Clinton Global Initiative reportedly set off a dispute within Clinton Foundation circles regarding the best way to handle the fallout from the allegations. Some complained the layoff process was “insensitively” handled, Politico reported, while others took issue with the optics of allowing anyone with the Clinton Global Initiative to stay on.

    And while CGI is now officially being “discontinued”, the same fate likely awaits the Clinton Foundation itself following news in the aftermath of Hillary Clinton’s loss to Trump that Australia has cut its donations to the foundation to $0, while the far more generous Norway likewise slashed its donations by 87% as the political cout of the “charitable” organization dried up and as the opportunity for any future “quid pro quo” is now effectively gone.

  • We Are Getting Worried About Paul Krugman

    When a delicate snowflake is suddenly faced with a perceived reality so devastating as to be an existential crisis, the mind's reaction to dealing with this cognitive dissonance can be disabling for some. Certainly for The New York Times' flip-flopping, hate-mongering, fact-twisting, Keynesian poster-boy Paul Krugman it appears coping with "no" is not going well and his tirade last night in Twitter has us gravely concerned for his mental stability, which is ironic given how he began yesterday…

    But that was followed quickly by a six-tweet-rant nothing short of what we would expect from a dejected five-year-old who just got denied another scoop of ice cream…

    Krugman once again blames the ignorance of the deplorable masses (who just don't get what a "fraudster" Trump is) in shunning him and his "know-it-alls", but he has been heading down this hill of manic-depressive lashing out for weeks now having recently suggested Trump will unleash a 9/11-style attack to legitimize his presidency.

    Is he hoping to maintain a groundswell of "well, if he is not hitler… he must be worse" thoughts among those so easily led? Still, coming from a man who has prognosticated alien invasions as a global economic growth engine, we are not sure if he is mental situation is improving or deteriorating. We wish him well.

  • Will The CIA Assassinate Trump? Ron Paul Warns Of "More Powerful, Shadow Government"

    Submitted by Mac Slavo via SHTFPlan.com,

    It isn’t just that Donald Trump routinely thumbs his nose at the establishment, insults media figures he sees as unfair and bucks conventional wisdom.

    It is that President-elect Trump is defying the will of the deep state, military industrial complex base of ultimate power in the United States. That is why he is treading dangerous waters, and risks the fate of JFK.

    Trump publicly dissed the intelligence community assessments on Russian hacking; they retaliated with a made up dossier about the alleged Trump-Putin ‘golden shower’ episode.

    While it may be a silly falsehood, it may also be serving as a final warning that they get to script reality, not him.

    Perhaps they want Trump to feel blackmailed and controlled by alluding to fake dirt, while reminding him of the real dirt they hold on his activities (whatever it may be).

    Insulting the credibility of the intelligence community in a public way – as the man elected to the highest office in the land – is liable to ruffle a few feathers, and it could provoke a serious response.

    Trump knows the power of the people he is taunting, but he may not be aware of where the line is between play in political rhetoric and actually irritating and setting off those who control policy.

    There is plenty of Trump misbehavior that can be simply written off, or trivialized, but cutting into the war and statecraft narrative of the shadow government steering this deep state is a deviation too far.

    It is one thing to play captain, but another to imagine that you steer the ship. They are happy for Trump to take all the prestige and privileges of the office; but not for him to cut into the big business of foreign conflict, the undercurrent of all American affairs, the dealings in death, drugs, oil and weapons, and the control of people through a manipulation of these affairs.

    If President Trump takes his rogue populism too far, he will suffer the wrath of the same people who took out Kennedy… there are some things that are not tolerated by those who are really in charge.

    And now leaders in the Senate are warning President-elect Trump about the stupidity of going against the national-security establishment.

    As Jacob G. Hornberger warns:

    In a truly remarkable bit of honesty and candor regarding the U.S. national-security establishment, new Senate minority leader Charles Schumer has accused President-elect Trump of “being really dumb.”… for taking on the CIA and questioning its conclusions regarding Russia.

     

    “Let me tell you, you take on the intelligence community, they have six ways from Sunday at getting back at you…. He’s being really dumb to do this.”

     

    […]

     

    No president since John F. Kennedy has dared to take on the CIA or the rest of the national security establishment […] They knew that if they opposed the national-security establishment at a fundamental level, they would be subjected to retaliatory measures.

     

    Kennedy… After the Bay of Pigs, he vowed to tear the CIA into a thousand pieces and scatter them to the winds. He also fired CIA Director Allen Dulles, who, in a rather unusual twist of fate, would later be appointed to the Warren Commission to investigate Kennedy’s murder.

     

    Kennedy’s antipathy toward the CIA gradually extended to what President Eisenhower had termed the military-industrial complex, especially when it proposed Operation Northwoods, which called for fraudulent terrorist attacks to serve as a pretext for invading Cuba, and when it suggested that Kennedy initiate a surprise nuclear attack on the Soviet Union.

     

    […]

     

    Worst of all, from the standpoint of the national-security establishment, [Kennedy] initiated secret personal negotiations with Soviet Premier Nikita Khrushchev and Cuban leader Fidel Castro, both of whom, by this time, were on the same page as Kennedy.

     

    […]

     

    Kennedy was fully aware of the danger he faced by taking on such a formidable enemy.

    And to the extent that President Kennedy consciously stood up to the system, he paid the price for his attempt at independent wielding of power from the Oval Office.

    It is a shuddering thought. A sharp lesson in history that must not be misinterpreted.

    The implications for Trump are quite clear. If his refusal to take intelligence briefings, or follow CIA advice is serious, then serious consequences will follow. If Trump is serious about peace with Putin when they insist on war, there will be a problem.

    There are several powers behind the throne that have wanted to ensure that presidents don’t let the power go to their head, or try to change course from the carefully arranged crisis-reaction-solution paradigm.

    True peace is not good for military industrial complex business; true peace, without the persistence of grave threats, and plenty of sparks of chaos to back it up, cannot be tolerated.

    As things have progressed today, making friendly with Putin, and calling off the war with Russia may simply be impermissible. If Trump is attempting to negotiate his own peace – and sing along with Frank Sinatra’s “My Way” at the inauguration, then he is in for a very rude awakening.

    If, on the other hand, he is the Trump card being played by this very same establishment, then things may develop according to the same ultimate objectives, albeit through a ‘wild card’ path styled after the ego of President Trump.

    With Goldman Sachs and neocon advisors filling up his administration, Trump may be simply nudged in the right direction. But the intelligence community is not willing to take many chances – and there are clearly contingencies in place.

    As SHTF has previously reported, the continuity of government “Doomsday” command-and-control planes were brought out after the election as a public show of power to Trump and the American people. The shadow government is real, and for now, maintains dominance.

    Former congressman and presidential candidate Ron Paul warned of the shadow government taking control of President Trump’s administration before it was even formed:

    You know, we look at the president, we look at what he said, we look at what he might do, and we look at his advisors, but quite frankly, there is an outside source, which we refer to as a deep state or a shadow government. There is a lot of influence by people that are actually more powerful than our government itself, our president and on up. I mean, you take for instance how our government gets involved in elections around the world, whether it’s in the Middle East or Ukraine.

    Trump is reportedly retaining his own private security, bucking the protocol of Secret Service detail… and this clearly a sign that he and his team have thought through security issues and the possibility of an inside job.

    This is prudent, but these deep state guys have access throughout the system at every level. They are anywhere, and everywhere. Probably someone that Trump trusts. There are certainly many threats.

    For the sake of the stability of this country, and President-elect Trump’s own life, let us hope that they stay several steps ahead of anyone who might want to do him harm.

    This is eerie, but real.

    *  *  *

    On a personal level, it seems wise to prepare for the possibility of widespread unrest due to political instability.

    Tread carefully at the scene of the inauguration, and any high profile political gatherings or demonstrations.

    Riots at the inauguration, or in cities throughout the country are possible, maybe even likely, as is an attempted assassination. Even if this scenario is a long shot, and taboo to even discuss, the role of the CIA in past coups, revolutions and uprisings is enough to warrant taking precautions.

    There is an element of chaos present during this unprecedented transfer of power to the 45th president, and a wounded animal in the defensive-attack posture.

    If you are at a protest, either as a participant, or as an observer, remain aware of the larger actions of the crowd, identify potential provocateurs and stay away from points of potential violence. Police could use anti-riot gear and spray the crowd, fire rubber bullet, use microwave heating or auditory devices, make mass arrests, or block off large portions of the city.

    If anything significant happens, use any available phone or camera to film it, but be prepared for confiscation or technologies to wipe phones. An EMF shielded bag could block this; live stream or upload instantly to as many video platforms as possible, but they have been known to jam cell phone signals at mass gatherings and demonstrations. Make copies and store a physical copy, and several back-ups.

    If you are at home, do not wait for the all clear signal from the authorities, shelter in place and prepare to ride out a storm, if something sensational or deadly takes place and panic spreads. Do not trust the media; and try to take notice if a coup has taken place, and constitutional authority subverted.

  • In His First Foreign Trip As President, Trump Plans To Meet With Putin In Reykjavik

    Donald Trump and his advisers have told British officials their administration’s first foreign trip will be a meeting with Russia’s Vladimir Putin in the capital of Iceland, the Sunday Times reported, citing an unidentified source, a move that is certain to unleash even more domestic and foreign criticism of Trump’s alleged proximity to the Russian leader.

    According to The Sunday Times, Trump hopes to conduct the Putin “summit” within weeks of his January 20 inauguration in the Reykjavik, “emulating Ronald Reagan’s Cold War deal-making in Reykjavik with Mikhail Gorbachev.”  

    The meeting with Vladimir Putin, which would be Donald Trump’s first foreign trip, is where Trump will start working on an agreement limiting nuclear arms within a “reset” in US-Russian relations. The Times adds that according to sources close to the Russian Embassy in London, Moscow would agree to a summit between the two heads of state.


    A summit between Putin and Trump could reset western relations with the Kremlin.

    The meeting would come just over 30 years since the historic summit on October 11-12, 1986, between Ronald Reagan and Mikhail Gorbachev, the second in a series of meetings that relaunched the relationship between the United States and the Soviet Union, and ultimately led to a material de-escalation in the raging, at the time, nuclear arms race between the USA and USSR.

    And, just like Ronald Reagan then, Trump wants to discuss nuclear disarmament with Putin, the Times reported, adding that sources said Trump wants to meet Putin outside of Russia and that Reykjavik was a strong contender.

    The latest report comes just a day after Trump told the WSJ he is open to lifting the sanctions against Russia “under certain conditions.” In an hour-long interview on Friday, Trump said he wants to keep the sanctions that the Obama administration recently imposed on Russia “at least for a period of time.” However, the President-elect added that he would consider lifting the restrictions, depending on how helpful the Russians are in the fight against terrorism, as well as assisting with other goals that he feels are key to the US.

    The meeting has not officially been announced by Trump team officials or Russian officials, and reports say Iceland has not been formally contacted about such an event. But more importantly, the talking points for all of Sunday’s news shows and media talking points are currently being updated to reflect this latest olive branch by the Trump administration toward the Kremlin, which will be promptly spun as further “proof” of Putin’s diabolical control over his brand news Oval Office puppet.

  • 2017: Change Can Be A Bitch

    Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

    2016 brought a lot of changes, or rather, brought them to light. In reality, the world has been changing for many years, but many prominent actors benefitted from the changes remaining hidden. Simply because their wealth and power and worldviews are better served that way.

    It’s entirely unclear whether we will ever get a chance to see to what extent the efforts to hide developments have been successful, or even been perpetrated at all, because we don’t know to what extent truth and reality will be accessible in the future.

    What we can say at this point in time is that the changes 2016 delivered were urgently needed. There are many people out there who just want to turn back the clock, and change everything back to how it was, but they can’t, and that’s a good thing, because the way things were was hurting too many people.

    2016 will go down in history as the year when a big divide between groups of people in the western world became visible, a divide that had until then been papered over by real or imaginary wealth, as well as by ignorance and denial.

    When politics and media conspire to paint for the public a picture of their choosing, they can be very successful, especially if that picture is what people very much wish to see, true or not. But as we’ve seen recently, our traditional media have become completely useless when it comes to reporting news; the vast majority have switched to reporting their own opinions and pretending that is news.

    On the one hand, there is a segment of society that either has noticed no changes, or is so desperate to hold on to what they have left, that they resist seeing them. On the other hand, there are those who feel left behind by that first group, and by the idea that the world that is still functioning and even doing well.

    The first group has been captivated by, and believed in, the incessantly promoted message of recovery from an economic, financial and gradually also political crisis. The second see in their lives and that of their friends and neighbors that this recovery is an illusion.

    It’s like the old saying goes: you can’t fool all of the people all of the time. And that’s why you have Brexit and Trump and why you’re going to have much more of that, certainly across Europe. Things are not going well, and there is no recovery, for a large enough percentage of people that their votes and voices now swing the debates and elections.

    It’s not even complicated. This week there was a report from Elevate’s Center for the New Middle Class that concluded that half of Americans, 160 million people, can’t afford to have a broken arm treated (at $1,400). And sure, you can say that perhaps that number is a bit too high, but there have been many such reports, that for instance say the majority of Americans have less than $1000 in savings, and can’t even afford a car repair.

    In Britain numbers are not much different. Over the past decade, the country has been very busy creating an entire new underclass. If your economy is not doing well, and your answer to that is budget cuts and austerity, it’s inevitable that this happens, that you create some kind of two-tier or three-tier society. And then come election time, you run the risk of losing.

    Both Britain and the US boast low unemployment numbers, but as soon as you lift the veil, what you see is low participation rates, low wages and huge numbers of part-time jobs stripped of all the benefits a job used to guarantee. It allows those who still sit pretty to continue doing that, but it’ll come right back to haunt you if you don’t turn it around, and fast enough.

    For many people, Obama, Merkel, Cameron and the EU cabal have been disasters. For too many, as we now know. That doesn’t mean that Trump will fix the economic problems, but that’s not the issue. People have voted for anything but more of the same. Which in Britain they’re not even getting either, so expect more mayhem there.

    In most places, some variety of right wing alternative is the only option available that is far enough removed from ‘more of the same’. Moreover, many if not most incumbent parties are in a deep identity crisis. Trump did away with the Republicans AND the Democrats, and they had better understand why that is, or they’ll be wholly irrelevant soon.

    In Britain, the most important votes in many decades was lost by the Tories, who subsequently performed a musical chairs act and stayed in power. You lost! Losers are not supposed to stay in power! But the other guys are all too busy infighting to notice.

    That identity crisis, by the way, is not a new thing. If you look across the western political spectrum, there are all these left wing and right wing parties happily working together, either in coalition governments or through other ‘productive’ forms of cooperation. So who are people going to vote for when they’re unhappy with what they’ve got? Where is that ‘change’ that they want? Not on the traditional left or right.

    So you get Podemos and M5S and Trump and UKIP and Le Pen. It’s not their fault, or the voters’ fault, it’s the political establishment that has tricked itself into believing in the same illusion it’s been promoting to voters.

    And yes, they have now proven that it’s possible to stave off, for a number of years, a deeper crisis, depression, by borrowing and printing ‘money’. Especially if you can at the same time hit the poorest in your society with impunity.

    But in the end no amount of fake or false news on the economic front will allow you to continue the facade for too long, because people know when they can’t afford things anymore. The evidence here is somewhat more direct than with regards to political fake news, though they may well both follow the same pattern of ‘discovery’.

    Our societies are still run as if there is no real crisis, as if it’s all just a temporary glitch, as if the incumbent models function just fine, and as if recovery is just around the corner. And we can make it look as if that is true, but only for an ever smaller amount of time, and for an ever smaller amount of people.

    The basic issue here is not a political one. It’s economic. Our economic systems have failed, and they can’t be repaired. We should always have realized that no growth is forever, but at least we now know. Or could know, it’ll take a while to sink in.

    Next up is a redo and revamp of those economic systems, but that is not going to be easy, and may not get done at all. The resistance may be too strong, warfare -economic or physical- may seem like a way out, there are many unknowns. We could, ironically, get quite far in that redo if we simply cut all the waste for our economic processes, but then again, that would have us find out that much of the system runs entirely on wasting stuff, and wasting less kills the system.

    However that may be, and however it may turn out, this is where we find ourselves. Protesting Trump and Brexit is inevitable, but it doesn’t address any core issues. From a purely economic point of view, Obama failed spectacularly, as did David Cameron, as does Angela Merkel. And as do, we will find out in 2017, many other incumbent ‘leaders’.

    Their successors, whatever political colors they may come from, will all come to power promising, and subsequently attempting, to restart growth. Which is no longer feasible across an entire country, or even if it were, it would mean squeezing other countries. With corresponding risks.

    Trump and Brexit are necessary, perhaps even long overdue, in order to break the illusion that things could go on as they were. But they are not solutions. America needs a big wake-up. Trump looks likely to deliver one. That is needed for the rest of the country to wake from its slumber. Ask yourself: are you going to get weaker from dealing with a Trump presidency? Maybe not the best question, or at least not before having asked: do you know how weak you are right now?

    For Britain to leave the EU is a great first step. As I’ve said many times, centralization is not an option without growth. And Brussels has shown us quite a few of the worst consequences of centralization. Nobody should want to be a part of that.

    Summarized: for most people, 2017 will be the year of the inability to understand where their favorite worldview flew off the rails. Change can be a bitch. But change is needed to keep life alive.

  • Harvard Is 'Billionaire-Making' University

    Want to learn about the history of economics, how to code with Ruby on Rails, or the essentials of string theory? It’s all out there for free on the internet, and anyone who has the time or energy can learn it directly from the experts.

    The Information Age grants us an unprecedented amount of access to the world’s knowledge – and some thinkers like James Altucher or Peter Thiel see this leading to a path where the role of colleges and universities will continue to diminish.

    We share that sentiment. The most recent crop of successful entrepreneurs like Evan Spiegel or Mark Zuckerberg already proves that entrepreneurs can make billions without spending a full four years in the classroom. The forthcoming generation will be even less tied to attending brick-and-mortar institutions.

    However, as Visual Capitalist’s Jeff Desjardins notes, there’s one caveat to this line of thought, however, and it coincides with this week’s chart. While one can say that the actual academic value of these institutions may be undermined by access to the digital world, the value of these as places to “rub shoulders” with up-and-comers still remains entrenched.

    Courtesy of: Visual Capitalist

     

    A BILLIONAIRE MAKING MACHINE

    Talk to any successful person in business and they will tell you that developing a strong network is half of the battle. As far as schools go, Harvard is the perfect example of the “network effect” at work.

    To date, a total of 35 of the richest 500 people in the world have emerged from the storied halls of Harvard. In fact, more billionaires have graduated from Harvard than all of those hailing from Saudi Arabia and Spain combined.

    The total net worth of the top 35 Harvard billionaire graduates? It’s $309 billion – roughly equivalent to the GDP of Hong Kong or Ireland. With alumni like Charlie Munger, Meg Whitman, John Paulson, Steve Ballmer, Paul Singer, Ken Griffin, Ray Dalio, and Michael Bloomberg among the ranks of Harvard graduates, it’s a powerful hub to tap into. Today’s Harvard students and professors take advantage of this prestigious network every day.

    Elite universities still serve as filtering mechanisms that only bring in students that are smart, well-connected, or both. Top schools like Stanford or Harvard have acceptance rates less than 6%, and this exclusivity gives graduating students a connected and privileged network from the get-go.

    One hundred years from now, will these institutions still have the same track records from the exclusivity factor alone? It remains to be seen, but for now they are still undisputed billionaire making machines until proven otherwise.

  • The Clinton Global Initiative is shutting down

    This article was originally posted at www.disobedientmedia.com

    A document from the New York State Department of Labor reveals that the Clinton Global Initiative is being discontinued.

    Filed on January 12, 2017, the document shows the layoff of a specialist employed by the Clinton Global Initiative as part of a “plant closure” and that the reason for their discontinuation was the “Discontinuation of the Clinton Global Initiative.”

    The news of the closure of the Clinton Global Initiative comes after reports emerged in the Fall of 2016 that they were laying off dozens of workers at their New York offices.

    The Clinton Global Initiative was founded in 2005 by Bill Clinton and associate Doug Band. Band and Clinton were dogged by accusations of corruption, which intensified after 2016 document releases by Wikileaks revealed that Band was soliciting large numbers of donations for Clinton through his public relations firm, Teneo.

  • Treasury Specs Are So Short, It Is Now A 4 Sigma Event

    With doubts that the “Trumpflation” trade is over creeping ever higher, leading to a precarious decline in the USD in recent days, and prompting comparisons to the Dollar’s move at the start of 2016 when the greenback’s ascent dramatically reversed…

    … resulting in a pick up in the long end, which has outperformed the Dow YTD in 2017…

    … it was surprising to see that traders, seemingly unfazed by recent price action, took their record shorts across the Treasury curve, and made them even recorder.

    According to the latest breakdown of short positions by Deutsche Bank, speculators increased their net shorts by $7.7 billion in 10Y cash equivalents to $99.4 billion, a third successive week of record low positions.

    The Breakdown by 5Y net specs…

    … 10Y net specs…

    … and 30Y net specs…

    … shows just how aggressive the short pile up has been.

    According to DB’s calculations, the net short position is now a four sigma event, having grown to nearly four standard deviations away from mean, even after adjusting for open interest.

    TY and FV net spec shorts reached new record highs of 395K (+50K) contracts and 437K (+27K) contracts, respectively. An exception was in TU futures where specs pared 35K contracts from their net shorts. Spec net short in Eurodollars also increased to a new record high of 2,442K (+326K) contracts.

    And while other asset classes were relatively unchanged, with the recent surge in net specs in oil, nat gas and copper all moderating slightly in recent weeks…

    … a separate observation by Bank of America suggest that the recent hedge fund infatuation with equities may be over, after hedge funds net sold the most S&P 500 contracts in a week since Jan. 2016., while the recent surge in Russell bullish bets also appears to have found a ceiling for now, and while buy-side net position in Russell 2000 was near record high (a “contrarian bearish” signal), a near term a move below 1347.2 would trigger a tactical bearish signal for the 1308.85 to 1300 area, according to Bank of America.

    Of all of the above, keep an eye on the record(er) TSY shorts: a few more indication that the Trump reflation rally is over, or worse, inverting especially if the recent spike in positive macro news tapers off, we may witness one of the most violent short squeezes across the rates complex in history.

  • Trump Has 6 Goldman Appointees- Swamp Drains You

     

    Dear Trump Voters: Goldman Wins Again.

     To the Trump voters scratching their heads at the PEOTUS’ recent appointments. This is the nexus of finance influencing politics in real time. Here is your chance to save yourselves years of denial, cognitive dissonance, regret, and therapy when you are forced to confront the reality that you were lied to. 

    Why Trump Voters are Stupid

    Via Soren K and Marketslant Once we cast our votes our egos have a stake in the outcome. Many become enamored with their “identity” decision. Like Obama voters before, some people actually believe things will be different this time under Trump. This bias only lets in facts corroborating their opinion. We see only what fits the identity narrative adopted. In an emergency, there are plenty of “safe spaces” we can find online to perpetuate the illusion.  

    And come on, Trump is the car salesman dripping in gold that attracts a certain type of car buyer, the status seeker. Maybe if I buy from him, I’ll be like him. Hillary is worse. At least Trump is transparent about his narcissism.

    Here’s the thing, people are slowly catching on to the lies that systems perpetuate on people by co-opting leaders. The people know now that Wall Street is about money first, and service second. People are beginning to sense that Obama was not an instrument of change. The Hillary and DNC emails should have stripped voters’ political delusions. Sadly that didn’t happen. The power of denial is strong

    Liberals are now the new bitter-clingers. They hug their idealistic but inflexible beliefs in globalism and a premature Kumbaya world. This is exactly how Obama described the right. He called them bitter-clingers to guns and G-d. 

    Meanwhile a whole generation of Republicans actually thinks  Trump is the answer to their prayers of hope and change. Wake up. Trump is so happy he’s on the inside now. He’s the Howard Stern of finance/politics. Ranting to be let in. Then kissing the ring of the ones who made campaign contributions to Hillary. 

    Trump Now has 6 Goldman Appointees

    1. Bannon – Sr. Adviser
    2. Scaramucci – Adviser
    3. Mnuchin – Treasury
    4. Powell – Counselor
    5. Cohn – NEC
    6. Clayton – SEC

    Goldman Sachs is a fraternal culture.  You never really “leave” Goldman, just like there are no EX-Marines. So the question any reasonable person should be asking is “Why so many Goldman people?”  The answer is we believe right now Trump and GS are building a symbiotic relationship. They are trading debt for influence via soft dollar transactions. But we have no factual evidence. We are not journalists with the resources to prove this. But there is plenty of history to tell. If there is a real journalist out there who isn’t worried about getting fired for taking the time to investigate a conflicted POTUS and an opportunistic bank with an amoral behavioral pattern now is the time to look. Not 4 years from now.

    Trump Org has a Lot of Debt

    As of Dec 12th here were 2 of Trump’s biggest corporate creditors and a simplified look at the issue each has with Trump. 

    1- Deutsche Bank: $364 million 

    • ?DB has DOJ issues in the amount of a $14 billion claim, major balance sheet problems and is in litigation with Trump on his debt.
    • DB’s DOJ issues are a huge conflict of interest if Trump is POTUS while the DOJ is investigating them

    2- Ladder Capital: $282 million

    • Trump is personally liable for $26MM
    • a POTUS who is personally liable for a debt has an enormous conflict of interest

     

    According to his own public disclosure,Trump, as of May, was on the hook for 16 loans worth
    at least $713 million. This list does not include an estimated $2 billion in debt     amassed
    by real estate partnerships that include Trump. One of those loans is a $950
    million deal that was cobbled together by Goldman Sachs and the state-owned
    Bank of China—an arrangement that ethics experts believe violates the Constitution’s emolument clause,     which prohibits foreign governments from providing
    financial benefits to federal officials. Mother Jones

    So, you can see that it is in Trump’s best interest to restructure these loans because of conflicts that could impede his objectivity as President. DB is in no position to risk more headlines that drive its stock even lower as it negotiates with the DOJ on a better settlement. And Ladder is reportedly struggling under the weight of its own balance sheet.

     

    Deutsche, Ladder, and Trump Need Help

    What we need here is someone who can do DB a favor and take the debt off their hands which would: alleviate them of Trump litigation, shrink their systemically risky balance sheet, and reduce chances of more DOJ headline risk tied to the new administration.

    For Ladder Capital, that hero must buy the debt and remove Trump’s personal liability.  Ladder had hired Citibank to help it find a buyer for the Trump debt according to Mother Jones.

    Meanwhile, Trump needs to divest himself of potential interest conflicts as well as make sure he is not a sitting president who can be sued by a creditor. What would be even cooler would be if somehow Trump could get his deals renegotiated at better terms. But how to reciprocate if someone did such a favor?

     

    Enter Goldman Sachs?

    Sources: GS had been buying Trump’s debt up from Deutsche and Ladder with totals so far around $400 mm. This is yet not confirmed, and we are not in the business of empty conjecture.  So lets see if there is a trade here.

    Like most people, we are kept in the dark fact-wise and fed a lot of crap by our elitist bettors. Some decision analysis is warranted.

    • Who Benefits?- Trump, DB, Ladder, and whoever buys the debt
    • Who has the ability to do it?- any Financial institution with good lawyers and weak ethics (all of them)
    • Who has done it in the past?- all of them 
    • How do Trump and the Debt Buyer materially benefit?
      •  Trump benefits because the debt terms under GS (or other bank) are probably better for him. (Lower rates, personal liability removed etc)
      • Trump Rewards GS (or other bank) with positions that afford  policy influence, “first to know”, status, etc
    • How does the Debt Buyer avoid conflict with Trump?
      • be squeaky clean with the DOJ- a white knight at the Buffet table always helps
      • have off balance subsids it can put debt in- e.g. former employees who run hedge funds that the former employer invests in
      • securitize debt and sell to client base- like subprime loans 
      • must be sharp  with a flat hierarchy and low bureaucratic latency- a firm that aggregates risk but decentralizes decision making (Marines, not Army)

    Here is your chance right now to acknowledge what your gut is already telling you before 4 years go by. Trump is full of shit and out for himself only. If something good comes of his administration it will not be because of him. It will likely be in spite of him. Intervention in markets and economies only helps in the direction of the trend.

     

    Why We Feel Goldman is Buying the Debt

    So empirically speaking, not as politicians who claim objectivity in their process but use rhetoric to manipulate facts, we can say 2 things:

    1. Based on evidence, belief, and past behaviors it is highly likely that some firm is going to accumulate Trump’s debt.
    2. And based on Trump’s appointees, GS culture and acumen, we put Goldman Sachs at the top of that list.

    When the data suggests or drifts in another direction we will adjust our opinion. We are careful to test our own biases and acknowledge them

     So we don’t know if Goldman is running around collecting Trump’s chits. But we damn sure expect someone is because there is a need for it on both sides of the equation. DB and Ladder need out, and Trump needs out. And we don’t see 10 guys from DB or CITI being hired. We see Goldman guys getting jobs. 

    And if we are wrong, that’s ok too. Because someone is buying that debt. DB and Ladder definitely do not want it.  

     

    Goldman and the  Emolument Clause

    There is one other large loan that already directly involves Goldman Sachs. It’s the one discussed in context of the Constitution’s emolument clause.

    Time: “It appears that Trump’s largest debt obligation is tied up with his 30% stake in the building at 1290 Avenue of the Americas, which is near Rockefeller Center. The financial obligation on that building is $950 million. Trump is responsible for 30% of that debt. It is, by far, the single biggest debt obligation among his signature properties. Were it to become a troubled asset for any reason, it would cause an immense and immediate problem for the bottom line of his business. There are two big lenders involved with the complicated debt structure on this asset, the Times reported. One of them is the state-owned Bank of China. The other is Goldman Sachs.”

    Legally, we are sure Trump will have a defendable argument. But biased and objective in his duties as POTUS? Doubt it.

     

    There is no Conclusive Proof, and There Never Will Be Again

    The brilliance of society’s embracing deductive reasoning banished opinions without facts being represented as truth. But unethical people find a way to pervert it now. They say things like: No body, no murder… “f they don’t have proof, just deny it...  and “What is the definition of IS?”  Facts are only the purview of higher ups. Its kind of a class warfare thing.

    The result is, no-one asks ( or is afraid to ask) the questions anymore that lead to the facts that prove or dismiss the intuition. Everyone is a fucking lawyer now. Did you see your child take the cookie? Then you can’t be sure, can you? Nothing gets investigated unless we have metaphysical certitude now. The Gold and Silver manipulation case is an example. The perpetrators do not care. They are off shearing sheep in Asia now after manipulating metals for 20 years.

    No-one will call that yellow thing with the orange beak a duck until it: drinks the water, lays an egg, and bites you on the face these days.

    Evidence Drift

    So when something cannot be proven factually, but the consilience of accumulated data using different measuring methods points to a likelihood of truth, adjust your behavior accordingly. We do not know if Trump is cutting deals that compromise his status, but we believe he is and will act accordingly.  We will stay away from the thing that looks like a duck until proven otherwise. 

    Good Luck

    H/T Vlanci@echobay.com

     

Digest powered by RSS Digest

Jan 14

Today’s News 14th January 2017

  • "The Spiritual Center" of the Democratic Party, John Lewis, Says Trump Is Illegitimate Because Muh Russians

    The cuckery has reached a fevered pitch and the democratic party, in what can only be construed as a traumatic emotional breakdown on an institutional level, are throwing the gauntlet down here and now by sending out the so called ‘spiritual center’ of the party, Congressman John Lewis — declaring Trump ‘illegitimate’ because (wait for it) MUH RUSSIANS.

    It has been an absolute blitzkrieg of U.S. intelligence leaks and disinformation, all designed to damage the incoming President — coordinated by uniparty shills in both the republican and democratic parties.

    Here’s Chuck Todd, channeling Ceasar Flickerman’s disingenuous and overly dramatic cadence from the movie The Hunger Games, interviewing  Congressman John Lewis — who said he would not be attending the inauguration because the Russians hacked John Podesta’s email box and revealed the democratic party was an organization rife with both corruption and criminality at the highest levels. These revelations must’ve been the difference between electoral college winship and bitter defeat, obviously.

    Charles Krauthammer, hardly a Trump fan, calls bullshit on all of these events — suggesting a conspiracy to diminish the office of the President is at hand.

     

     

    Content originally generated at iBankCoin.com

  • Is This The Coup In America? "U.S. Troops On Russian Border" To Start War Before Inauguration

    Submitted by Mac Slavo via SHTFPlan.com,

    Is there a coup underway, while America is in the transition period, and before Trump swears in as the 45th president of the United States?

    How real is the clash between the rogue Manhattan billionaire and the intelligence gang behind the throne? Who will win the struggle for power over foreign policy? These are serious times and require serious considerations.

    The U.S. sent an entire armored brigade to the Russian border, and Vladimir Putin is preparing as if for war. Missile defense systems are raised; tall claims and serious charges have been leveled; diplomatic relations have chilled to a permafrost. Several Russian diplomats have turned up dead recently, including one murdered in front of cameras during a dramatic assassination in Turkey. Russia has bucked U.S. order in the Middle East, and carved out a potential peace deal in Syria without their consultation.

    Things are reaching a flashpoint, and the system is concerned about controlling President-elect Trump given his rumored friendliness with Putin and plans to drop sanctions.

    Will there be a “shock” designed to correct Trump’s foreign policy, and set-off the ticking time bomb between East and West into all-out hostilities?

    Though these two world powers have clashed repeatedly in recent years, there several key factors that make this round extra alarming – and put a peaceful transition into question of exploding into total war, and an undermining force from within the deep state, CIA and shadow government:

    1. Until Donald Trump swears in and settles into the White House, the U.S. remains in a strange air, with an open window for a coup to take place, or a major unforeseen disruption (including something like a terrorist attack). If the deep state wants to start a war which President Trump will be forced to finish, they can. If the deep state wants that same war to block Trump from taking power, or from making major decisions, they will.
    2. With claims that Russia hacked the U.S. election, foreign policy has never been more warlike. Despite lacking evidence, and a politically-heavy spin on events, the powers-that-be intend to drive home the narrative that Putin crossed the line, while Trump is his puppet, and the alternative media his mesmerized “fake news” cheerleaders. This narrative is false, but could fan the flames for war. The new Cold War has been solidified; the aggressive rhetoric in Washington, and highly militarized movements such something big is coming down the pipeline. Though there may not be all out war, tensions will be very high; people will be placed under suspicion; nuclear war and other highly deadly scenarios are on the table like never before. The stage is set for world war three.
    3. Leftists and angry Hillary supporters are revolutionary, if severely misguided. Rosie O’Donnell was only the latest celebrity figure to call for martial law in order to postpone the inauguration, and put Trump on trial. The deep state crew that tags along with Hillary are also quite dangerous – the CIA and shadow advisor types. It is possible that some of these figures are involved in assassinating diplomats, chauffeurs and personal aides close to Putin and his network.
    4. In his final week in office, lame duck Obama could lay an egg that hatches the war. Or, intelligence community figures could go rouge; black ops, a false flag or a successful provocation/antagonization event could trigger a massive kick off to war that no president could simply stop with the stroke of a pen. There is the distinct possibility that if things go hot in a very short span of time, national emergency and outright war will put all other considerations behind them. Gear up for major conflict could be the only way to reset the devastating economic conditions, and the debt bomb that the federal government and federal reserve are prepared to drop on us.
    5. Defensive measures, including setting up anti-missile defense shields has moved inward, encircling Moscow, and those being used in the Ukraine, in Syria and elsewhere along the grand chessboard suggest extremely pugnacious diplomatic gestures – since true diplomacy has frozen up after repeated insult from Washington.

    via the Daily Mail:

    Russia has deployed anti-aircraft missile systems around Moscow to protect the capital from attack in the latest sign Vladimir Putin is preparing for war.

     

    The s-400 Triumph air defence system has been providing air cover for Russian forces in Syria since November, and is now being deployed on home soil.

     

    It is capable of hitting moving airborne targets including planes and incoming missiles and has a range of 400km.

     

    The news has emerged the day the US sent more than 3,000 troops to Poland in response to Nato’s concern Russia was becoming more aggressive.

    via Russia Insider:

    A US armored brigade (3rd Armored Brigade, 4th Infantry Division) is on the move to Russia’s Baltic border. After its equipment begun arriving in Europe last week so now have its soldiers.

     

    The move is so big it will require 37 trains and over one thousand rail cars to transport from Germany to Poland.

     

    A US armored brigade fields over 400 tracked and over 1300 wheeled vehicles including 80 62-ton Abrams tanks, 140 Bradley armored fighting vehicles and 400 humvees.

    There is always saber-rattling and hyperbolic claims of war, but right now is a critical time that will decide the next several decades of U.S. world power.

    Probably, they aren’t going to take any chances, and as desperate as they are, are looking to reignite public support for U.S. struggles abroad – by any means necessary.

    Beware these next few weeks, and remember that the continuity of government “Doomsday” command-and-control planes were brought out after the election as a public show of power to Trump and the American people. The shadow government is real, and for now, maintain dominance.

    This is not the time for games. Constitutional government is in jeopardy; war provocations and assassinations are taking place, and the duly-elected next president of the United States should be very carefully protected, watched over and pray for a peaceful transition.

    We are at risk of entering a very difficult and dangerous time.

  • New York Real Estate Prices Plunge In 4Q As Listing Days and Discounts Soar

    After reviewing the Elliman Report on the New York City Real Estate market at the end of 3Q 2016, we concluded that sellers had simply refused to accept the fact that the Manhattan real estate bubble had burst and rather than dropping prices had decided to simply let their apartments sit on the market unsold while hoping for a miracle.  Here was our conclusion (see “NYC Real Estate Bubble Bursts As Apartment Sales Crash 20%“):

    In conclusion, the lesson seems to be that the marginal New York City buyer has been priced out of the market (volume down 20%) while sellers have not yet accepted that the bubble has burst deciding instead to maintain listing prices while letting their apartments sit on the market longer amid growing inventory levels.  Meanwhile, the luxury market is the only segment that seems to be holding up which only serves to prove that Chinese billionaires still have cash they would like to hide in the U.S.

    Alas, with the release of Elliman’s 4Q 2016 report, it has become apparent that that miracle never materialized for New York’s hedgies and i-bankers.  In fact, the data from Manhattan real estate sales was almost universally bad with median pricing down 8.7% YoY, volume down 3.7%, listing days up 14.6% and discounts up to 5.5%.

    NYC Real Estate

     

    Meanwhile, a view of the longer term sales and pricing trends for Manhattan seems to suggest that the 2013-2015 expansionary period has officially turned.

    NYC Real Estate

     

    As was the case last quarter, the re-sale market was among the hardest hit segments with median prices down 6.3% YoY and volume down 1.5%. 

    NYC Real Estate

     

    Also like previous quarters, the luxury market, despite sinking volumes, is the only segment to continue to show growth in median sales prices.

    NYC Real Estate

     

    And while buyers are abandoning Manhattan en masse, Brooklyn seems to be the key beneficiary with purchases there soaring 22% YoY and median prices climbing 15%.  Per Bloomberg:

    Home buyers in Brooklyn competed for a record-low number of listings in the fourth quarter, driving up prices in the New York borough that’s historically been seen as a refuge from Manhattan’s high costs.

     

    Purchases in Brooklyn rose 22 percent from a year earlier to 2,582, while the median price of those deals climbed 15 percent to a record $750,000, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The number of homes for sale at the end of December tumbled 31 percent to 2,232, the fewest since the firms started keeping the data in 2008.

     

    The sales market in Brooklyn, the city’s most populous borough, is moving in the opposite direction to Manhattan’s, where rising supply is offering buyers more choices and the option to walk away from listings they view as overpriced. Manhattan’s median home price dropped 8.7 percent in the fourth quarter to $1.05 million as sellers awakened to a slowdown after years of holding out for all they could get, the firms said last week.

     

    “You have a disconnect with sellers in Manhattan, and Brooklyn is poaching some of that demand,” Jonathan Miller, president of Miller Samuel, said in an interview. “Overall, it’s generally a lower price point, and affordability has been a big issue the last couple of years.”

    NYC Real Estate

     

    Seems that “Bridge & Tunnel” is starting to have a nice ring to it.

  • Stunning Before And After Pictures Of The California Drought And Devastating Rain Storms

    Just as California’s liberal elites had convinced everyone that climate change had permanently altered global weather patterns such that the entire state was doomed to be stuck in a perpetual drought which would inevitably render it about as inhabitable as the surface of Mars within years, an unrelenting series of storms has struck and in a matter of days filled lakes, overflowed rivers and buried mountains in snow.  And just like that, 40% of California was lifted from a drought that had plagued the state for a decade.

    Of course, that much rain, in such a short period of time, can have devastating consequences as this video from Big Sur illustrates.

     

    As does this dashcam video of a flash flood in norther California. 

     

    In all, the rainfall totals from around Northern California over the past 14 days are staggering with certain areas receiving nearly 2 feet of rain according to SFGate.

    Downtown San Francisco has received 5.53 inches of rain since Jan. 1. The last time the city has seen a number higher than this was 1982 when 7.53 inches fell between Jan. 1 and Jan. 11. During last year’s El Niño year, S.F. had received close to three inches by this date.

     

    More impressive numbers: The coastal range mountains outside Guerneville, where roads and homes went underwater when the Russian River flooded, has received some 21 inches of rain since Jan. 4.

     

    In Downieville, where the Yuba River gushed with a heavy flow all week, some 23 inches of rain were recorded in the past seven days.

     

    And as bad as the flooding has been in parts of Northern California, it would have undoubtedly been even worse but for the the ability to divert some of the excess water into previously depleted reservoirs scattered throughout the state.

    The super soakings have filled reservoirs that were mere mud puddles, their cracked lake beds once exposed at the height of the drought that plagued the state for five-plus years and still persists in many regions, especially in Southern California.

     

    The reservoirs in Northern California have gained some million acres of storage in the past seven days, Michael Anderson, a climatologist with the California Department of Water Resources estimates. And total surface storage for the state is roughly 97 percent of average, with the the total storage for the largest reservoirs being at 111 percent of normal.

     

    Lake Oroville, the state’s second-largest reservoir, gained a bit more than 620,000 acre-feet in the first 10 days of January alone.

     

    “That is almost 18 percent of its capacity,” Anderson said. “Since Oroville was about 750,000 acre-feet below its storage limits during flood season (a consequence of the drought), they can keep all that water for future use and largely offset storage impacts from the drought.”

    Meanwhile, the transformation of the state’s reservoirs, in just a matter of weeks, is astonishing.

    Cali Drought

    Cal

    Cali Drought

    Yuba River

    Cali Drought

    Cali Drought

     

    What a difference a year makes with most reservoirs now near capacity….

    Cali Drought

     

    …versus ~30% of capacity last year.

    Cali Drought

     

    But we’re sure this abundance of rain is ever bit as much due to global warming as the lack of rain was last year…but we’re still waiting for official confirmation on that from our respected political leaders in Sacramento.

  • The US Economy: Back On Track?

    Submitted by Erico Matias Tavares via Sinclair & Co.,

    The weekly rail traffic report published by the Association of American Railroads (“AAR”) provides a great snapshot of US economic activity almost in real (weekly) time.

    Last July we noted that we were starting to witness some signals of a trend change, now suggesting a softening. But much has happened since then, including a broadly unexpected change in the political direction of the US. Have those signals been reversed as a result?

    Let’s start with some general indicators.

    The US ISM Manufacturing Purchasing Managers Index reported by the Institute for Supply Management fell briefly into contraction territory last August, which is often a presage for economic weakness ahead. However, it recovered handsomely in the following months and just printed the highest number in two years.

    A significant reversal to the upside was also observed in the latest National Federation of Independent Business (“NFIB”) Optimism Index for Small Businesses – the real wealth generators in the economy, which after some weakness mid-year just printed the highest level since the Financial Crisis of 2008.

    Not to be outdone, US investors have pushed equities to new historical highs, as shown in the graph above (by finviz.com).

    So things are looking up in the US right? Perhaps so… but the railroads aren’t feeling it.

    Rail intermodal traffic registers the long-haul movement of shipping containers and truck trailers by rail whenever combined with (a much shorter) truck movement at one or both ends. It covers a broad range of goods that Americans consume regularly, from laptops to frozen chickens, and is thus a great indicator of how consumers are doing. Given the huge importance of consumption for the US economy as a whole, for us this is the most revealing category.

    The grey cloud in our rail shipment graphs (in units) depicted henceforth shows the maximum and minimum volume range recorded for the same week over the five years prior (2011-2015). The green line shows the readings for 2016, now for the full year.

    After a strong start of the year, rail intermodal traffic started to underperform, although some pickup was observed later in the year. Aggregating the numbers by year provides a clearer picture, and here are the figures since 2006 (in MM units):

    For the first time since the lead up to the 2009 recession, yearly values are down versus the prior year. In percentage terms the 2015-16 decline is almost the same as the 2007-08 decline, when the Financial Crisis was raging.

    While clearly not a good sign this is just a warning given the still high transactional levels compared to prior years. If weakness persists in this category into 2017 then we will start getting really, really worried about the broader condition of the US economy.

    What about housing, another key industry? The forest products category includes lumber, a major input of house construction, and is shown in the graph below:

    Volumes were generally weak throughout the year, setting new five year lows. However, as per US Census Bureau data privately-owned housing completions in November came out at a very solid 15% (±13.5%) above the revised October estimate and a whopping 25% (±15.0%) over the prior year. How can these two seemingly disparate trends be reconciled?

    The answer might be in the brackets after the percentage growth figures. These statistics are estimated from sample surveys, so the Census Bureau provides a standard error to indicate a range where the real number might actually lie. And quite a wide one in fact. As such, the actual year-on-year figure could be somewhere in the range +10% to +40%. Given falling volumes transported by the railways even the lower estimate from these surveys looks optimistic. Another category to keep a close eye on.

    The motor vehicles and parts graph shown below includes all sorts of vehicles (used and new), passenger car and bus bodies, parts and accessories and other related equipment:

    This industry is of course very important for US manufacturing. Last July we noted that it had been the bright spot out of all the categories, recording new cycle highs up until then. And while that persisted for a while longer some weakness sipped in towards the end of the year.

    Still, volumes reached the highest level in 2016 since the go-go days of 2007. Not bad at all, but hopefully that year-end weakness is nothing to worry about… because as we shall see other industries – particularly in the primary sector – continue to struggle.

    After a terrible performance through 2015, metallic ores (shown above), which include all kinds of ores (iron, copper, lead, zinc and so forth) and waste scrap, managed to do even worse in 2016. Not much reason for optimism here (unless as a contrarian).

    The same can be said about coal, with volumes collapsing since the start of the year. Not even the recovery in the second half could avoid a miserable performance overall.

    What about oil production?

    Using rail shipments of crude oil and refined products to gauge production levels is a little tricky because volumes can be diverted to pipelines and/or the mix can change. That being said, the declines in rail shipments throughout 2016 are consistent with the drop in US production as reported by the IEA, shown in the graph below (in MM bopd):

    The silver lining is that the weekly oil rig count as reported by Baker Hughes has responded positively to the recent recovery in crude oil prices, as shown in the graph below (with WTI pushed forward a number of weeks):

    So we may see some pickup in activity going forward, as long as prices continue to hold. Other than that it’s pretty safe to say that the US extractive sector as a whole had another miserable year.

    And last but certainly not least, here are the rail shipments of grains:

    Volumes exploded higher in the second half of the year. The flipside of such volume increases was a continued correction in grain prices, particularly in corn and wheat (soybeans managed to hold up). Great news for consumers, but terrible for farmers: according to the latest USDA estimates in 2016 net farm income dropped to the lowest level in six years.

    ***

    If so many industries continued to struggle in 2016, with some key ones even deteriorating towards year-end, how come small businesses are so wildly optimistic?

    Perhaps the graph above, taken from the same NFIB small business report, provides the answer: while actual sales have languished expectations of future activity have gone through the roof. And that differential between actual versus expectations reached the highest level in many years.

    It is hard to dissociate this from all the economic promises of the incoming Administration. That may explain why small business owners across the US – and indeed stock investors – have become so optimistic. However, the hard goods-traded reality continues to show some concerning signs of weakness.

    Whether or not the new economic policies will prove to be successful the railways will likely feel it before anyone else. That’s why we will continue to keep an eye on the data.

    And with that, here’s our economic wish for 2017: Make Railways Great Again!

     

  • Artist's Impression Of Obama's Farewell Address

    “King of the world…”

     

    Source: MichaelPRamirez.com

  • Why Ridiculous Official Propaganda Still Works

    Submitted by CJ Hopkins via Counterpunch.org,

    For students of official propaganda, manipulation of public opinion, psychological conditioning, and emotional coercion, it doesn’t get much better than this. As Trump and his army of Goldman Sachs guys, corporate CEOs, and Christian zealots slouch toward inauguration day, we are being treated to a master class in coordinated media manipulation that is making Goebbels look like an amateur. This may not be immediately apparent, given the seemingly risible nature of most of the garbage we are being barraged with, but once one understands the actual purpose of such official propaganda, everything starts to make more sense.

    Chief among the common misconceptions about the way official propaganda works is the notion that its goal is to deceive the public into believing things that are not “the truth” (that Trump is a Russian agent, for example, or that Saddam had weapons of mass destruction, or that the terrorists hate us for our freedom, et cetera). However, while official propagandists are definitely pleased if anyone actually believes whatever lies they are selling, deception is not their primary aim.

    The primary aim of official propaganda is to generate an “official narrative” that can be mindlessly repeated by the ruling classes and those who support and identify with them. This official narrative does not have to make sense, or to stand up to any sort of serious scrutiny. Its factualness is not the point. The point is to draw a Maginot line, a defensive ideological boundary, between “the truth” as defined by the ruling classes and any other “truth” that contradicts their narrative.

    Imagine this Maginot line as a circular wall surrounded by inhospitable territory. Inside the wall is “normal” society, gainful employment, career advancement, and all the other considerable benefits of cooperating with the ruling classes. Outside the wall is poverty, anxiety, social and professional stigmatization, and various other forms of suffering. Which side of the wall do you want to be on? Every day, in countless ways, each of us are asked and have to answer this question. Conform, and there’s a place for you inside. Refuse, and … well, good luck out there.

    In openly despotic societies, the stakes involved in making this choice (to conform or dissent) are often life and death. In our relatively liberal Western societies (for those of us who are not militant guerillas), the consequences of not conforming to the official narrative are usually subtler. Despite that, the pressure is still intense. Conforming to the consensus “reality” generated by these official narratives is price of admission to the inner sanctum, where the jobs, money, professional prestige, and the other rewards of Capitalism are. Conforming does not require belief. It requires allegiance and rote obedience. What one actually believes is completely irrelevant, as long as one parrots the official narrative.

    In short, official propaganda is not designed to deceive the public (no more than the speeches in an actor’s script are intended to deceive the actor who speaks them). It is designed to be absorbed and repeated, no matter how implausible or preposterous it might be. Actually, it is often most effective when those who are forced to robotically repeat it know that it is utter nonsense, as the humiliation of having to do so cements their allegiance to the ruling classes (this phenomenon being a standard feature of the classic Stockholm Syndrome model, and authoritarian conditioning generally).

    The current “Russian hacking” hysteria is a perfect example of how this works. No one aside from total morons actually believes this official narrative (the substance of which is beyond ridiculous), not even the stooges selling it to us. This, however, is not a problem, because it isn’t intended to be believed … it is intended to be accepted and repeated, more or less like religious dogma. (It doesn’t matter what actually happened, i.e., whether the “hack” was a hack or a leak, or who the hackers or leakers were, or who they may have been working for, or what whoever’s motives may have been. What matters is that the ruling classes have issued a new official narrative and are demanding that every “normal” American stand up and swear allegiance to it.)

    The ruling classes are not exactly making it easy for their followers this time. Their new official narrative (let’s go ahead and call it “The Putinist Putsch to Destroy Democracy”) is so completely fatuous that it’s beyond embarrassing. The plot is more or less what you’d expect from a mediocre young adult novel or a Game of Thrones-type fantasy series. And if that wasn’t already humiliating enough for the liberals being asked to pretend to believe it, the PR folks in charge couldn’t even be bothered to assemble a new collection of liars to market their childish fairy tale for them. Not only are they insisting that liberals take the word of the “Intelligence Community” and the mainstream media that sold the world the “Saddam Has Secret WMDs” hoax, they actually dispatched James R. Clapper to sit there, in more or less the same spot he sat in the last time he lied to Congress, and do his dog and pony show again.

    Meanwhile, the ruling classes’ papers of record, which cosmopolitan liberals rely on to provide a simulation of “serious journalism,” highbrow “arts and culture,” and so on, have descended to the level of the National Enquirer. Among the recent highlights was The Washington Post‘s “Russians Hacked the Vermont Power Grid” story, which it turned out involved neither Russians nor hackers, nor the Vermont power grid’s actual computers, and was basically just another made-up story, like the one about Putin’s Fake News Army. The New York Times, which has also been dutifully rolling out the new official narrative, has taken the leash off Charles M. Blow (aka “The Withering Gaze”), who is accusing Trump of being Russia’s appointment” and proclaiming his election “an act of war.” And now, as I was writing this piece, they hit us with the “Golden Showers” story, in which Trump paid a bunch of Russian hookers to pee on the bed where Obama slept. Any day now we are going to be told that Elvis is secretly working with Putin to deploy a Zhirinovskian gravitational weapon in a UFO disguised as Jesus that Assange and Snowden will personally pilot across the Atlantic to sink America. It’s like some kind of loyalty test in which the ruling classes are trying to determine just how far they can go with this crap before liberals refuse to salute any more of it.

    The point of all this propaganda is to delegitimize Donald Trump, and to prophylactically reassert the neoliberal ruling classes’ monopoly on power, “reality,” and “truth.” In case this wasn’t already abundantly clear, the neoliberal ruling classes have no intention of giving up control of the global capitalist pseudo-empire they’ve been working to establish these last sixty years. They’re going to delegitimize and stigmatize Trump (and any other symbol of nationalist backlash or resistance to transnational Capitalism), bide their time for the next four years, and then install another of their loyal servants … after which life will go back to “normal,” and liberals will do their best to forget this unfortunate period where they pretended to believe this insipid neo-McCarthyite nonsense.

    If I wasn’t worried that Trump is going to launch an all-out War on Islam, or that one of “our boys” in the tanks Obama has theatrically ordered to the Russian border was going to go bonkers and try to “git some” for Clinton, I’d be looking forward to seeing just how batshit crazy it’s going to get.

  • "China's Next Time Bomb" – A Look Inside The Insane World Of China's Bitcoin Traders

    The recent tumble in bitcoin, driven by a stampede of Chinese sellers who until last week were willing buyers at any price, has exposed the weakest link in bitcoin’s until recently exponential rise: the mood and social psychology of Chinese momentum and bubble chasers, who like clockwork rush into any one given asset, bid it up to ridiculous levels, watch the bubble burst, before moving on to the next bubble.

    The good news is that courtesy of $25 trillion in local savings, or more than double the amount in the US, the bubble eventually returns to where it burst. The bad news is that in the meantime, those who chased the original bubble lose most if not all of their money.

    Unfortunately, for most of China’s bitcoin traders, the bad news may be just starting.

    Take the story of Ding Wen, who by the age of 34 had built up a personal fortune of more than two million yuan after years of hard work at an internet company in Nanjing, in east China’s Jiangsu province. But, as SCMP recounts his tale, Wen saw most of that wealth go up in smoke on January 5, when China’s bitcoin market crashed, sending the price of the virtual currency plunging 40 per cent in just a few hours after lunch.

    With the market in free fall, Ding was unable to log into his account with China’s biggest bitcoin trading platform, Huobi, meaning he could not sell off his holdings or top up his principal to meet the margin call. By the time he managed to log on in the evening, most of the bitcoins in his account had been compulsorily sold off by Huobi for 6,361 yuan each, lower than his purchase price of 8,101 yuan. This included the part of his investment he had bought using a loan he obtained from Huobi by pledging the bitcoins he owned originally.

    “I have taken on big risks when making leveraged betting, but the collapse of the trading system made me unable to run stop-loss orders, so I think the platform should compensate for investors’ losses,” Ding said.

    The platform disagrees.

    Ahead of the market crash, Ding had borrowed 995 million yuan from Huobi by pledging a principal consisting of the 409 bitcoins he already owned. He then bought a further 1,228 bitcoins with the loan. Most of his holdings were compulsorily sold out by Huobi during the price collapse while he was unable to access his account.

    Meanwhile, Wu Xing, head of marketing at Huobi, said the log-in delay was caused by a torrent of visits and selling orders, which exceeded the capacity of the website. “[The loss] was due to irresistible factors and not included in the compensation scope. We are sorry and understand the feelings of the investors,” she said.

    So to recap… trading the extremely volatile bitcoin on massive, unregulated margin, in an exchange that arbitrarily locks out its clients? 

    What can possibly go wrong.

    * * *

    According to SCMP, “many analysts and investors fear China’s bitcoin market is quickly turning into another time bomb like the scandal-hit peer-to-peer (P2P) lending sector. A series of P2P lending platform frauds rocked the country last year and washed away tens of billions of yuan of investment from small investors, creating a headache for local and central governments, which feared social unrest.”

    Now speculation, derivative products, leveraged betting and program trading appear to be spreading in the largely unregulated bitcoin market. Such practices are thought to be responsible for pushing up the price of bitcoin by more than 260 per cent since early 2016.

    The market hit a historic high of 8,995 yuan on January 5… Just ahead of the crash.

     

    Most of the transactions are happening on three privately owned platforms or through P2P trading.

    Data provider Bitcoinity shows trading volume in China accounted for more than 98% of the global total during the past 30 days amid more pronounced price fluctuations. Until now, no regulator has overseen this market, which sees daily turnover worth tens of billions of yuan. However, things appear to be changing fast.

    After the great bitcoin crash, the People’s Bank of China announced on Wednesday afternoon that it had sent inspection teams to the country’s top three bitcoin trading platforms to scrutinise their practices. It is the first regulatory move China’s central bank has made publicly involving the virtual currency.

    The PBOC has been in talks with the platforms from time to time in private since 2013 and asked them for data and information, according to an executive from a major trading platform, who asked not to be named. But the authorities have not formally listed bitcoin under their regulatory framework. Nor have they issued any rules to govern the market.

    Like all other central banks, the PBOC defines bitcoin as a commodity rather than a currency, which ruled it out of their existing regulatory coverage in late 2013. Aurélien Menant, founder and chief executive of Gatecoin, a cryptocurrency and blockchain assets trading platform based in Hong Kong, said: “Given the dominant role of Chinese exchanges, which represent 95 per cent of global bitcoin trading activity, at more than 50 billion yuan every day, it’s likely that the PBOC recognises the growing significance of this new and so far unregulated alternative financial market.

    “The PBOC has been engaging with the major cryptocurrency exchanges in China for several years, but given the sudden price movements and high volumes traded over the past few weeks, it’s very clear that now it just wanted to step up their checks on market manipulation and money laundering.”

    In an announcement issued on Wednesday, the central bank said it was joining forces with the Beijing Financial Bureau to probe trading platforms including Huobi and OKCoin to check if they were running in accordance with foreign-exchange management, anti-money-laundering and trading exchange rules.

    Mainland media reported in recent months that bitcoins had become a popular tool for investors to export money out of China, circumventing capital controls that had been tightened by the regulators amid the yuan’s sharp depreciation. Cheung Chun-yin, a PwC China fintech partner, said it was possible for bitcoin holders in China to circumvent domestic capital control limits by selling bitcoin to an overseas buyer in exchange for foreign currency.

    “In theory, the bitcoin market is borderless, and as long as you could find a buyer overseas, you would be able to get US dollars, and the trade could happen without leaving a trace, with no record in the traditional banking system,” he said, adding that the volume of capital flow through this channel was likely to be quite limited.

    Feeling attacked, the local industry quickly rose up in defense. Zhao Dong, owner of Jiandong Tech, a company that buys and sells bitcoin, agreed that the actual amount of capital leaving the country through bitcoin was not likely to be very high.

    “Among the 16 million bitcoins already dug out across the world by now, there are around four to five million held by the Chinese. That already caps the total value, while most of the owners are more interested in short-term speculation on the mainland market than exporting them for foreign currencies,” he said. Cheung said that although neither the mainland nor Hong Kong financial regulators had included bitcoin in the existing regulatory framework, bitcoin-related activities were “evolving and bearing the features of traditional financial market activities” and overlapping with the traditional financial system. That makes it more important than ever that the regulators start to take notice.

    The biggest problem for the Chinese bitcoin market, according to Zhao, is that “the trading platforms are facing the challenge of having to prove themselves innocent” because many investors accuse them of inside trading or market manipulation. The market boom and the quick build-up of leverage had left the market in urgent need of official regulation, he said. Chen Yunfeng, a senior partner with Zhonglun W&D law firm, based in Shanghai, said he was dealing with an increasing number of bitcoin-related disputes. These included cases of bitcoin theft and scams in which investors have been unable to verify their trading partners.

    “The bitcoin market is facing great risks, with turnover and leverage climbing quickly, and mixed up with unregulated foreign-currency trading and money laundering. I think it is time that the PBOC prepared new policies,” he added.

    Industry players said the PBOC was mulling the idea of introducing third-party custodian services to govern the market by taking care of the account records, cash or bitcoins on behalf of the platforms. In early August, investor confidence in bitcoin took another knock when Bitfinex, a prominent Hong Kong-based digital currency exchange, reported the theft of about US$65.8 million worth of bitcoins. About 119,756 bitcoins were lost in a security breach, the company said.

    In early 2014, Japan-based bitcoin exchange MtGox collapsed over the loss of nearly US$390 million worth of the virtual currency. Police later arrested its chief executive, Mark Karpeles, who was suspected of having accessed the computer system of the exchange and falsifying data on its outstanding balance.

    * * *

    Meanwhile, overnight BTCChina announced (and other exchanges allegedly followed) that it had suspended its margin loan service indefinitely. The move came after the exchange received “informal guidance” from the PBoC, which has been more actively engaged with domestic bitcoin exchanges amid the run-up in bitcoin prices seen at the start of the year.  While the move may flush out much of the bubbly euphoria, it may also lead to a far more stable market.

    Alternatively, it may just accelerate the blow up of China’s “bitcoin time bomb.”

  • Some Election Interference Is More Equal Than Others – How Ukraine Meddled On Behalf Of Clinton

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    A couple of days ago, Politico published a fascinating piece describing how factions associated with the current Ukrainian government apparently interfered in the U.S. election on behalf of Hillary Clinton. The findings seem pretty damning, and certainly warrant at least some conversation within the American media given the 24/7 obsession with Russia. Nevertheless, most of you have probably never heard of this saga, since when it comes to the corporate media news cycle, some election interference is more equal than others.

    The article is lengthy, and can be confusing at times given all the moving parts, but I highly encourage you to read it. Ukrainian interference in the election can be traced to essentially two sources. First, there was the apparent collaboration between the Ukrainian embassy in Washington D.C. and a highly paid Ukrainian-American DNC consultant, Alexandra Chalupa. The second angle is far more disturbing, and involves the publicization of a so-called ledger demonstrating corruption between Paul Manafort and pro-Russian elements in Ukraine, by a parliamentarian named Serhiy Leshchenko. Bizarrely, the investigation was effectively dropped after Trump won the election, making you wonder if there was anything really there in the first place.

    What follows are excerpts from the excellent piece, Ukrainian Efforts to Sabotage Trump Backfire:

    Donald Trump wasn’t the only presidential candidate whose campaign was boosted by officials of a former Soviet bloc country.

     

    Ukrainian government officials tried to help Hillary Clinton and undermine Trump by publicly questioning his fitness for office. They also disseminated documents implicating a top Trump aide in corruption and suggested they were investigating the matter, only to back away after the election. And they helped Clinton’s allies research damaging information on Trump and his advisers, a Politico investigation found.

     

    A Ukrainian-American operative who was consulting for the Democratic National Committee met with top officials in the Ukrainian Embassy in Washington in an effort to expose ties between Trump, top campaign aide Paul Manafort and Russia, according to people with direct knowledge of the situation.

     

    The Ukrainian efforts had an impact in the race, helping to force Manafort’s resignation and advancing the narrative that Trump’s campaign was deeply connected to Ukraine’s foe to the east, Russia. But they were far less concerted or centrally directed than Russia’s alleged hacking and dissemination of Democratic emails.

     

    Politico’s investigation found evidence of Ukrainian government involvement in the race that appears to strain diplomatic protocol dictating that governments refrain from engaging in one another’s elections.

     

    The Ukrainian antipathy for Trump’s team — and alignment with Clinton’s — can be traced back to late 2013. That’s when the country’s president, Viktor Yanukovych, whom Manafort had been advising, abruptly backed out of a European Union pact linked to anti-corruption reforms. Instead, Yanukovych entered into a multibillion-dollar bailout agreement with Russia, sparking protests across Ukraine and prompting Yanukovych to flee the country to Russia under Putin’s protection.

     

    In the ensuing crisis, Russian troops moved into the Ukrainian territory of Crimea, and Manafort dropped off the radar.

     

    Manafort’s work for Yanukovych caught the attention of a veteran Democratic operative named Alexandra Chalupa, who had worked in the White House Office of Public Liaison during the Clinton administration. Chalupa went on to work as a staffer, then as a consultant, for Democratic National Committee. The DNC paid her $412,000 from 2004 to June 2016, according to Federal Election Commission records, though she also was paid by other clients during that time, including Democratic campaigns and the DNC’s arm for engaging expatriate Democrats around the world.

     

    She said she shared her concern with Ukraine’s ambassador to the U.S., Valeriy Chaly, and one of his top aides, Oksana Shulyar, during a March 2016 meeting at the Ukrainian Embassy. According to someone briefed on the meeting, Chaly said that Manafort was very much on his radar, but that he wasn’t particularly concerned about the operative’s ties to Trump since he didn’t believe Trump stood much of a chance of winning the GOP nomination, let alone the presidency.

     

    Chalupa said the embassy also worked directly with reporters researching Trump, Manafort and Russia to point them in the right directions. She added, though, “they were being very protective and not speaking to the press as much as they should have. I think they were being careful because their situation was that they had to be very, very careful because they could not pick sides. It’s a political issue, and they didn’t want to get involved politically because they couldn’t.”

     

    Shulyar vehemently denied working with reporters or with Chalupa on anything related to Trump or Manafort, explaining “we were stormed by many reporters to comment on this subject, but our clear and adamant position was not to give any comment [and] not to interfere into the campaign affairs.”

     

    Shulyar said her work with Chalupa “didn’t involve the campaign,” and she specifically stressed that “We have never worked to research and disseminate damaging information about Donald Trump and Paul Manafort.”

     

    But Andrii Telizhenko, who worked as a political officer in the Ukrainian Embassy under Shulyar, said she instructed him to help Chalupa research connections between Trump, Manafort and Russia. “Oksana said that if I had any information, or knew other people who did, then I should contact Chalupa,” recalled Telizhenko, who is now a political consultant in Kiev. “They were coordinating an investigation with the Hillary team on Paul Manafort with Alexandra Chalupa,” he said, adding “Oksana was keeping it all quiet,” but “the embassy worked very closely with” Chalupa.

     

    In fact, sources familiar with the effort say that Shulyar specifically called Telizhenko into a meeting with Chalupa to provide an update on an American media outlet’s ongoing investigation into Manafort.

     

    Telizhenko recalled that Chalupa told him and Shulyar that, “If we can get enough information on Paul [Manafort] or Trump’s involvement with Russia, she can get a hearing in Congress by September.”

    Sure seems like pretty close coordination between a DNC consultant and the official embassy of Ukraine in the midst of a Presidential election.

    Nevertheless, that’s small potatoes compared to what happened within the Ukrainian parliament itself. As Politico notes:

    While it’s not uncommon for outside operatives to serve as intermediaries between governments and reporters, one of the more damaging Russia-related stories for the Trump campaign — and certainly for Manafort — can be traced more directly to the Ukrainian government.

     

    Documents released by an independent Ukrainian government agency — and publicized by a parliamentarian — appeared to show $12.7 million in cash payments that were earmarked for Manafort by the Russia-aligned party of the deposed former president, Yanukovych.

     

    The New York Times, in the August story revealing the ledgers’ existence, reported that the payments earmarked for Manafort were “a focus” of an investigation by Ukrainian anti-corruption officials, while CNN reported days later that the FBI was pursuing an overlapping inquiry.

     

    Clinton’s campaign seized on the story to advance Democrats’ argument that Trump’s campaign was closely linked to Russia. The ledger represented “more troubling connections between Donald Trump’s team and pro-Kremlin elements in Ukraine,” Robby Mook, Clinton’s campaign manager, said in a statement. He demanded that Trump “disclose campaign chair Paul Manafort’s and all other campaign employees’ and advisers’ ties to Russian or pro-Kremlin entities, including whether any of Trump’s employees or advisers are currently representing and or being paid by them.”

     

    A former Ukrainian investigative journalist and current parliamentarian named Serhiy Leshchenko, who was elected in 2014 as part of Poroshenko’s party, held a news conference to highlight the ledgers, and to urge Ukrainian and American law enforcement to aggressively investigate Manafort.

     

    “I believe and understand the basis of these payments are totally against the law — we have the proof from these books,” Leshchenko said during the news conference, which attracted international media coverage. “If Mr. Manafort denies any allegations, I think he has to be interrogated into this case and prove his position that he was not involved in any misconduct on the territory of Ukraine,” Leshchenko added. 

    These are some really serious allegations, which makes his current behavior, which I’ll highlight later, that much more concerning.

    Manafort denied receiving any off-books cash from Yanukovych’s Party of Regions, and said that he had never been contacted about the ledger by Ukrainian or American investigators, later telling POLITICO “I was just caught in the crossfire.”

     

    The scrutiny around the ledgers — combined with that from other stories about his Ukraine work — proved too much, and he stepped down from the Trump campaign less than a week after the Times story.

     

    At the time, Leshchenko suggested that his motivation was partly to undermine Trump. “For me, it was important to show not only the corruption aspect, but that he is [a] pro-Russian candidate who can break the geopolitical balance in the world,” Leshchenko told the Financial Times about two weeks after his news conference. The newspaper noted that Trump’s candidacy had spurred “Kiev’s wider political leadership to do something they would never have attempted before: intervene, however indirectly, in a U.S. election,” and the story quoted Leshchenko asserting that the majority of Ukraine’s politicians are “on Hillary Clinton’s side.”

    Well, well, well…but there’s more.

    An operative who has worked extensively in Ukraine, including as an adviser to Poroshenko, said it was highly unlikely that either Leshchenko or the anti-corruption bureau would have pushed the issue without at least tacit approval from Poroshenko or his closest allies.

     

    “It was something that Poroshenko was probably aware of and could have stopped if he wanted to,” said the operative.

     

    And, almost immediately after Trump’s stunning victory over Clinton, questions began mounting about the investigations into the ledgers — and the ledgers themselves.

     

    An official with the anti-corruption bureau told a Ukrainian newspaper, “Mr. Manafort does not have a role in this case.”

     

    And, while the anti-corruption bureau told Politico late last month that a “general investigation [is] still ongoing” of the ledger, it said Manafort is not a target of the investigation. “As he is not the Ukrainian citizen, [the anti-corruption bureau] by the law couldn’t investigate him personally,” the bureau said in a statement.

    Note that the only thing that changed is Trump won the election, which apparently caused the Ukrainian government to backtrack on the entire thing after its sabotage failed to deliver the desire outcome.

    Some Poroshenko critics have gone further, suggesting that the bureau is backing away from investigating because the ledgers might have been doctored or even forged.

     

    And in an interview this week, Manafort, who re-emerged as an informal advisor to Trump after Election Day, suggested that the ledgers were inauthentic and called their publication “a politically motivated false attack on me. My role as a paid consultant was public. There was nothing off the books, but the way that this was presented tried to make it look shady.”

    As shameless as all of this is, it doesn’t end there.

    Poroshenko’s allies are scrambling to figure out how to build a relationship with Trump, who is known for harboring and prosecuting grudges for years.

     

    A delegation of Ukrainian parliamentarians allied with Poroshenko last month traveled to Washington partly to try to make inroads with the Trump transition team, but they were unable to secure a meeting, according to a Washington foreign policy operative familiar with the trip. And operatives in Washington and Kiev say that after the election, Poroshenko met in Kiev with top executives from the Washington lobbying firm BGR — including Ed Rogers and Lester Munson — about how to navigate the Trump regime.

     

    Weeks later, BGR reported to the Department of Justice that the government of Ukraine would pay the firm $50,000 a month to “provide strategic public relations and government affairs counsel,” including “outreach to U.S. government officials, non-government organizations, members of the media and other individuals.”

    The fact that foreign influence is purchased like this is simply disgusting, but I digress.

    In fact, I’ve saved the best for last…

    The Poroshenko regime’s standing with Trump is considered so dire that the president’s allies after the election actually reached out to make amends with — and even seek assistance from — Manafort, according to two operatives familiar with Ukraine’s efforts to make inroads with Trump.

    After essentially claiming that Manafort was a hired gun for Putin to intervene in the internal affairs of Ukraine, the government is now reaching out to him? You don’t have to be Sherlock Holmes to see something’s not adding up here. Was the entire investigation a fraud to help Hillary Clinton win the election? If so, isn’t that election interference?

    Nevertheless, I somehow I doubt we’ll see America’s three stooges, Graham, Rubio and McCain make a big stink over this one.

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Jan 13

Today’s News 13th January 2017

  • Why Has The White House Suddenly Released A Strategy For Dealing With A Catastrophic Meteor Impact?

    As SHTFPlan.com's Mac Slavo notes, we should take notice at the government preparations for disaster, and the possibility of a cataclysmic collision with damaging objects in space.

    At the same time, we should take notice at what they are preparing for with all the billions of dollars thrown at defense and survival, it comes in secretive infrastructure for a reclusive sect of power, and in top-down plans to contain the unrest.

     

    Preparations for the individual to survive, and be resilient are not being put in place in this government, though many other governments have made such an investment into the lives of individuals. Time and again, these people are told to brace for the worst, with little to show for it. A few have made their preps, and it may yet prove useful in this or some other disaster.

    Why Has The White House Suddenly Released A Strategy For Dealing With The Threat Of A Catastrophic Meteor Impact?

    Authored by The End Of The American Dream's Michael Snyder,

    Does the White House know something that the rest of us do not? As the Obama administration draws to a close, the White House has suddenly released a major document that details a multi-pronged strategy for dealing with the threat of a catastrophic meteor impact. Most of us remember movies such as “Deep Impact” and “Armageddon” that attempted to depict what such a crisis would look like, but up until fairly recently the U.S. government has never seemed to take this kind of threat very seriously.

    So what has changed?

    Of all the things that the White House could be focusing on, why this?

    And this new report is just the latest in a series of measures that the government has taken over the past couple of years to help prepare us for incoming meteors and asteroids. The following is an excerpt from a recent Gizmodo article…

    Concern over an apocalyptic asteroid strike has risen all the way to the top: The White House released a document this week detailing a strategy for National Near Earth Object (NEO) preparedness. Morgan Freeman would no doubt be proud, although honestly, the nation might have more pressing apocalypse concerns closer to home.

     

    Last year brought renewed interest in handling humanity-ending impact events. After a 2014 audit showed that NASA had a cruddy NEO preparedness system, the agency founded a new Planetary Defense Coordination Office (PDCO) last year to detect all of our potentially nasty NEO neighbors. The office quickly escalated talk to action, running preparedness drills with the Federal Emergency Management Agency (FEMA), launching spacecraft to gather asteroid information, and even drawing up plans to nuke the bad boys out of the sky if things get dicey.

    NASA continues to assure us that no threat is imminent, so why spend so much time, energy and resources on a non-existent crisis?

    If you want to read the 25 page document that the White House just released, it is entitled “National Near-Earth Object Preparedness Strategy” and you can read it for yourself right here.

    The document was put together by the Interagency Working Group for Detecting and Mitigating the Impact of Earth-bound Near-Earth Objects, and it outlined seven key objectives that the authors believe are important…

    1. Enhance NEO detection, tracking, and characterization capabilities
    2. Develop methods for NEO deflection and disruption
    3. Improve modelling, predictions, and information integration
    4. Develop emergency procedures for NEO impact scenarios
    5. Establish NEO impact response and recovery procedures
    6. Leverage and support international cooperation
    7. Establish coordination and communications protocols and thresholds for taking action

    And without a doubt, we definitely do need to enhance our detection abilities. Just the other day, a very large asteroid barely missed us, and we had only discovered it two days earlier…

    Early Monday morning, while the US East Coast was pouring coffee, dropping kids off at school, and cursing in traffic, a space rock as big as a 10-story building slipped past Earth.

     

    The asteroid, dubbed 2017 AG13, was discovered only Saturday by the University of Arizona’s Catalina Sky Survey, according to an email from Slooh, a company that broadcasts live views of space.

    We were very fortunate this time, but the truth is that our planet crosses paths with other giant space rocks on a very regular basis.

    In fact, a near-Earth object that is being called “a cross between an asteroid and a comet” will come fairly close to our planet in February…

    The latter “object”, dubbed the 2016 WF9, was detected by NASA in late November and has left scientist’s scratching their heads.

     

    They have described the celestial rock as a cross between an asteroid and a comet.

     

    It’s in the middle of its of.9 year orbit between Jupiter and Earth and will approach us on February 25, flying by at a distance of 32million miles from the planet.

    Currently, approximately 10,000 major near-Earth objects have been identified by scientists, and about 10 percent of them are one kilometer or larger in size.

    If one of those monsters directly hit our planet, we truly would be facing an extinction-level event.

    For example, just imagine the kind of devastation that would happen if a large asteroid or meteor hit the Atlantic Ocean. Tsunami waves hundreds of feet tall would be sent racing toward the coasts of North America, South America, Africa and western Europe, and millions upon millions of people would die.

    This is something that scientists have actually studied. According to a study conducted at the University of California at Santa Cruz, if a giant meteor did strike the Atlantic Ocean we could potentially see tsunami waves as high as 400 feet slam into the east coast of the United States…

    If an asteroid crashes into the Earth, it is likely to splash down somewhere in the oceans that cover 70 percent of the planet’s surface. Huge tsunami waves, spreading out from the impact site like the ripples from a rock tossed into a pond, would inundate heavily populated coastal areas. A computer simulation of an asteroid impact tsunami developed by scientists at the University of California, Santa Cruz, shows waves as high as 400 feet sweeping onto the Atlantic Coast of the United States.

    Depending on where the meteor strikes, we could potentially see New York City, Boston, Philadelphia, Baltimore, Washington D.C., Charleston, Miami and countless other major coastal cities all wiped out on a single day.

    Right now, 39 percent of all Americans live in a county that directly borders a shoreline.

    To say that we are vulnerable to a massive tsunami caused by a meteor impact would be a massive understatement.

    And scientists assure us that it will happen someday. In fact, I don’t know if you have noticed, but our area of space seems to have a lot more “traffic” in it these days. NASA tells us that there is nothing to be worried about, but others are concerned that something may be coming toward us or that we are moving toward something.

    Ultimately, we need to remember that we are essentially a speck of dust hurtling through a massive galaxy at incredibly high speeds, and our galaxy is only an extremely small part of an absolutely enormous and ever changing universe.

  • Mexican Drug Cartels Looting State-Owned Gas Pipelines For Black Market Sales

    A couple of weeks ago we highlighted the protests that had engulfed Mexico after the finance ministry announced plans to raise gasoline prices by 20.1% starting January 1st.  Amid the chaos, the country’s powerful Jalisco New Generation cartel threatened to to burn down gas stations as retribution for taking advantage of “the majority of the people who don’t make even a minimum wage.”

    But before readers blow this off as just another protest by an angry population which fails to grasp the “global deflationary collapse” while focusing on “fringe, outlier events”  – at least in the words of central bankers –  things suddenly got serious when none other than the country’s powerful Jalisco New Generation cartel has entered the fray, threatening to burn gas stations in response to the price hikes, according to Jalisco authorities cited by TeleSur.

     

    “They are speculating in order to obtain million dollar profits from the majority of the people who don’t make even a minimum wage, we have already realized that the (shortage) of fuel is because dealers don’t want to sell fuel unless they can do so at a profit, all of our people are now ready to start the mission,” the Mexican drug cartel stated in a WhatsApp message circulating in Jalisco.

     

    “The CJNG, in support of the working class, commits itself to making burn all the gasoline stations that to December 30 of the current year, at 10:00 p.m.” — before the price increases go into effect — “have not normalized the sale of fuel at the fair price,” the message said, according to the Mexican news outlet Aristegui Noticias.

    Gas Looting

     

    Alas, after the knee jerk reaction to riot subsided, which would have only resulted in gas prices soaring even higher anyway, Mexico’s drug cartels did what any clever black market entrepreneurial organization would do:  they decided to steal the gasoline and sell it themselves.  With a modest upfront capital investment of $5,000 – $8,000, the cartels have realized they can tap directly into state-owned gas pipelines and withdraw seemingly unlimited supplies of gasoline which they then sell along the highway at a discount to official government prices.  It’s a win-win situation whereby the drug cartels make 100% profit margins and citizens get “cheap” fuel.

    The black market is booming. Several states experienced gasoline shortages at the end of last year as more thieves tapped into state-owned Petróleos Mexicanos (Pemex) pipelines. The pilfered fuel was sold to drivers hoping to save money. Pipeline theft in 2015 increased sevenfold, to more than 5,500 taps, from just 710 in 2010. Pemex attributes the company’s 12-year slide in crude production in part to the growth in illegal taps.

     

    The drug cartels have turned to fuel theft as a side business worth hundreds of millions of dollars each year, and crime groups focused solely on gasoline robbery have sprung up, says Alejandro Schtulmann, president of Empra, a political-risk consulting firm in Mexico City. “You only need to invest $5,000 or $8,000 to buy some specific equipment, and the outcome of that is huge earnings.”

     

    Fuel theft creates a vicious cycle: The theft increases costs for Pemex and makes the official gasoline supply more scarce, contributing to higher prices for legal consumers. Theft amounts to about $1 billion a year, says Luis Miguel Labardini, an energy consultant at Marcos y Asociados and senior adviser to Pemex’s chief financial officer in the 1990s. “If Pemex were a public company, they would be in financial trouble just because of the theft of fuel,” he says. “It’s that bad.”

    Of course, there are some losers in all of this as Enrique Peña Nieto has basically become the least popular President in Mexico since one-party ruled ended in 2000.

    All this is creating headaches for Enrique Peña Nieto, whose popularity was already the lowest of any president since one-party rule ended in 2000. Peña Nieto is limited to a single term, and polls show potential candidates from his Institutional Revolutionary Party (PRI) trail populist opposition leader Andrés Manuel López Obrador in the race for the mid-2018 presidential election. López Obrador has made the jump in gasoline prices his latest rallying cry against the administration.

     

    “This is definitely going to have consequences for the PRI,” says Jorge Chabat, a political scientist at the Center for Economic Research and Teaching, a university based in Mexico City. “Frankly, I don’t see any way that they can win in 2018.”

    State-owned Pemex is also one of the losers with the company expected to lose about $1 billion to theft this year…but no one really pays taxes anyway so it shouldn’t be that big a deal.

  • Neil Cavuto Kicks CNN in the Ass for Ignoring Obama’s Attacks on Fox News Over the Past 8 Years

    Over the past 8 years, on a continuous basis, the liberal media has impugned the integrity of the only conservative news outlet in the country (Fox) — laughing and smirking while President Obama kicked them in the shins. Now that Trump refused a question from a reporter at CNN, which was punishment for publishing some very damaging information about him that wasn’t true or fact checked, CNN is crying ‘unfair’, causing their supporters to accuse Trump of (wait for it) FASCISM. There’s a double standard being pressed by here by CNN, wanting to be treated fairly while at the same time being shameful in their own conduct.

    The proverbial shoe is on the other foot, claimed Fox’s Neil Cavuto, and it probably isn’t a very comfy one. The Obama administration has gotten away with murder (extra Seth Rich) over the past 8 years and not once did CNN take him to task for it, instead opting to serve him and his ilk in a manner which is the antithesis of a free and independent press.

    They’ve ruined the fifth estate, which is why start up media organizations are booming across the internet.

     

    Content originally generated at iBankCoin.com

  • The Utter Stupidity Of The New Cold War

    Submitted by Gary Leupp via The Strategic Culture Foundation,

    It seems so strange, twenty-seven years after the fall of the Berlin Wall, to be living through a new Cold War with (as it happens, capitalist) Russia.

    The Russian president is attacked by the U.S. political class and media as they never attacked Soviet leaders; he is personally vilified as a corrupt, venal dictator, who arrests or assassinates political opponents and dissident journalists, and is hell-bent on the restoration of the USSR.

    (The latter claim rests largely on Vladimir Putin’s comment that the dissolution of the Soviet Union was a “catastrophe” and “tragedy” — which in many respects it was. The press chooses to ignore his comment that “Anyone who does not miss the Soviet Union has no heart, while anyone who wants to restore it has no brain.” It conflicts with the simple talking-point that Putin misses the imperial Russia of the tsars if not the commissars and, burning with resentment over the west’s triumph in the Cold War, plans to exact revenge through wars of aggression and territorial expansion.)

    The U.S. media following its State Department script depicts Russia as an expansionist power. That it can do so, so successfully, such that even rather progressive people—such as those appalled by Trump’s victory who feel inclined to blame it on an external force—believe it, is testimony to the lingering power and utility of the Cold War mindset.

    The military brass keep reminding us: We are up against an existential threat! One wants to say that this — obviously — makes no sense! Russia is twice the size of the U.S. with half its population. Its foreign bases can be counted on two hands. The U.S. has 800 or so bases abroad.

    Russia’s military budget is 14% of the U.S. figure. It does not claim to be the exceptional nation appointed by God to preserve “security” on its terms anywhere on the globe. Since the dissolution of the USSR in 1991, the U.S. has waged war (sometimes creating new client-states) in Bosnia (1994-5),  Serbia (1999), Afghanistan (2001- ), Iraq (2003- ), Libya (2011), and Syria (2014- ), while raining down drone strikes from Pakistan to Yemen to North Africa. These wars-based-on-lies have produced hundreds of thousands of civilian deaths, millions of refugees, and general ongoing catastrophe throughout the “Greater Middle East.” There is no understating their evil.

    The U.S. heads an expanding military alliance formed in 1949 to confront the Soviet Union and global communism in general. Its raison d’être has been dead for many years. Yet it has expanded from 16 to 28 members since 1999, and new members Estonia and Latvia share borders with Russia.

    (Imagine the Warsaw Pact expanding to include Mexico. But no, the Warsaw Pact of the USSR and six European allies was dissolved 26 years ago in the idealistic expectation that NATO would follow in a new era of cooperation and peace.)

    And this NATO alliance, in theory designed to defend the North Atlantic, was only first deployed after the long (and peaceful) first Cold War, in what had been neutral Yugoslavia (never a member of either the Warsaw Pact nor NATO), Afghanistan (over 3000 miles from the North Atlantic), and the North African country of Libya. Last summer NATO held its most massive military drills since the collapse of the Soviet Union, involving 31,000 troops in Poland, rehearsing war with Russia. (The German foreign minister Frank-Walter Steinmeier actually criticized this exercise as “warmongering.”)

    Alliance officials expressed outrage when Russia responded to the warmongering by placing a new S-400 surface-to-air missiles and nuclear-capable Iskander systems on its territory of Kaliningrad between Poland and Lithuania on the Baltic coast. But Russia has in fact been comparatively passive in a military sense during this period.

    In 1999, as NATO was about to occupy the Serbian province of Kosovo (soon to be proclaimed an independent country, in violation of international law), nearby Russian peacekeepers raced to the airport in Pristina, Kosovo, to secure it an ensure a Russian role in the Serbiam province’s  future. It was a bold move that could have provoked a NATO-Russian clash. But the British officer on the ground wisely refused an order from Gen. Wesley Clark to block the Russian move, declaring he would not start World War III for Gen. Clark.

    This, recall, was after Bill Clinton’s secretary of state, Madeleine Albright (remember, the Hillary shill who said there’s a special place in hell reserved for women who don’t vote for women) presented to the Russian and Serbian negotiators at Rambouillet a plan for NATO occupation of not just Kosovo but all Serbia. It was a ridiculous demand, rejected by the Serbs and Russians, but depicted by unofficial State Department spokesperson and warmonger Christiane Amanpour as the “will of the international community.” As though Russia was not a member of the international community!

    This Pristina airport operation was largely a symbolic challenge to U.S. hegemony over the former Yugoslavia, a statement of protest that should have been taken seriously at the time.

    In any case, the new Russian leader Putin was gracious after the 9/11 attacks in 2001, even offering NATO a military  transport corridor through Russia to Afghanistan (closed in 2015). He was thanked by George W. Bush with the expansion of NATO by seven more members in 2004. (The U.S. press made light of this extraordinary geopolitical development; it saw and continues to see the expansion of NATO as no more problematic than the expansion of the UN or the European Union.) Then in April 2008 NATO announced that Georgia would be among the next members accepted into the alliance.

    Soon the crazy Georgian president Mikhail Saakashvili, emboldened by the promise of near-term membership, provoked a war with the breakaway republic of South Ossetia, which had never accepted inclusion of the new Georgian state established upon the dissolution of the Georgian Soviet Socialist Republic in 1991. The Ossetians, fearing resurgent Georgian nationalism, had sought union with the Russian Federation. So had the people of Abkhazia.

    The two “frozen conflicts,” between the Georgian state and these peoples, had been frozen due to the deployment of Russian and Georgian peacekeepers. Russia had not recognized these regions as independent states nor agreed to their inclusion in the Russian Federation. But when Russian soldiers died in the Georgian attack ion August, Russia responded with a brief punishing invasion. It then recognized of the two new states (six months after the U.S. recognized Kosovo).

    (Saakashvili, in case you’re interested, was voted out of power, disgraced, accused of economic crimes, and deprived of his Georgian citizenship. After a brief stint at the Fletcher School of International Law and Diplomacy at Tufts University—of which I as a Tufts faculty member feel deeply ashamed—he was appointed as governor of Odessa in Ukraine by the pro-NATO regime empowered by the U.S.-backed coup of February 22, 2014.)

    Sen. John McCain proclaimed in 2008: “We are all Georgians now,” and advocated U.S. military aid to the Georgian regime. An advocate of war as a rule, McCain then became a big proponent of regime change in Ukraine to allow for that country’s entry into NATO. Neocons in the State Department including most importantly McCain buddy Victoria Nuland, boasted of spending $ 5 billion in support of “the Ukrainian people’s European aspirations” (meaning: the desire of many Ukrainians in the western part of the country to join the European Union — risking, although they perhaps do not realize it, a reduction in their standard of living under a Greek-style austerity program — to be followed by NATO membership, tightening the military noose around Russia).

    The Ukrainian president opted out in favor of a generous Russian aid package. That decision — to deny these “European aspirations” — was used to justify the coup.

    But look at it from a Russian point of view. Just look at this map, of the expanding NATO alliance, and imagine it spreading to include that vast country (the largest in Europe, actually) between Russia to the east and Poland to the west, bordering the Black Sea to the south. The NATO countries at present are shown in dark blue, Ukraine and Georgia in green. Imagine those countries’ inclusion.

    And imagine NATO demanding that Russia vacate its Sevastopol naval facilities, which have been Russian since 1783, turning them over to the (to repeat: anti-Russian) alliance. How can anyone understand the situation in Ukraine without grasping this basic history?

    The Russians denounced the coup against President Viktor Yanukovych (democratically elected—if it matters—in 2010), which was abetted by neo-fascists and marked from the outset by an ugly Russophobic character encouraged by the U.S. State Department. The majority population in the east of the country, inhabited by Russian-speaking ethnic Russians and not even part of Ukraine until 1917, also denounced the coup and refused to accept the unconstitutional regime that assumed power after Feb. 22.

    When such people rejected the new government, and declared their autonomy, the Ukrainian army was sent in to repress them but failed, embarrassingly, when the troops confronted by angry babushkas turned back. The regime since has relied on the neo-fascist Azov Battalion to harass secessionists in what has become a new “frozen conflict.”

    Russia has no doubt assisted the secessionists while refusing to annex Ukrainian territory, urging a federal system for the country to be negotiated by the parties. Russian families straddle the Russian-Ukrainian border. There are many Afghan War veterans in both countries. The Soviet munitions industry integrated Russian and Ukrainian elements. One must assume there are more than enough Russians angry about such atrocities as the May 2014 killing of 42 ethnic Russian government opponents in Odessa to bolster the Donbas volunteers.

    But there is little evidence (apart from a handful of reports about convoys of dozens of “unmarked military vehicles” from Russia in late 2014) for a Russian “invasion” of Ukraine. And the annexation of Crimea (meaning, its restoration to its 1954 status as Russian territory) following a credible referendum did not require any “invasion” since there were already 38,000 Russian troops stationed there. All they had to do was to secure government buildings, and give Ukrainian soldiers the option of leaving or joining the Russian military. (A lot of Ukrainian soldiers opted to stay and accept Russian citizenship.)

    Still, these two incidents — the brief 2008 war in Georgia, and Moscow’s (measured) response to the Ukrainian coup since 2014 — have been presented as evidence of a general project to disrupt the world order by military expansion, requiring a firm U.S. response. The entirety of the cable news anchor class embraces this narrative.

    But they are blind fools. Who has in this young century disrupted world order more than the U.S., wrecking whole countries, slaughtering hundreds of thousands of innocents, provoking more outrage through grotesquely documented torture, generating new terror groups, and flooding Europe with refugees who include some determined to sow chaos and terror in European cities? How can any rational person with any awareness of history since 1991 conclude that Russia is the aggressive party?

    And yet, this is the conventional wisdom. I doubt you can get a TV anchor job if you question it. The teleprompter will refer routinely to Putin’s aggression and Russian expansion and the need for any mature presidential candidate to respect the time-honored tradition of supporting NATO no matter what. And now the anchor is expected to repeat that all 17 U.S. intelligence services have concluded that Vladimir Putin interfered in the U.S. presidential election.

    Since there is zero evidence for this, one must conclude that the Democratic losers dipped into the reliable grab bag of scapegoats and posited that Russia and Putin in particular must have hacked the DNC in order to — through the revelation of primary sources of unquestionable validity, revealing the DNC’s determination to make Clinton president, while sabotaging Sanders and promoting (through their media surrogates)  Donald Trump as the Republican candidate — undermine Clinton’s legitimacy.

    All kinds of liberals, including Sanders’ best surrogates like Nina Turner, are totally on board the Putin vilification campaign. It is sad and disturbing that so many progressive people are so willing to jump on the new Cold War bandwagon. It is as though they have learned nothing from history but are positively eager, in their fear and rage, to relive the McCarthy era.

    But the bottom line is: U.S. Russophobia does not rest on reason, judgment, knowledge of recent history and the ability to make rational comparisons. It rests on religious-like assumptions of “American exceptionalism” and in particular the right of the U.S. to expand militarily at Russia’s expense — as an obvious good in itself, rather than a distinct, obvious evil threatening World War III.

    The hawks in Congress — bipartisan, amoral, ignorant, knee-jerk Israel apologists, opportunist scum — are determined to dissuade the president-elect (bile rises in my throat as I use that term, but it’s true that he’s that, technically) from any significant rapprochement with Russia. (Heavens, they must be horrified at the possibility that Trump follows Kissinger’s reported advice and recognizes the Russian annexation of Crimea!) They want to so embarrass him with the charge of being (as Hillary accused him of being during the campaign) Putin’s “puppet” that he backs of from his vague promise to “get along” with Russia.

    They don’t want to get along with Russia. They want more NATO expansion, more confrontation. They are furious with Russian-Syrian victories over U.S-backed, al-Qaeda-led forces in Syria, especially the liberation of Aleppo that the U.S. media (1) does not cover having no reporters on the ground, and little interest since events in Syria so powerfully challenge the State Department’s talking points that shape U.S. reporting, (2) misreports systematically, as the tragic triumph of the evil, Assad’s victory over an imaginary heroic opposition, and (3) sees the strengthening of the position of the Syrian stats as an indication of Russia’s reemergence as a superpower. (This they they cannot accept, as virtually a matter of religious conviction; the U.S. in official doctrine must maintain “full spectrum dominance” over the world and prohibit the emergence of any possible competitor, forever.)

    * * *

    The first Cold War was based on the western capitalists’ fear of socialist expansion. It was based on the understanding that the USSR had defeated the Nazis, had extraordinary prestige in the world, and was the center for a time of the expanding global communist movement. It was based on the fear that more and more countries would achieve independence from western imperialism, denying investors their rights to dominate world markets. It had an ideological content. This one does not. Russia and the U.S. are equally committed to capitalism and neoliberal ideology. Their conflict is of the same nature as the U.S. conflict with Germany in the early 20th century. The Kaiser’s Germany was at least as “democratic” as the U.S.; the system was not the issue. It was just jockeying for power, and as it happened, the U.S. intervening in World War I belatedly, after everybody else was exhausted, cleaned up. In World War II in Europe, the U.S. having hesitated to invade the continent despite repeated Soviet appeals to do so, responded to the fall of Berlin to Soviet forces by rushing token forces to the city to claim joint credit.

    And then it wound up, after the war, establishing its hegemony over most of Europe — much, much more of Europe than became the Soviet-dominated zone, which has since with the Warsaw Pact evaporated.  Russia is a truncated, weakened version of its former self. It is not threatening the U.S. in any of the ways the U.S. is threatening itself. It is not expanding a military alliance. It is not holding huge military exercises on the U.S. border. It is not destroying the Middle East through regime-change efforts justified to the American people by sheer misinformation. In September 2015 Putin asked the U.S., at the United Nations: “Do you realize what you’ve done?”

    Unfortunately the people of this country are not educated, by their schools, press or even their favorite websites to realize what has been done, how truly horrible it is, and how based it all is on lies. Fake news is the order of the day.

    Up is down, black is white, Russia is the aggressor, the U.S. is the victim. The new president must be a team-player, and for God’s sake, understand that Putin is today’s Hitler, and if Trump wants to get along with him, he will have to become a team-player embracing this most basic of political truths in this particular imperialist country: Russia (with its nukes, which are equally matched with the U.S. stockpile) is the enemy, whose every action must be skewed to inflame anti-Russian feeling, as the normative default sentiment towards this NATO-encircled, sanction-ridden, non-threatening nation, under what seems by comparison a cautious, rational leadership?

    * * *

    CNN’s horrible “chief national correspondent” John King (former husband of equally horrid Dana Bash, CNN’s “chief political correspondent”) just posed the question, with an air of aggressive irritation: “Who does Donald Trump respect more, the U.S. intelligence agencies, or the guy who started Wikileaks [Assange]?”

    It’s a demand for the Trump camp to buy the Russian blame game, or get smeared as a fellow-traveler with international whistle-blowers keen on exposing the multiple crimes of U.S. imperialism.

    So the real question is: Will Trump play ball, and credit the “intelligence community” that generates “intelligence products” on demand, or brush aside the war hawks’ drive for a showdown with Putin’s Russia? Will the second Cold War peter out coolly, or culminate in the conflagration that “Mutually Assured Destruction” (MAD) was supposed to render impossible?

    The latter would be utterly stupid. But stupid people — or wise people, cynically exploiting others’ stupidity — are shaping opinion every day, and have been since the first Cold War, based like this one on innumerable lies.

  • New York Times Admits "Higher Minimum Wage May Have Losers"

    The New York Times would like for you to know that, after attending the annual meeting of the American Economic Association where they sat in on multiple presentations on the economic impacts of minimum wage, they can now confirm what most of us have known for most of our adult lives, namely that basic economic supply/demand models actually work.

    Apparently, the NYT was pleasantly surprised when the first presentation suggested that higher minimum wage didn’t actually result in job losses, just lower hours, but then quickly realized it’s basically the same thing.

    At first glance, the findings were consistent with the growing body of work on the minimum wage: While the workers saw their wages rise, there was little decline in hiring. But other results suggested that the minimum wage was having large effects. Most important, the hours a given worker spent on a given job fell substantially for jobs that typically pay a low wage — say, answering customer emails.

     

    Mr. Horton concluded that when forced to pay more in wages, many employers were hiring more productive workers, so that the overall amount they spent on each job changed far less than the minimum-wage increase would have suggested. The more productive workers appeared to finish similar work more quickly.

    Unfortunately, the second study left a bit less to the imagination.  After studying “tens of thousands of restaurants in the San Francisco area,” researchers
    Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research found that many lower rated restaurants have a unique way of dealing with minimum wage hikes: they simply go out of business.

    A second study presented at the conference suggests another way that employers may respond to a rising minimum wage: simply going out of business.

     

    The husband-and-wife research team of Michael Luca of Harvard Business School and Dara Lee Luca of Mathematica Policy Research identified the ratings of tens of thousands of restaurants in the San Francisco area on the website Yelp and found that many poorly rated restaurants tend to go out of business after a minimum-wage increase takes effect.

    Finally, confirming what we’ve noted multiple times (and basic common sense for that matter), Zane Tankel, an owner of several dozen Applebee’s restaurants in the New York City area, informed the startled New York Times that higher minimum wage simply improves the ROIC profile of capital investments thereby speeding up employee replacement projects….shocking.

    Zane Tankel, chief executive and equity partner in a group that owns and operates several dozen Applebee’s restaurants in the New York City area, said replacing low-skilled workers with higher-skilled ones after the state’s recent minimum-wage increases is “not something that we try to do.”

     

    Mr. Tankel argued that differences in the productivity of low-level workers in his industry are not very big. “It’s just a lot more money for the exact same job description,” he said. He is accelerating automation in his restaurants, including tablet devices for ordering certain items and payment, to offset the costs of the higher minimum.

    With that, here are some charts illustrating where the most minimum wage workers will lose their jobs over the coming years:

    Min Wage

    Min Wage

     

    And while California and Washington DC have already won their “Fight for $15”, here’s where all the other states stand in their efforts to crush low-income workers.

    Min Wage

  • China Daily: Tillerson's "Disastrous" Actions Would Set The Course For A "Devastating Confrontation"

    We were surprised by how contained China was this morning after yesterday’s confirmation hearing of Rex Tillerson, in which the former Exxon CEO said that a failure to respond to China had allowed it to “keep pushing the envelope” in the South China Sea and added that “we’re going to have to send China a clear signal that first the island-building stops and second your access to those islands is also not going to be allowed” and that putting military assets on those islands was “akin to Russia’s taking Crimea” from Ukraine.”

    Traditionally such a direct threat would be i) perceived as very undiplomatic and ii) prompt an immediate, and angry rebuke from Beijing, with China immediately shifting to the offensive.

    “This is the sort of off-the-cuff remark akin to a tweet that pours fuel on the fire and maybe makes things worse,” Malcolm Davis, a senior analyst at the Australian Strategic Policy Institute in Canberra told Bloomberg. “Short of going to war with China, there is nothing the Americans can do.”

    But not today: during his press conference earlier today, Foreign Ministry spokesman Lu Kang could barely muster the will to sound defensive, saying China has been acting within the limits of its sovereignty. “Like the U.S., China has the right within its own territory to carry out normal activities,” he said at a regular briefing in Beijing. When asked repeatedly about Tillerson’s comments on blocking access to islands, China’s foreign ministry spokesman said he couldn’t make any guesses as to what Tillerson was referring to and would not answer hypothetical questions, Reuters reported.

    As it turns out, China may not have had time to digest what Tillerson said. After all his South China sea remark was toward the end of his nearly all day long hearing, and so many local media outlets may have simply missed it. However, they caught up today, and first China Daily, then its nationalist tabloid, the Global Times took turns to first mock, then attack Tillerson.

    Here is the gist of the China Daily op-ed published earlier today: according to the Chinese daily mouthpiece, not only were Tillerson’s views “divergent from, even contrary to, those of Trump on some critical issues. He openly conceded he is yet to have a serious, in-depth discussion with Trump on foreign policy imperatives. These boil down to one simple point – his remarks at the Wednesday hearing, sensational as they were, turned out to be of little reference value except for judging his personal orientations.“

    Yet while China realizes that Tillerson’s bluster was intended for a specific audience, that does not make it any happier:

    The backlash that has ensued is understandable. It is certainly no small matter for a man intended to be the US diplomat in chief to display such undisguised animosity toward China.  Tillerson labeled China’s reclamation projects in the South China Sea as “an illegal taking of disputed areas without regard for international norms,” in obvious disregard of the essential truth that all those activities took place well within the country’s persistent, historical territorial claims.

     

    Blaming the “extremely worrisome” state of affairs in the South China Sea on an “inadequate US response”, the US secretary of state nominee even claimed China’s access to those islands should “not to be allowed”. Which sounded intimidating; though he stopped short of elaborating how to achieve it. And like Trump, he blamed Beijing for “not being a reliable partner” in dealing with the Democratic People’s Republic of Korea.

    And then, the not so subtle threats followed:

    Such remarks are not worth taking seriously because they are a mish-mash of naivety, shortsightedness, worn-out prejudices, and unrealistic political fantasies. Should he act on them in the real world, it would be disastrous.

     

    As many have observed, it would set a course for devastating confrontation between China and the US. After all, how can the US deny China access to its own territories without inviting the latter’s legitimate, defensive responses?

    Finally, the mocking of Tillerson as a clueless former company exec who does not have the faintest understanding of diplomacy: “Tillerson wanted a reality-based China policy that is “based on what we see and not based on what we hope”. But what he presented was based more on what prejudice and arms-spurred self-righteousness make him believe and hope than on real-world realities. What happened on Wednesday shows that if and when confirmed, Rex Tillerson needs to first acquaint himself with the ABCs of China-US relations and diplomacy at large.“

    The Global Times approach was almost verbatim. First, the justification of Tillerson’s “bluster”:

    It is suspected that he merely wanted to curry favor from senators and increase his chances of being confirmed by intentionally showing a tough stance toward China.

     

    Tillerson did not give details of how he would achieve his self-proclaimed goals. Nonetheless, he also mentioned that Chinese and American economic interests are deeply intertwined and that “China has been a valuable ally in curtailing elements of radical Islam.” He noted that “We should not let disagreements over other issues exclude areas for productive partnership.”

    Motives aside, the GT then explained that China no longer views itself as America’s subordinate:

    China has enough determination and strength to make sure that his rabble rousing will not succeed. Unless Washington plans to wage a large-scale war in the South China Sea, any other approaches to prevent Chinese access to the islands will be foolish. The US has no absolute power to dominate the South China Sea.

    Following this, just like in the case of China Daily, there was the mocking:

    Tillerson had better bone up on nuclear power strategies if he wants to force a big nuclear power to withdraw from its own territories. Probably he just has oil prices and currency rates in his mind as former ExxonMobil CEO.

    Next, the not so thinly veiled threat – again – aimed not so much at Tillerson but at Trump:

    As Trump has yet to be sworn in, China has shown restraint whenever his team members expressed radical views. But the US should not be misled into thinking that Beijing will be fearful of their threats.

    How does it all end according to China? Unless Trump’s diplomatic team changes course, the Times said “the two sides better prepare for a military clash.”

    Tillerson’s statements regarding the islands in the South China Sea are far from professional. If Trump’s diplomatic team shapes future Sino-US ties as it is doing now, the two sides had better prepare for a military clash. South China Sea countries will accelerate their negotiations on a Code of Conduct. They have the ability to solve divergences by themselves without US interference.

    And the conclusion:

    Just as the Philippines and Vietnam are trying to warm their ties with China, Tillerson’s words cannot be more irritating.  It is hoped that Tillerson will desire a productive partnership with China more and his harsh words are just coaxing the Senate Foreign Relations Committee. But no matter what, China will always respond to various US diplomatic maneuvers.

    As a reminder, all this has already happened and Trump isn’t president yet. We eagerly look forward to the president-elect’s next steps vis-a-vis an increasingly angry CHina and vice versa.

  • S&P Downgrades City Of Dallas On "Continued Deterioration" Of Police Pension

    As the City of Dallas continues to work with the Dallas Police and Fire Pension (DPFP) board on solutions to help close the pension’s massive $4 billion funding hole, Standard & Poor’s has finally decided that the “continued deterioration in the funded status” of the fund merits a downgrade.  As such, S&P has downgraded the city’s general obligation bonds to “AA-” from “AA” and placed them on “negative watch.”  Per the Dallas Business Journal:

    “The downgrade reflects our view that despite the city’s broad and diverse economy, which continues to grow, stable financial performance, and very strong management practices, expected continued deterioration in the funded status of the city’s police and fire pension system coupled with growing carrying costs for debt, pension, and other post-employment benefit obligations is significant and negatively affects Dallas’ creditworthiness,” S&P Global Ratings credit analyst Andy Hobbs said in a statement.

     

    The police and fire pension system could go insolvent in the next 10 years because of a funding gap. The financial troubles, along with a multi-billion-dollar lawsuit between the city and emergency works, could put Dallas on a path to bankruptcy.

    The move by S&P comes over a month after Moody’s downgraded Dallas’ credit rating, for the second time in recent months, to A1, which is a notch below S&P’s new rating.  Oddly, as we pointed out yesterday, S&P also seems to be somewhat delayed in their rating downgrade of the City of Chicago (see “Chicago Mayor Emanuel Pushes Moody’s To Rescind Junk Rating Ahead Of $1.2 Billion New Issue“).  That said, we’re sure it has nothing to do with keeping the city’s G.O. rating above investment grade just long enough to get that $1.2 billion bond deal done next week so that Rahm Emanuel can continue his ponzi scheme with taxpayer money. 

    Of course, the downgrades have come as little surprise to Dallas Mayor Mike Rawlings who, for months, has been arguing that the “run on the pension” has brought the DPFP to the “verge of collapse.”  Responding to the downgrade, even Dallas CFO Elizabeth Reich implied that S&P was a little late to the ball game saying their “actions today are not a surprise” and that the “pension is a significant risk to the fiscal health of the City.”

    “S&P’s actions today are not a surprise,” Dallas Chief Financial Officer Elizabeth Reich said in a statement. “The more the rating agencies learn about the crisis facing Dallas as a result of the police and fire pension, the more they understand what the City has been saying for some time – the pension is a significant risk to the fiscal health of the City.”

    As we noted last week, this most recent downgrade for Dallas comes after the City Council floated a proposal to inject $1 billion of incremental taxpayer funding into the DPFP, over the course of 30 years, if retirees would agree to a $1 billion “clawback” of what city officials referred to a ill-gotten interest guarantees (see “City Of Dallas Looks To “Clawback” Ill-Gotten Pension Gains From Police“).

    Unfortunately, the downgrade from S&P came a day before the pension board is (1) scheduled to meet with Bank of America about restructuring or extending roughly $130 million in outstanding debt and (2) due to decide whether to lift its ban on large, lump-sum payments to retirees. 

    The pension is in danger of falling into insolvency in the next 10 years because of an estimated $3.3 billion funding gap. The problem, along with a multi-billion-dollar lawsuit over emergency worker back pay, could send the city spiraling into bankruptcy and threaten its blossoming economy. The state is launching a criminal investigation into the previous administration’s handling of the pension’s finances.

     

    “We have been working with Bank of America on the terms of the loan and possibly restructuring and extending the term,” a spokesman for the pension board said in an email to the Dallas Business Journal. “Nothing is finalized at this point.”

    But we’re just everything is fine, Bank Of America, so please go ahead and grant that loan extension for an extra 10 bps of yield.

    * * *

    For those that haven’t followed this story as closely, here is a recap we posted last week.

    Almost exactly one month after taking the unprecedented step of suspending withdrawals from the Dallas Police and Fire Pension (DPFP), the Dallas city council is looking to “clawback” what it views as ill-gotten interest payments made to pensioners to the tune of roughly $1 billion.

    Of course, we have followed the epic meltdown of the DPFP closely over the past several months after a series of shady real estate deals brought the fund to, in the words of Dallas Mayor Mike Rawlings, “the verge of collapse” and resulted in an FBI raid of one of the funds largest real estate investors (see “Dallas Cops’ Pension Fund Nears Insolvency In Wake Of Shady Real Estate Deals, FBI Raid“).  The discovery of the failed real estate deals led to a “run on the bank” as scared pensioners looked to withdraw as much as possible before the whole ponzi scheme collapsed (see “After A “Run On The Pension Fund” Dallas Mayor Demands Halt Of Withdrawals“).  All of which culminated with the unprecedented decision last month to suspend withdrawals (see “In Unprecedented Move, Dallas Pension System Suspends Withdrawals“) after nearly $500mm was removed from police accounts.

    Now, according to a local ABC affiliate, the Dallas city council is frantically working with the DPFP board to close a $4 billion funding gap.  While the city has agreed to throw an incremental $1 billion of taxpayer money at the problem over the next 30 years, that additional funding comes with some strings attached, which includes a $1 billion “clawback” of what the city views as ill-gotten gains from Police DROP accounts.  The proposed “clawbacks” would come in the form of reduced future distributions for pensioners.

    For those who haven’t followed this story as closely, DROP, which was created in the early 90’s, allowed police and firefighters in Dallas to retire while still on the job. Their monthly pension checks were then diverted into DROP accounts, which were guaranteed an 8-10% return regardless of how the overall fund performed.  Unfortunately for DPFP pensioners, the Dallas City Council now views those guaranteed returns as an effort to defraud Dallas taxpayers of billions…we would tend to agree.

    The city has agreed to put in an additional billion dollars over 30 years, but they’re proposing a series of bitter pills to make up the rest of the nearly $4 billion shortfall.

     

    The bitterest pill: A proposal to take back all of the interest police and firefighters earned on Deferred Option Retirement accounts, or DROP. That would amount to an additional billion dollars saved.

     

    The city is calling it an “equity adjustment.” Retirees call it an illegal “claw back.”

     

    Whatever you want to call it, it’s outlined in a draft legislation being hammered out by the city and pension fund leaders. Pension fund representatives and the city have been meeting almost daily to try to come to an agreement on proposed legislation that they can take to the state capital to fix the failing fund.

    Of course, anyone with half a brain probably should have realized that this ponzi on steroids was doomed to fail from the start.  But, better late than never we suppose. 

    To add insult to injury, for Dallas taxpayers at least, the City Council also notes that the DPFP’s artificially high annual cost of living adjustments have resulted in pension checks that are 20% higher than they would have been had they been tied to actual inflation levels instead. 

    News 8 obtained a copy of the legislation which says accounts would be “adjusted to zero percent of interest.”

     

    “It’s very tough but the city wants to protect the monthly benefit,” Kleinman said. “It’s a restatement of their accounts.”

     

    The city is also seeking to “equity adjustment” on cost of living increases. The city says that pension checks are about 20 percent higher than they would have been if increases had been tied to inflation.

     

    The city’s proposing to freeze cost of living increases until it catches up to the inflation index.

     

    DROP and the cost of living increases account for about half of the fund’s liability, the city says.

     

    For those retirees who have already taken the money out of DROP accounts, they’d garnish their future pension checks to recoup excess interest. Worried retirees have withdrawn in excess of $500 million from DROP accounts in recent months.

    Meanwhile, all of these discussions have Dallas’ police predictably upset.

    “We used the rules they gave us now all of the sudden they’re going to go back on the rules and say hey you don’t get any of that,” said Charles Hale, a retired police officer. “That’s not fair.”

     

    Retirees promised they’d be suing if anybody tried to take back money they feel they’ve earned.

     

    “It’s acting like it was an underhanded Ponzi scheme that we pulled,” said Joe Dunn, a retired police officer. “It’s not fair.”

    Frankly, we too are shocked at the audacity of the Dallas City Council to suggest that public employees be forced to be compensated in a way somewhat more akin to private employees.  It’s just outrageous.

     

  • Afghan "Ghost Soldiers" Are Costing US Taxpayers Hundreds Of Millions Of Dollars Annually

    Submitted by Jason Ditz via AntiWar.com,

    Special Inspector General for Afghanistan Reconstruction (SIGAR) John Sopko is once again warning about the long-standing problems of corruption in Afghanistan, and the amount of US “reconstruction aid” disappearing down black holes over the course of the years. As always, the discussion came around to “ghost soldiers.”

    Ghost soldiers are a phenomenon in which Afghan military commanders fill their ranks with fictional names and just keep the salaries, which since the salaries are paid pretty much exclusively by NATO and overwhelmingly by the US, has been a known tactic that the Afghan government has done nothing to prevent.

    Sopko warned that the “ghost soldier” problem has expanded to include fictional police, teachers, and other government officials, and that all told the US taxpayers are paying the salaries of “tens of thousands” of Afghans who don’t actually exist, and will likely be doing so for years, potentially decades to come. Though exact figures are impossible to know, SIGAR said some $300 million in salaries are paid to “unverified” employees.

    Individual Afghan government employee salaries are pretty small, particularly for military recruits, which has been a big reason the nation has struggled to fill the ranks with actual people. That commanders can pocket the difference just adds to the incentive to make up names and “pay” them.

    This is a big reason why the Afghan military has struggled so mightily in fights with the Taliban as well, as their statistics on how many troops they have defending any given checkpoint or important city are wildly inaccurate, and they can find that the Taliban forces they thought they handily outnumbered are actually in a position to seize territory.

    SIGAR found that corruption cut across all aspects of the reconstruction effort, jeopardizing progress made in security, rule of law, governance, and economic growth. The report concluded that failure to effectively address the problem meant U.S. reconstruction programs, at best, would continue to be subverted by systemic corruption and, at worst, would fail.

    The report identified five main findings:

    1. Corruption undermined the U.S. mission in Afghanistan by fueling grievances against the Afghan government and channeling material support to the insurgency.
    2. The United States contributed to the growth of corruption by injecting tens of billions of dollars into the Afghan economy, using flawed oversight and contracting practices, and partnering with malign powerbrokers.
    3. The U.S. government was slow to recognize the magnitude of the problem, the role of corrupt patronage networks, the ways in which corruption threatened core U.S. goals, and that certain U.S. policies and practices exacerbated the problem.
    4. Even when the United States acknowledged corruption as a strategic threat, security and political goals consistently trumped strong anticorruption actions.
    5. Where the United States sought to combat corruption, its efforts saw only limited success in the absence of sustained Afghan and U.S. political commitment.

    *  *  *

    Full SIGAR Report below…

  • Israeli Jets Bomb Damascus Military Airport; Syria Vows It Will Respond To "Flagrant Attack"

    Just as the Syrian proxy war showed some hopeful signs of finally dying down, the Syrian army command said on Friday that Israeli jets have bombed the Mezzeh military airport west of Damascus, accusing Tel Aviv of supporting terrorism, and warned Tel Aviv of repercussions of what it called a “flagrant” attack. Syrian state TV quoted the army as saying several rockets were fired from an area near Lake Tiberias in northern Israel just after midnight which landed in the compound of the airport, a major facility for elite Republican Guards and special forces. The airport was rocked by multiple explosions, some of which were captured by social media.

    “Syrian army command and armed forces warn Israel of the repercussions of the flagrant attack and stresses its continued fight against (this) terrorism and amputate the arms of the perpetrators,” the army command said in a statement.

    The statement did not disclose if there were any casualties, but said the rockets caused a fire. Earlier, state television said several major explosions hit Mezzeh military airport compound near Damascus and ambulances were rushed to the area, without giving details.

    The airport southwest of the capital is a major strategic air base used mainly by Syrian elite Republican Guards and had been a base used to fire rockets at former rebel-held areas in the suburbs of Damascus. State television did not give any further details.

    Footage from the scene with heavy fire and the sounds of explosions has surfaced on social media. Multiple reports from journalists and activists on the ground described the bombing, with the opposition also reporting there were rockets fired.

    “Rockets strike at Mezzeh Military airport in Damascus minutes ago,” tweeted Hadi al-Bahra, former president of the National Coalition of Syrian Revolution and Opposition Forces.

    In the past, Israel has targeted positions of Lebanon’s Hezbollah group inside Syria where the Iranian-backed group is heavily involved in fighting alongside the Syrian army. According to Israeli breaking, the airport was bombed because it was a “suspected holding ammunition depots for Hezbollah. “

    Israeli defence officials have voiced concern that Hizbollah’s experience in the Syrian civil war, where it has played a significant role and recently helped the Syrian army regain the eastern sector of the city of Aleppo, has strengthened it.

    Rebels operating in the area have said Hizbollah’s major arms supply route into Damascus from the Lebanese border has been targeted on several occasions in recent years by air strikes. This has included strikes on convoys of weapons and warehouses.

    This is the second time in two months the Israeli Defense Forces have being accused by Syria of targeting Syrian positions from Israeli territory.  On December 7, SANA reported that “several surface-to-surface missiles” were launched by the IDF from the Golan Heights. At the time, the source in the Syrian armed forces slammed the attack as a “desperate attempt” by Israel to endorse terrorists.   

    Rebels operating in the area have said Hezbollah’s major arms supply route into Damascus from the Lebanese border has been targeted on several occasions in recent years by air strikes. This has included strikes on convoys of weapons and warehouses. Damascus airport was also hit by air strikes in 2013. Tel Aviv neither confirms nor denies involvement in striking targets inside Syria. Damascus has also been tightlipped about previous strikes.

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Jan 12

Today’s News 12th January 2017

  • How Globalists Predict Your Behavior

    Submitted by Brandon Smith via Alt-Market.com,

    The globalists seem to have an overarching obsession with data collection. As we have seen with revelations from multiple government whistle-blowers, the establishment spends most of its time, energy and manpower collecting information not just on known threats to their supremacy, but information on EVERYONE through FISA-based surveillance protocols. This is because the establishment sees every individual as a potential threat.

    Thus, the system, without warrant, is programmed to collate data from everywhere, not necessarily to be analyzed on the spot, but to be analyzed later in the event that a specific person rises to a level that poses legitimate harm to the globalist power structure.

    There was a time not long ago when this notion was considered “conspiracy theory” by the mainstream, but with multiple exposures from Wikileaks to Edward Snowden it is now common knowledge that the government (and the globalists) spy on us en masse. However, I do not think that many people understand the greater implications or uses for this full spectrum surveillance. This is why you sometimes hear the argument that “if you aren’t doing anything wrong, then you have nothing to worry about…”

    The truth is, mass surveillance is not done merely for the sake of surveillance, and it is certainly not undertaken for the sake of public safety. There is a greater purpose, and it is something the elites crave dearly — the purpose of total and PREDICTIVE information awareness.

    The establishment is not just hoping to observe our present behavior in detail. No, they hope to use today’s data to predict our behavior tomorrow, and at this very moment, they are extremely close to achieving their goal.

    Lets examine some of the methods they use in the pursuit of this goal…

    Internet Macro-Analytics

    Web analytics are used by almost everyone with a website of their own, and Google is a primary source for this data. Through analytics you can easily measure web traffic for a particular site, but also where in the world the traffic is coming from, how long these people are staying on your site, how many of them are new visitors versus regular visitors, how your traffic has increased or decreased over a span of months or years, etc, etc. That said analytics are not just useful to someone with a web-based business or a blog, they are very useful to the establishment. Why? Because they allow the establishment to view the behavior of most of a population at any given time.

    In fact, Eric Schmidt, the former CEO of Google, is notorious for opening his big mouth and letting slip some of the finer intricacies of the establishment’s information war. In 2010 in a videotaped interview with The Atlantic, Schmidt said this:

    “With your permission, you give us more information about you, about your friends, and we can improve the quality of our searches. We don’t need you to type at all. We know where you are. We know where you’ve been. We can more or less know what you’re thinking about.”

    Now, this statement from Schmidt is not entirely true. The use of analytics to know the thought processes of the individual person is nonsensical because, first, individuals can be highly erratic and unpredictable due to emotion, intuition and abrupt changes in psychological dynamic. The elites do not know what you are thinking, yet.

    That said, they do have the tools at their disposal to use what I would call “macro-analytics,” a widely encompassing view of internet traffic, to predict GROUP behavior.

    The ability to track the web habits of an entire population allows the elites to see shifts in social consciousness in real time. For example, I believe this very method was used to predict the shift of the U.S. population and parts of Europe towards a more conservative or “populist” ideal in 2016. Because of this the elites have acted accordingly.

    Instead of attempting to stop the social changes of the group, they have allowed conservative and sovereignty movements to attain a certain level of political power, while also setting those same movements up for epic failure in the next couple of years. I also predicted this move by the elites in advance before the Brexit Referendum (I will go into more detail on this in my next article).

    The point is, the elites do not necessarily need to spend the incredible amount of energy required to spy on each individual. When people form into ideological groups their behavior becomes much easier to predict. Through macro-analytics, the establishment can simply watch the traffic numbers of conservative and liberty sites to see how quickly a population is adopting that mindset, or abandoning it. They can read these social movements in advance and move to intercept or co-opt.

    Even if everyone in a given population found a way to use the web anonymously, this would do nothing to prevent the establishment from collecting wider analytic data and traffic data.

    The best strategy for defusing this weapon at the fingertips of the elites would be a decentralized internet; an internet in which analytics are not collected or cannot be collected. Whether this can be done using existing internet infrastructure or if it would require the freedom minded to start all over from scratch, I do not know. All I know is that while the existing system is indeed useful to liberty advocates as a means to spread information and to counter disinformation, it is also highly useful to the elites as a means to view and predict mass behavior. It is a trade-off, and it is hard to say who is getting the better part of the trade.

    For the establishment, though, the internet is quickly becoming, for all intents and purposes, the all seeing eye.

    Human Integration With The Internet

    Here is where Eric Schmidt’s claim of Google “knowing what you are thinking” could actually come true. Yet another statement from Schmidt in an interview with The Hollywood Reporter breaks down exactly what a human integration with the web might entail:

    “There will be so many IP addresses… so many devices, sensors, things that you are wearing, things that you are interacting with that you won’t even sense it. … It will be part of your presence all the time. Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room.”

    Note that Schmidt keeps bringing up the idea that they will have your “permission” to watch your life and actions in such vivid detail. The elites love the idea of consent, but see consent as an unconscious act.  Meaning, they take joy in tricking people into consenting to their own slavery through misinformed participation. Surely, if the average person knew the extent to which their information would be used by the establishment against them they would not consent to a thing. But the elites figure that your ignorance and participation is enough for them.

    Case in point, the “internet of things” which Schmidt is describing, is already here.

    Not only can spy agencies tap into your web activity and your computer microphone and webcam, but also your cell phone activity. This includes the ability to use cell phone GPS to track every move you make in real time. But cell phones can also be activated while turned off (as long as they have battery power), and your conversations can be recorded while you are none-the-wiser.

    The cell phone is also a powerful tool for video surveillance. Cell phone makers are now getting ready to equip products with facial recognition software, allowing organizations like the NSA to not only track you with your own cell phone, but also track you through OTHER people’s cell phones if they happen to capture your face in their own phone camera.  Imagine a world in which the elites have eyes everywhere because nearly everywhere you go someone is holding a cell phone with biometric software.

    New products are even more invasive. Amazon’s latest “Echo” technology, featuring “Alexa,” an app which allows the Echo to interpret your commands via microphone and talk back to you, is essentially a highly sensitive listening device (with digital speech interpretation) which people are paying good money for and willingly centralizing in their homes. This is so Orwellian it is astonishing.

    Though Amazon claims the Echo only records audio for 60 seconds at a time and has refused to give data to the government in two separate instances for use in court prosecutions, the fact is that Amazon does have the data. And, if Amazon has access, then the NSA has access. It is foolish to assume otherwise. The federal pursuit of warrants to gain the data for use in court cases is nothing more than a show designed to normalize the practice of exploiting these devices and make the idea more palatable to the public. If the data can be used to solve a crime, then how can such surveillance be bad, after all?

    What Schmidt envisions, and I think what the globalists envision, are millions of households filled with devices like the Echo. Not only this, but they also envision every human being reliant on the “internet of things” every moment of every day. They want a world in which you can’t accomplish any necessary activity without interacting with the network. They want a world in which everything you say and do is recorded and modeled and profiled. We are not quite there yet, but we are not far off, and if such a world comes to pass, then the elites will, in a sense, be able to predict individual thought and behavior.

    Countering The Surveillance Grid

    In my next article I will be outlining more methods for countering establishment intrusions into your life. Not only that, but I will also be explaining how you can turn the tables and predict the behavior of the elites.

    In the meantime, the best solution to the problem is to distance one’s self from the grid wherever possible. This means doing simple things, like leaving your cell phone at home when it is not really necessary. I grew up in an era without cell phones. Trust me, we got by just fine without them.

    It also means being more present-minded on the technology in your home and what it does. Do you really need your webcam overlooking your house all day long? Does your computer really need to be operating every second? Do you really need to take pictures of your entire life and post them on Facebook? Can you not limit your desire for every new gadget that happens to come along?

    Humanity needs a healthy distance from technology. This doesn’t mean we go back to using a horse and buggy, but it does mean there is wisdom in moderation. Mass surveillance potential by the establishment is not just a threat to people who might be “up to no good”; it is a threat to everyone. For the ability to predict a population’s behavior makes that population highly controllable. NO ONE is morally benevolent enough to be trusted with that kind of power. Anyone deliberately seeking to obtain such power should be treated with the utmost suspicion. Only the worst of men desire the means to intrude on the lives and minds of men.

  • Chuck Todd Excoriates Buzzfeed's Editor in Chief: 'YOU PUBLISHED FAKE NEWS'

    Democrat shill, Chuck Todd, cannibalized the liberal media tonight by ripping into the Editor in Chief of Buzzfeed, Ben Smith, for publishing a 35 page dossier of laughable content, such as germaphobe Trump having Russian hookers urinate on him, or an irate Donald yelling at Ivanka to respond to her mother, whilst devouring a plate of chicken tenders, saying that if she didn’t her Mother would perish in a horrible accident.
    img_6070

    Over the past day, all of the actors involved in leaking the ‘dossier’ to the public have been discredited and humiliated — from John McCain to the CIA and of course  to the Buzzfeed reporter, Rick “I’m a spy” Wilson — who published the trite piece of offal — hoping it would derail Trump’s presidency and give solace to the cadre of his fellow Never Trumpsters, who’ve been waiting for the opportunity to discredit and rid themselves of his orangeness.

    Unfortunately, for him and his ilk, there are consequences to publishing lies about the President elect of the United States, especially when done in a manner that garnered world wide exposure, galvanizing all of the snowflakes to unite and form into a maniacal Snow Demon set out to devour and crush President elect Donald J. Trump.

    Once again, The Donald has proved to be resilient, admonishing his enemies , taking a flame thrower to them — effectively reducing them to a small, sad, pond of liberal misery to be pissed upon whenever he’s in the mood for golden showers.

    Todd eats Smith.

     

    Content originally generated at iBankCoin.com

  • 2016 Chicago Homicides Even Higher Than Originally Reported

    2016 was a record breaking year for the city of Chicago, unfortunately just not in any positive ways.  Throughout 2016 we noted several grim milestones that plagued the Windy City: the deadliest month in 23 years, the deadliest day in 13 years, 4,300 people shot…the list goes on and on.  And, as we noted a couple of weeks ago, when it was all said and done Chicago was thought to have recorded around 762 murders in 2016 (see “Chicago Violence Worst In 20 Years: ‘Not Seen This Level Of Disrespect For Police Ever’“).  To put those numbers into perspective, Chicago recorded over 20% more murders in 2016 than New York and Los Angeles combined, despite having a fraction of the population.

    And as bad as all those figures are, according to the Cook County Medical Examiner’s office, the actual number of homicides recorded in Chicago in 2016 were even higher than the official police data would suggest.  The discrepancy is largely due to the fact that the Medical Examiner’s office tallies “homicides” while the official police data tracks “murders,” which exclude intentional killings that are deemed “justified” (e.g. police shootings).  So while the official police data suggests there were 762 murders in 2016 the county numbers reflect 812 homicides including all of the “justified” killings.

    The record-setting violence in Chicago is even worse than announced as new evidence shows the city suffered 50 more homicides last year than the numbers publicly reported in the past week.

     

    The city posted a decades-high homicide count of 812 in 2016, per the Cook County Medical Examiner’s office. That’s 15% greater than the 762 murders reported by the city’s police department.

     

    The discrepancy is largely due to the fact that the county tallies “homicides” while the police number counts “murders.” Murders are defined as violent acts subject to criminal prosecution. Homicides, according to the medical examiner, include instances “when the death of a person comes at the hand of another person. This does not imply that all homicides are murders that would be subject to criminal prosecution.”

     

    The city police count is also lower because it excludes violent, intentional deaths if the act is deemed justified, including police killings of residents.

    Meanwhile, the overwhelming majority of Chicago’s homicides came a result of gunshot wounds while ~80% of the victims in Cook County were African American.

    Gun violence is the leading cause of death for victims of homicide in Chicago with 725 decedents being felled by at least one gunshot wound.

     

    African Americans also bore the brunt of the violence in Cook County, which includes Chicago. They accounted for 710 of the county-wide total of 915 (88% of which occurred in the city). Men comprised 90% of the homicide victims in the county.

    On a positive note, after a violent opening weekend to the year (see “3 Killed, 27 Wounded As Chicago Opens 2017 With A String Of Murders“), shootings and murders over the past week seem to be much lower than the run-rate for most of December.  Per HeyJackAss!:

    Chicago Murders

     

    And while we would like to hope the recent data points to a less violent 2017, the collapse in shootings seems to be perfectly correlated with a 5-day period of frigid temperatures that likely kept Chicago’s violent youth indoors for a few days.

    Chicago Murders

  • FBI Reportedly Sought FISA Court Warrant To Spy On Trump Campaign Officials

    Submitted by Jason Ditz via AntiWar.com,

    A new report released today features both the FBI seeking to launch a surveillance operation against an active US presidential campaign, and the ultra-rare case of the FISA courts actually turning down an FBI request to conduct surveillance against somebody.

    The report, originating at the Guardian, claims that the FBI had sought broad surveillance powers over four high-ranking members of President-elect Donald Trump’s campaign during the election, claiming them to have had contact with Russian officials.

    The FISA court turned the request down, telling investigators they needed to narrow the request.

    Though the four are not directly named in the report, it is related to claims in a dossier of Russia having substantial blackmail dirt on Trump, and that dossier centered heavily around accusations against a handful of Trump campaign personnel, including Carter Page, Paul Manafort, and Lt. Gen. Michael Flynn, along with Trump’s personal lawyer Michael Cohen, meaning some of them may well be among the targets.

    Secondary reports speculated that the FBI may well have sought a more narrow application for surveillance, though details on that are even less clear than the previous reports.

    Though a lot of these reports don’t end up substantiated, if true this could well add to the expected acrimony between the incoming administration and the intelligence community.

  • American Home Sale Failures Suddenly Double In Q4 2016 – Signed, Sealed, No Deal

    A stunning new analysis from Trulia suggests that rising interest rates in 4Q 2016 may actually be having the desired effect of cooling home sales, despite the best efforts of Obama to keep the party rolling at the expense of American taxpayers.  Looking at homes that go from “pending” status back to “for sale”, Trulia found that the number of home “sale failures” spiked in Q4 2016, to nearly nearly double the 2015 rate, with “starter homes” being most at risk.  

    Nationally, sales have been failing at an increasing rate, rising to 4.3% in Q4 2016 from 1.4% of all listed properties during Q4 2014. On an annual basis, the failure rate has nearly doubled to 3.9% in 2016, up from 2.1% in 2015.

     

    New homes and very old homes are least likely to see deals fail. As of Q4 2016, homes built in 2016 have among the lowest proportion of failed sales at 2.6%. That proportion increases steadily as age increases to an average of 5.2% in homes built from 1959 through 1969, then falls steadily to an average of 3.5% for homes built from 1900 through 1920.

     

    Of all listings in the largest 100 metros, 7.1% of starter home listings failed in the most recent quarter, compared with 6.7% of trade-up homes and 3.8% of premium homes. For all of 2016, the failure rate was 6.3% for both starter and trade-up homes and 3.6% for premium homes.

     

    During the last two years, the places with the most failed sales are predominantly in the West with Las Vegas leading the pack at 7.6% of all unique listings reverting back to “for sale” at least once.

     

    During the most recent quarter, Tucson, Ariz., saw the highest rate of failed deals with 13.9% of all unique listings retrogressing. For all of 2016, Ventura County, Calif., had the highest fail rate at 11.6%, up from 3.1% in 2015.

     

    Considering both the last two years and just the most recent quarter, Madison, Wis., has had the fewest listings fall back to a “for sale” status at 0.1% of all listings.

    Not surprisingly, per Bloomberg, the highest rates of failure occurred in the subprime mecca of the American Southwest.

    Mortgages

     

    Meanwhile, starter homes performed the worst…

    Mortgages

     

    And while any number of things can cause a home sale to fall through, including lower than expected appraisals and bad home inspections, we suspect that rising mortgage rates are more likely the cause of the sudden surge in “failed sales” rather than a national outbreak of termites.  With Americans managing their monthly budgets down to the last penny, because you can “afford it” as long as you can cover the monthly payment, we suspect the 60bps rise in the average 30-year fixed mortgage rate during 4Q was just more than the fragile American budgets could bear.

    Mortgages

  • Russia Deploys S-400 Missile Regiment Near Moscow On Combat Duty

    While the stated reason behind its deployment has not been disclosed, Russia has put on duty a surface-to-air missile regiment equipped with the brand-new S-400 air defense system, Russia’s most advanced, in Moscow’s suburbs on combat alert.

    “The SAM combat squads of the Moscow Region aerospace forces have put the new S-400 Triumph air defense missile system into service, and have gone on combat duty for the air defense of Moscow and the central industrial region of Russia,” the Defense Ministry’s Department of Information and Mass Communication told Interfax. The new SAM battery arrived at its destination in the Moscow Region from Kapustin Yar in the south Russia last December, the Defense Ministry noted.

    “The main task of the anti-aircraft missile troops of the Russian Aerospace Forces is air defense and protecting vital state, military, industry and energy facilities, as well as the Armed Forces troops and transport communications, from aerospace attacks,” said the ministry.

    The Triumph system, which was developed by air-defense systems manufacturer Almaz Antei, is designed for high-efficiency protection against airstrikes utilizing strategic, cruise, tactical, and other kinds of ballistic missiles. The new system is capable of hitting moving targets in the air, including planes and cruise missiles, at a distance of 400 kilometers, as well as ballistic targets moving at speeds of up to 4.8 kilometers per second at altitudes ranging from several meters to several dozens of kilometers.

    As RT adds, four more Triumph units are to come into service in 2017, citing the Russia’s Defense Ministry said. S-400 Triumph air defense systems have been providing air cover for Russia’s forces in Syria since November, when President Vladimir Putin order their deployment.

    It was not clear however, why i) Russia is deploying one near the capital now and ii) why it is doing so publicly.

    “With these complexes, we are able to destroy both sea and ground targets” at distances of 350 kilometers for sea targets and nearly 450 kilometers for ground targets, Russian Defense Minister Sergey Shoigu said at the time. In October, President Putin and India’s Prime Minister Narendra Modi signed an agreement for the sale of S-400s to India. Deliveries could begin in 2020.

  • The Path To $10,000 Bitcoin

    Submitted by Charles Hugh-Smith via OfTwoMinds blog,

    So let's imagine a scenario in which tens of trillions of at-risk wealth suddenly seek an alternative–any alternative to staying in an asset class that's circling the drain.

    As my colleague Davefairtex observed recently, the paint isn't quite dry on bitcoin and the expanding host of other cryptocurrencies. Initial enthusiasm for the latest cryptocurrency that's going to eat bitcoin's lunch generates outsized returns for early investors, but as glitches in the vision arise, the bubble of initial euphoria pops.

    Differing visions of bitcoin's future have divided its community of participants and miners, and hard forks have split other cryptocurrencies into competing camps.

    Meanwhile, the spectre of outright bans on bitcoin and cryptocurrencies by nations such as China adds uncertainty to the entire sector. Many observers expect that China's increasingly pervasive attempts to staunch the flow of capital out of China via capital controls will lead inevitably to strict limits on bitcoin or even a total ban on bitcoin transactions and mining in China.

    Since the majority of mining and transactions occur in China, severe limits or a ban would have an outsized impact on the bitcoin community. Many observers foresee the potential for a massive decline in the price of bitcoin should such a ban be imposed.

    As if all these issues didn't generate enough uncertainty and skepticism, it seems as if every time the general public starts getting interested in cryptocurrencies, another exchange is hacked or another entry in the cryptocurrency sweepstakes blows up, sending the sector back into the "untrustworthy" abyss.

    But this minefield shouldn't blind us to the possibility of a path to $10,000 bitcoin. Skepticism is always prudent in any financial matter, especially a speculative one, so put on your skeptical thinkijng cap and follow along.

    The problem is everything is now speculative. Do you really think the $100 trillion private-sector bond market (i.e. the bet that debtors will pay back what they borrowed with interest) is "safe," as in guaranteed, bullet-proof, no serious loss of capital is possible, etc.? How about the $60 trillion sovereign (government) bond market?

    The problem with sovereign bonds is governments with central banks can create "money" out of thin air to pay interest and redeem maturing bonds, but this devalues the currency. So getting back 100% of your nominal investment doesn't mean you're whole; if the currency the bond is denominated in fell 50%, bondholders suffer a 50% loss in the purchasing power of their initial capital. Ouch. How is that not speculative?

    How about the $70 trillion in global stocks? Yes, we all "know" that stocks will never go down ever again because central banks can keep inflating new credit bubbles indefinitely–but let's not kid ourselves: history tells us that stocks remain a speculative gamble.

    How about the $62 trillion in unsecuritized debt instruments? How much of this debt is collateralized by fast-dying malls, bubble-priced real estate, or Unicorn-type valuations in other assets?

    Take a gander at this chart of financial assets, roughly $300 trillion, and note that this doesn't include real estate, housing, etc. Global real estate is estimated at $217 trillion, roughly two-thirds of financial wealth.

    Together, these assets add up to over $500 trillion.

    Once again, the larger context here is: all these assets are speculative. Yes, even real estate. Consider this, if you missed it: When Assets (Such as Real Estate) Become Liabilities.

    Then there's the currency market. Care to argue that currencies are non-speculative investments? Is that why Chinese wealth is gushing out of the yuan, because it's so guaranteed to never lose purchasing power? Is that why the euro fell from 1.40 to 1.05, because it's a guaranteed safe investment? Venezuelans learned the hard way that fiat currencies when mismanaged by the issuing nation/central bank can destroy wealth on an unimaginable scale.

    So now let's turn to bitcoin, with a market cap of about $14 billion, down from a recent high of $18 billion. Now compare that to $500 trillion. If we take 1 measly little trillion, bitcoin's entire market cap is 1/70th of that.

    So let's imagine a scenario in which tens of trillions of at-risk wealth suddenly seek an alternative–any alternative to staying in an asset class that's circling the drain. We're accustomed to "rotation," the nice little game where bonds can be sold and the capital invested in real estate or stocks, or vice versa.

    We're less accustomed to all the conventional asset classes toppling like dominoes. Where do the fleeing trillions go when stocks, bonds and real estate are all going down in a chaotic sell-off? Gold and silver are time-honored safe havens, but it's not too difficult to foresee the potential for limits or bans on gold, or supply constraints. Some percentage of investors will consider alternatives.

    In such an environment of a crowd rushing for increasingly narrowing exits, what thin slice of institutional and individual investors will take a chance that bitcoin might hold or even increase its value as a major currency melts down, or some other global financial crisis unfolds?

    Shall we guess 1/10th of 1% of the panicky fleeing wealth will take the chance that bitcoin will be a safer haven than the conventional assets that are cratering?

    So 1% of the $300 trillion in financial assets (setting aside the $200 trillion in real estate for the moment) is $3 trillion, and a tenth of that is $300 billion.

    So what happens to bitcoin's price if $300 billion rushes through the wormhole? On the face of it, market cap would go up 20-fold from current levels. Since the number of bitcoin is limited to around 18 or 19 million (subtracting those bitcoin lost forever to hard drive crashes, etc., and those yet to be mined), price would also have to rise 20-fold.

    OK, so 1/10th of 1% of global financial wealth flowing into bitcoin strains credulity. Let's make it 1/20th of 1%, or $150 billion. That still pushes bitcoin's market cap and price up 10-fold.

    That's the pathway to $10,000 bitcoin. Unlikely, you say? Perhaps. But if you're of the mind that $500 trillion in current assets might be revalued considerably lower in a global crisis, then a tiny sliver of that fast-evaporating wealth finding a home in bitcoin (or other cryptocurrencies) doesn't seem all that farfetched.

    You want farfetched, how about $3 trillion in panicky fleeing capital flooding into bitcoin? Yes, a whole, gigantic, enormous 1% of speculative financial "wealth" and "money" seeking a home in cryptocurrencies.

    (It's worth doing the same exercise with gold, only substitute $6.4 trillion in market cap (i.e. all the non-central owned bank gold) for bitcoin's $14 billion market cap.)

    Cryptocurrencies are intrinsically volatile and speculative. Anyone pondering them must keep this firmly in mind at all times. There is no "guaranteed" safety or guaranteed anything. Everything that appears solid can melt into thin air (to borrow Marx's phrase) without advance notice.

    All of the World’s Money and Markets in One Visualization

    How Much Gold Do Central Banks Actually Have?

    Disclosure: the author has a tiny speculative position in bitcoin. This is not a recommendation to anyone to speculate in any financial instrument, including cryptocurrecies. Please read the site's full disclosure here: HUGE GIANT BIG FAT DISCLAIMER.

  • China's Xi Open To Meet Trump's Team In Davos, Warns Populism "Can Lead To War"

    On the surface, relations between China’s president Xi and Donald Trump have had a rocky start even before the president-elect’s inauguration, with speculation about a trade war, tariffs, the collapse of the “One China” policy, the confiscation of a US naval drone, fly-bys over disputed islands, and non-stop jingoist bluster dominating the airwaves and local press. However, that may be merely bluster as the two leaders gradually warm up to each other, ironically, at a very cold place: Switzerland’s World Economic Form held, as every other year, in Davos. It is here that a senior Chinese official said Beijing is open to a meeting with US president-elect Donald Trump’s team.

    “China has good contacts with the present US government, and also has a smooth communication channel with Trump’s team,” deputy foreign minister Li Baodong said on Wednesday. Li was responding to a query on the possibility of a meeting between President Xi Jinping and Trump’s team members when they attend the World Economic Forum in Davos from January 17 to 20, according to SCMP.

    This year’s forum is expected to be dominated by discussion of a surge in public hostility toward globalization and the rise of U.S. President-elect Donald Trump, whose tough talk on trade, including promises of tariffs against China and Mexico, helped win him the White House. Earlier, we laid out the top risks envisioned by the WEF in 2017, and which will be topic of much discussion by those present. They are summarized in the chart below.

     

    State Councillor Yang Jiechi met retired general ­Michael Flynn, the US president-elect’s nominee for national security adviser, and other Trump team members in New York last month.

    What makes this year’s Davos meeting unique is that as reported previously, this will be the first time a Chinese head of state will attend the winter gathering of political and business leaders. And while Trump’s inauguration is on January 20, preventing him from participating in Davos, Xi will attend the forum as part of a state visit to Switzerland from January 15 to 18.

    World Economic Forum executive chairman Klaus Schwab said “someone from the transition team representing the new [Trump] administration” would attend the forum, according to Reuters. US Vice-President Joe Biden and Secretary of State John Kerry would also be there, Schwab said.

    “During the annual meeting in Davos, China is willing to exchange ideas with all parties [at the forum],” Li said, adding that bilateral meetings were still being discussed. “As long as both sides have the time and will, we are willing to arrange for meetings.” Commenting on why Xi had broken with past practice of sending the premier or other top officials to Davos and decided to attend himself, Li said the head of state’s decision came after “years of invitations from WEF executive chairman Klaus Schwab”.

    According to Chinese officials, quoted by Reuters, during his visit, Xi Jinping will promote “inclusive globalization” and will warn that populist approaches can lead to “war and poverty.”

    Jiang Jianguo, head of the State Council Information Office, told a symposium hosted by the World Trade Organization in Geneva that President Xi would go to Davos to push for development, cooperation and economic globalization in order to build “a human community with shared destiny.”

    “With the rise of populism, protectionism, and nativism, the world has come to a historic crossroad where one road leads to war, poverty, confrontation and domination while the other road leads to peace, development, cooperation and win-win solutions,” Jiang said.

    Here China was speaking tongue in cheek, and referring not so much to events in the UK or the US, but more about possible events in China, where it is very much terrified that if the local population is ever inspired by the anti-establishment wave observed in the developed world, then it’s game over for the Chinese landed oligarchy, which in many ways is far more corrupt and crony, not to mention rich, than any western government.

    To that point, at a briefing in Beijing on the Davos visit, Vice Foreign Minister Li Baodong said China would respond to the international community’s concern over globalization by putting forward Beijing’s opinions on how to “steer economic globalization toward greater inclusiveness.”.

    Needless to say, this is precisely the opposite direction in which Trump would like to steer the world economy.

    Li added that criticism of trade protectionism leveled at China, by Trump and others, was unjust. “Trade protectionism will lead to isolation and is in the interest of no one,” he said. “Channels of communication are open” between China and Trump’s transition team at the forum, Li said, but warned that scheduling a meeting might be difficult. Well, not if the two manage to connect in Davos, even though that would hardly resolve the inherent conflicts between a mercanilist nation and one that is (allegedly) trying to try out isolationism.

    Days after Trump’s victory, Xi vowed to fight protectionism and to push forward with multilateral trade deals. Foreign businesses in China have long complained about a lack of market access and protectionist Chinese policies.

     

  • Chanos Fears Trump's "Unmet Expectations", Warns Investors To "Rethink Almost Everything In Your Life"

    Submitted by Lynn Paramore via The Institute for New Economic Thinking,

    Milwaukee-born short-seller Jim Chanos, founder and managing partner of New York-based Kynikos Associates, teaches University of Wisconsin and Yale business students about corporate fraud. During his life and career, he has witnessed seismic shifts in economic thinking and the relationship between labor and capital.

     

    Chanos shares his thoughts on the world emerging from the election of Donald Trump and the tumultuous political events of 2016. 

    Lynn Parramore: Leading up to the election of Trump, we had eight years of Obama, and before that, eight years of Bush. Before we get to the president-elect, how do you assess the records of those past presidents in terms of basic policing of markets and corporate fraud?

    Jim Chanos: Bush was the MBA president who was going to be pro-business, cut taxes, and deregulate. Meanwhile, he had two recessions on his watch, less employment than when he started, and two bear markets in the stock market — probably the worst president for business since Herbert Hoover. The business guy!

     

    Yet, he did tighten up the Justice Department and go after corporate crime. The Ashcroft Justice Department, as bad as it was in lots of other things, went after corporate fraud and accounting fraud, criminally. In 2002, we got Sarbanes-Oxley to curb fraud.

     

    I don’t know that all this was Bush’s predilection — remember, his biggest supporter was Enron. But because of Enron and the other dot-com era scandals, he got backed into a corner to go hard on them. I’ve joked that the only person who put more corporate executives in jail than George W. Bush was his father during the Savings and Loan Crisis.

     

    On these issues, I’d rather have Bush any day of the week than Obama. Both Eric Holder and Lanny Breuer of Obama’s Justice Department said in TV interviews and testimony that they factored in non-judicial aspects as to whether to mount prosecutions. I think that this had political costs to the Democrats. The crony capitalism still bothers people — the idea that Wall Street got off scot-free and they are still struggling. That lack of justice applied equally under the law was corrosive, not necessarily for Obama personally, but certainly for the party following him.

    LP: How do you see a Trump presidency in this light?

    JC: You and I have talked about how it has become a cost calculus for lots of corporations and financial institutions to cheat. “If I get caught,” they say, “I’m just going to pay a fine.” How does this change with new faces in Washington?  You still have this very pro-corporate group on Capitol Hill whose main bailiwick, in my opinion, is to protect the corporate class and the very wealthy. You’ve got what ostensibly is a proto-populist in the White House with a cabinet that is a mélange of different types, so who knows?

     

    In my overall view, stuff happens to change people. If we go back to Bill Clinton, his “Putting People First” manifesto in ’92 was quite left-of-center, but he didn’t govern that way. If you look at things like NAFTA, Welfare reform, and cutting capital gains taxes  — well, in many ways, Ronald Reagan would have been proud of him.

     

    Events conspire to derail our perceptions of presidents. When we look at their platforms, we think we know where things are headed. But in modern times, the only two presidents that I can think of who really got their ideas and platforms enacted wholesale were FDR and Reagan. Everybody else has gotten compromised, or has had events overwhelm them.

    LP: What do you make of the expectations of the economy under Trump?

    JC: I worry about the heightened expectations from the people who voted for him thinking that he’s their savior. That’s what scares me — unmet expectations.

     

    For the swing voter in the Midwest who voted for this guy because he thinks coal-mines are coming back or the plants are going to reopen — it’s not going to happen.

    LP: What about the rise in bank stocks since the election? Are banks anticipating deregulation?

    JC: Almost all stocks are going up, mostly because of the belief of lower taxation. But after Obama’s election, most stocks went down and kept going down until the following March — and then they tripled! So I wouldn’t read a lot into the first month or two.

     

    It could be that banks are anticipating deregulation, but so what? Deregulated to what end? They’re still going to have the capital requirements, which are international. Putting capital standards on them is the biggest way in which they were regulated.

     

    In the bigger picture, if you think this is an uncertain presidency and we’re not quite sure where he’s going and how events will conspire, it’s not that important to get too worked up because things will happen and you’ll have to react. If, however, this is a once-in-a-fifty-year change in global thoughts about capitalism, then you have to pay attention.

    LP: If this is a once-in-fifty-year change, what’s at stake?

    JC: Part of my view is that in the 1930s, we rejected the individuality of the ’20s and before. After the crash and the Depression, we finally put the corporate class and bankers to the sidelines. Whether it was Keynesianism or the New Deal in the West, or state fascism or the advent of Stalinism, you saw more government control over the economy. This was good for workers and large governments. It was more nationalistic and led, obviously, to the next conflict. But the rise of government planning and government involvement was good for nominal GDPs. It was not good for the asset-holding classes — stocks and bonds did terribly over that period, right? You wanted to be a worker, you wanted to be labor, not capital.

     

    The period from the late 1970s to 1980 changed all that. You had Thatcher and the U.K. and Reagan in the U.S. Mao died in 1976, the Solidarity movement in Poland began in 1978, and the Soviet Union peaked in power in 1979. You saw that the pendulum had gone too far and now we’re going to cut taxes on capital, we’re going to be more globalistic, and trade was going to improve. Since then, capital has risen and assets have done better than labor. Taxes have been light on financial assets and heavy on labor. Everything was reversed on its head.

     

    If we look at the events of 2016 — Brexit, the Italian referendum, Trump, and the rise of nationalist China — are these the harbingers of something bigger? Or are they just a coincidence?  The ground seems to be fertile for things to change globally. If so, does this give rise to a more nationalistic, protectionist, statist scenario?  Are labor prices going to go up again? Are we going to tax capital and emphasize wages?

     

    We’ll see….

    LP: Going back to Trump’s promise to bring jobs back to the U.S. — can the government even do that?

    JC: In the case of the ’30s, you had massive public works spending and government spending, so you created construction workers. But on that front, we’re not going to compete anymore, as the Carrier guy said. Mexican labor is $3 an hour. No amount of retraining for a lower-skilled assembly job is going to change that. The only thing that will replace that Mexican worker himself is a robot. And a robot is infinitely cheaper than even the cheapest labor.

     

    Surveys show that there are jobs open in the economy, but there’s just not a skill level to fill all of them. Our problem is the displacement in things like mining, assembly, low-end manufacturing – that’s where the job losses have occurred. It is just very hard under almost any scenario no matter what your politics are to see where those jobs are going to come back.

     

    To the extent that you have wholesale, large, construction-like projects, then you will put people to work at relatively high rates, but the jobs are episodic and not necessarily career paths. When I was making $14 an hour working steel in Milwaukee in the summers in college, a steel worker could basically say, “all right, as long as I understand that I’m going to work in this factory, I can have a nice living for my family.” Those jobs are gone. The plants closed. So the whole idea that someone can now say, “I can work in the Carrier plant for $20 an hour and be assured of a job for life and security and put my kids through college” — that doesn’t exist anymore.

     

    That’s where the problem and discontent will come — when you’ve sold that dream and it doesn’t happen. In that scenario, Trump begins to have a pretty short honeymoon.

    LP: You’ve long been linked with China. What do you make of the positions of China and the U.S. in the international economy, and how do you think they’re changing?

    JC: To me, the rise of Xi Jinping is a big event still underestimated in the global political economy. He is more of a personality than either Deng Xiaoping or Mao Zedong, certainly higher in stature internally than his predecessors. He is not first among equals in the Politburo Standing Committee — he’s first. This goes along with the theory about the rise of nationalists such at Putin in Russia. Xi Jinping is also a nationalist. He talks about the China Dream, China getting back to past glories, and not exporting communism. What you would have heard Mao say.

     

    He’s a member the Chinese Communist Party, but the Party exists now as a political apparatus, not an ideology. China would not have the type of capitalism it has today if this were not the case. So these are not Marxist-Leninists, but rather just a fantastic single party in control. We have to understand it in that light.

     

    China is increasingly a geostrategic rival. In the past, China looked toward protecting what it had — making claims on Taiwan and Tibet and ancillary areas, but the Chinese were really content not to compete in the global Cold War between the Soviet Union and the United States. Now we have this multi-polar world, and China sees itself clearly as the prime actor in the Pacific willing to fill any vacuum that the United States begins to pull away from.

     

    Xi Jinping comes in and immediately he rewrites the passport maps. He sets the air traffic and extends the air defense zones. More ominously, he begins to militarize the South China Sea, and puts military bases on the islands, which alarms pretty much everybody. (And yet if you look at a map of the Pacific, the only country that really needs to traverse the South China Sea is China itself —oil going from the Middle East to Japan goes around it. The South China Sea is symbolic more than it is geostrategic).

     

    I think, however, that Trump has decided that China makes a convenient media punching bag. You can claim that China took your jobs and China is a bogeyman. It seems to me that president-elect Trump does best when he has someone to fight against. However, the broader issue will be that foreign policy and national security events have a whole different dynamic than beating up on a defense contractor for an air conditioning plant.

     

    What will be the ramifications? How will China react? What do you do about countries like the Philippines that are in the middle — a country that has elected its own interesting president, someone who seems to want to embrace China after decades of being staunchly a U.S. ally? What does this do for Japan? Japan itself has a nationalist, Shinzo Abe, who wants to increase military spending and take off the yoke of the Japanese constitution block on an expanded military.

     

    There are many questions, but whatever you might think, China and Japan, while big trading partners, are not the best of friends in that neighborhood. Finally you’ve got the wacky guy in North Korea. What’s he going to do?

     

    This whole area just keeps quietly but relentlessly getting to be more dangerous. I think that at some point in the first four years of the Trump administration, the Pacific is going to heat up again.

     

    People are talking about starting a trade war with China but they haven’t really thought it through, because if you talk to corporate execs in the United States, they’re sort of quietly terrified.  Often the supply chain, even in U.S. manufacturing, relies on parts from Mexico and China coming in. We are pretty interconnected. Lots of businesses, and workers, too, will get disrupted in ways we can’t even think of in a trade war. There’s a reason why people studied the 1930s with the tariff walls that went up and the disruptions that happened. It’s negative for growth.

     

    So stay tuned, it’s going to be interesting. 

    LP: To turn to Europe, you’re a Greek-American, and you have been critical of the Eurozone’s attitude toward Greece. What do you make of the situation there now?

    JC: The key issues for Greece now revolve around two entities that are not Greek. First you have the EU as a whole. We continue to have these bombshells, like the Italian referendum and Brexit — and you’ve also got elections coming up elsewhere in 2017.

     

    I think Greece was sort of the Spanish Civil War to what’s about to be the EU’s WWII in that it was the opening preview of all of the problems that are going to come to the fore if Catalonia wants to become independent, if Italy wants to leave, if France wants to leave. The EU is being held together by chewing gum and string right now.

     

    With this rise of nationalism  — if that’s what it is and it continues — the EU is going to find itself increasingly a victim of people wanting self-determination in northern Europe. That’s the first thing. Second is something I’m much more concerned about which nobody’s paying attention to, and that’s the continued rise of Erdo?an in Turkey. He has not only consolidated his power through a series of purges —thousands and thousands of journalists and academics have been thrown in prison since the aborted coup — but increasingly he is becoming more militant and Turkey is becoming a pro-Islamic state that is part of NATO. He’s throwing wild monkey wrenches into the whole Middle Eastern situation by making claims on land that was owned by the Ottomans, pre-WWI, like modern-day Iraq, modern-day Syria, and modern-day Greece and Bulgaria. He’s warned the EU that he will open Turkey’s borders to undocumented immigrants if EU membership talks are frozen.  Like Xi Jinping, he’s putting out these old maps and saying: this is our real land. Erdo?an is yet another nationalist.

     

    Poor Greece is at the crossroads of all these seismic events and Ottoman Empire II. You’ve got the possible weakening or dissolution of the EU, and Greek debt problems are about tenth on the list of issues in that region. They’re going to struggle, no doubt about it. Every time the Greek economy starts to show some green shoots, it seems to stall and fall right back down again.

    LP: What do you hope might happen in this emerging world?

    JC: This is the tough thing about being in the financial markets. You can have opinions on all this stuff and either get it wrong or have it not matter.

     

    First, I hope our system of free trade holds up. That’s one thing I believe in fervently. The evidence seems to be that a rise of tariffs and trade walls and barriers will be bad for global growth. Given the debt overhang that’s out there, which is relentless, the ability of economies to service debts in a global trade war will be greatly curtailed, so I’m clearly watching that.

     

    I also continue to be concerned, on a stand-alone basis, with the giant debt bubble occurring in China. It has done nothing but just gotten bigger since you and I last sat down. Despite all the talk of reform, there really hasn’t been any. The Chinese are more reliant on the state than ever — on state lending and state banks. The debt continues to grow at twice the rate of growth, and now the currency is depreciating.

     

    We’re getting a situation where the Chinese economy is still a very important driver of global growth, but increasingly it is using the old methods that the Chinese themselves said only a few years ago that they would have to change. But they can’t, because every time they try, the economy slows too fast.

     

    China continues to be half of the demand for global commodities. It basically supports Africa and countries like Australia and Brazil. Almost 40 percent of global GDP is either China or commodity-exporting countries whose prime market is China. That’s considerable. So we have to look not only at China’s role with us, but China’s role on its own because it is such a driver for global growth, Chinese growth represents 1 point of the 3 percent GDP growth, so if China were not growing at all, we’d be at 2 percent. Doesn’t sound like a lot but it is. We have to keep our eye on what’s going on there. A global trade war would probably send China into a really steep recession.

     

    How would an average worker navigate a rising trade barrier globally? It’s scary. If we look back at the ’30s template, one major outlet was, of course, a giant arms race. By the late ’30s, you had the whole world realizing the threats of fascism and rearming rapidly. Keynesian government spending was what pulled up the economies; it just had some really bad repercussions from 1939-45. But if we get into any kind of global arms race with China, either conventionally or otherwise, that would be Reagan-like. I don’t know what the numbers would mean in terms of employment, but you would take a lot of manufacturing people and turn them to making other things. 

    LP: How do you rate the current moment with big periods of change you’ve seen in your lifetime?

    JC: I had this odd personal journey from being a union pipefitter and boilermaker as a college student — I made more money in two-and-a-half months making steel than I did my first year on Wall Street. I went from being a product of the industrial Midwest and putting myself through college by working in a steel mill, to being the beneficiary of the Reagan-Thatcher era. I saw the world change, but I didn’t really understand until years later what an important period the late ’70s/early ’80s was (and a great period for music, by the way!).

     

    If we’re in one of those periods now, if 2016 is like 1932 or 1979 — then you not only have to change your portfolio, you have to change your lifestyle. That’s one of the things we’ve been telling clients. If this is a major shift to populism, nationalism, greater state involvement, and less globalism, then you really have to rethink almost everything in your life.

     

    Certainly, if you were a capitalist in 1932, you might be best served to change your outlook. And if you were a union leader in 1979, it would have been good to change your outlook. The question will be, in 2016, would it be best for the Davos man and woman, the globalists, to change their outlook?

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Jan 11

Today’s News 11th January 2017

  • Bill Blain: "Throughout My Career, Years Ending In 7 Haven’t Been Good"

    While we wish one of our favorite market commentators’, Mint’s Bill Blain, all the best as he recovers from his recent heart attack, we would like to share with readers his inaugural for 2017 note, which lays out his current concerns about the state of the markets, and the global economy.

    From the January 10 edition of Blain’s Mid-Morning Porridge

    Let me start by stating the issues causing me some worry:

    Throughout my career, years ending in 7 haven’t been good.

    1987 saw a massive stock market crash, in 1997 we got the Asian Financial Crisis, and 2007 saw the start of the Global Financial Crisis and consequences we’re still struggling with today. In the case of year 7s, the trend is not our friend.

    I’m told by my stock picking chartists there is a 10-yr stock cycle that looks to have peaked. Many factors about this succession of market turnaround moments worry me – firstly, the scale of crisis seems to be multiplying as each 10-yrs event. A simple stock market rout in 1987 became near global catastrophe in 2007.

    Thankfully we haven’t ever had the kind of absolute global market meltdown doomsters say will happen, but it does strike me that market moves – whether caused by an evil conjunction of rogue algorithims and Hi-Speed-Trading, or simple human foolishness – are becoming increasingly chaotic, thus raising the scale of crashes.

    The second aspect is how financial crisis are solved. Each is new – but it worries me the efforts made to ensure the last crisis doesn’t happen again may contribute to the causes the next one. I certainly don’t believe the deluge of regulatory tat since 2008 has made the world safer. It has not… it has made it more.. difficult. It’s a game of consequences…

    And change is definitely coming…

    I’ve been looking at the dismal science of Economics. It’s proper name is political economy and its not a proper science. It’s a language for understanding complex events and responding to them,rather than mathematical rules. Over the past 10-years we’ve seen a massive economic experiment in monetary economics. It’s hasn’t gone well. It strikes me the legions of central bank economists are akin to the ancient alchemists looking to change base metal into gold….

    The piper will soon want paid. The next phase – underway already – will be a reversal back to fiscal economics. That one potentially positive reality for the US and UK, but yet another minefield for Europe. It’s a big if to see whether Trump delivers the fiscal boost the market expects, or whether the continued weakness of sterling continues to push the FTSE into the stratosphere. I have my doubts…!
    In Europe a swing towards Fiscal policy spells crisis.

    The fact that France and Italy could be steaming towards fiscal stimuli will break the current ECB monetary consensus, while Germans become increasing strident about the need for higher rates and an end to QE. Add to that a hefty dose of European politics. Dutch Elections, French Elections and the Germans.. its all much to worry about. 

  • U.S. Intelligence Agencies Have No Clothes

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    The true patriotism, the only rational patriotism is loyalty to the nation all the time, loyalty to the government when it deserves it.

     

    – Mark Twain, The Czar’s Soliloquy”

    At this point, pretty much everyone in America has seen the results of Hillary Clinton media pet, John Harwood’s recent Twitter poll.

    The significance of the above cannot be overstated. U.S. intelligence agencies, like so many other national institutions, have lost nearly all credibility in the eyes of the American public. The list is long, but includes economists, politicians, the mainstream media, central bankers, the financial system, and a lot more. The loss in credibility is well deserved and has nothing to do with Russia. Rather, it’s a function of a disastrous 21st century outcome for U.S. citizens both at home and abroad. A result that was achieved under eight years of Republican rule and then eight years of Democratic rule. The results were the same whether a donkey or elephant was in charge, because the people determining policy behind the scenes never really changed (same economists, central bankers, intelligence officials, etc), and the people selling the catastrophic policies to the public definitely never changes (mainstream media and its worthless pundits).

    So here we stand at a moment where trust in essentially all U.S. institutions is at a well deserved all-time low, and the best the establishment can come up with is to blame Russia. Even worse, those pushing the whole “Putin is to blame for everything” conspiracy theories, consistently refuse to back up their assertions with any evidence whatsoever. In fact, with each passing week the case looks increasingly flimsy, with the latest declassified document issued Friday being particularly suspect. Even many of those largely convinced of Russia’s meddling in the U.S. election admit the most recent report was pathetic, embarrassing and proved absolutely nothing.

    Robert Parry of Consortium News summarizes the farce perfectly in his recent piece U.S. Report Still Lacks Proof on Russia ‘Hack’. Here’s how he begins the article:

    Repeating an accusation over and over again is not evidence that the accused is guilty, no matter how much “confidence” the accuser asserts about the conclusion. Nor is it evidence just to suggest that someone has a motive for doing something. Many conspiracy theories are built on the notion of “cui bono” – who benefits – without following up the supposed motive with facts.

     

    But that is essentially what the U.S. intelligence community has done regarding the dangerous accusation that Russian President Vladimir Putin orchestrated a covert information campaign to influence the outcome of the Nov. 8 U.S. presidential election in favor of Republican Donald Trump.

     

    Just a day after Director of National Intelligence James Clapper vowed to go to the greatest possible lengths to supply the public with the evidence behind the accusations, his office released a 25-page report that contained no direct evidence that Russia delivered hacked emails from the Democratic National Committee and Hillary Clinton’s campaign chairman John Podesta to WikiLeaks.

     

    The DNI report amounted to a compendium of reasons to suspect that Russia was the source of the information – built largely on the argument that Russia had a motive for doing so because of its disdain for Democratic nominee Clinton and the potential for friendlier relations with Republican nominee Trump.

     

    But the report’s assessment is more than just a reasonable judgment based on a body of incomplete information. It is tendentious in that it only lays out the case for believing in Russia’s guilt, not reasons for doubting that guilt.

     

    For instance, while it is true that many Russian officials, including President Putin, considered Clinton to be a threat to worsen the already frayed relationship between the two nuclear superpowers, the report ignores the downside for Russia trying to interfere with the U.S. election campaign and then failing to stop Clinton, which looked like the most likely outcome until Election Night.

     

    If Russia had accessed the DNC and Podesta emails and slipped them to WikiLeaks for publication, Putin would have to think that the National Security Agency, with its exceptional ability to track electronic communications around the world, might well have detected the maneuver and would have informed Clinton.

     

    So, on top of Clinton’s well-known hawkishness, Putin would have risked handing the expected incoming president a personal reason to take revenge on him and his country. Historically, Russia has been very circumspect in such situations, usually holding its intelligence collections for internal purposes only, not sharing them with the public.

    Another very good breakdown of the clownishness of the latest intel report was written by noted anti-Putin activist Masha Gessen in The New York Review of Books. Like many others, she finds the obsession with RT within the report bizarre to say the least. She notes:

    Finally, the bulk of the rest of the report is devoted to RT, the television network formerly known as Russia Today.

     

    A seven-page annex to the report details RT activities, including hosting third-party candidate debates, broadcasting a documentary about the Occupy Wall Street movement and “anti-fracking programming, highlighting environmental issues and the impacts on public health”—perfectly appropriate journalistic activities, even if they do appear on what is certainly a propaganda outlet funded by an aggressive dictatorship. An entire page is devoted to RT’s social media footprint: the network appears to score more YouTube views than CNN (though far fewer Facebook likes). Even this part of the report is slightly misleading: RT’s tactics for inflating its viewership numbers in order to secure continued Kremlin funding has been the subject of some convincing scholarship. That is the entirety of the case the intelligence agencies have presented: Putin wanted Trump to win and used WikiLeaks and RT to ensure that outcome.

    Indeed, it appears the intelligence community is more concerned that RT is doing a better job than U.S. journalists at covering issues Americans care about than it is about Russia “hacking the election.” She also concludes:

    Despite its brevity, the report makes many repetitive statements remarkable for their misplaced modifiers, mangled assertions, and missing words. This is not just bad English: this is muddled thinking and vague or entirely absent argument…

     

    It is conceivable that the classified version of the report, which includes additional “supporting information” and sourcing, adds up to a stronger case. But considering the arc of the argument contained in the report, and the principle findings (which are apparently “identical” to those in the classified version), this would be a charitable reading. An appropriate headline for a news story on this report might be something like, “Intel Report on Russia Reveals Few New Facts,” or, say, “Intelligence Agencies Claim Russian Propaganda TV Influenced Election.” Instead, however, the major newspapers and commentators spoke in unison, broadcasting the report’s assertion of Putin’s intent without examining the arguments.

    Which brings me to the biggest red flag in the entire intelligence report. The part where it states:

    We also assess Putin and the Russian Government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him. All three agencies agree with this judgment. CIA and FBI have high confidence in this judgment; NSA has moderate confidence.

    If any agency should have high confidence it’s the NSA, and pretty much every security expert I follow seems to agree. First, here’s what Bruce Schneier wrote in his recent piece, Attributing the DNC Hacks to Russia:

    Attribution is easier if you are monitoring broad swaths of the Internet. This gives the National Security Agency a singular advantage in the attribution game. The problem, of course, is that the NSA doesn’t want to publish what it knows.

    Isn’t that interesting. The one agency with the most information is the one least confident in the conclusion. Why only moderate confidence from the NSA? I wonder.

    Schneier isn’t the only one of course. As famed NSA whistleblower William Binney noted in a recent article coauthored with Ray McGovern, The Dubious Case on Russian ‘Hacking’:

    With respect to the alleged interference by Russia and WikiLeaks in the U.S. election, it is a major mystery why U.S. intelligence feels it must rely on “circumstantial evidence,” when it has NSA’s vacuum cleaner sucking up hard evidence galore. What we know of NSA’s capabilities shows that the email disclosures were from leaking, not hacking.

    Here’s the difference:

     

    Hack: When someone in a remote location electronically penetrates operating systems, firewalls or other cyber-protection systems and then extracts data. Our own considerable experience, plus the rich detail revealed by Edward Snowden, persuades us that, with NSA’s formidable trace capability, it can identify both sender and recipient of any and all data crossing the network.

     

    Leak: When someone physically takes data out of an organization — on a thumb drive, for example — and gives it to someone else, as Edward Snowden and Chelsea Manning did. Leaking is the only way such data can be copied and removed with no electronic trace.

     

    Because NSA can trace exactly where and how any “hacked” emails from the Democratic National Committee or other servers were routed through the network, it is puzzling why NSA cannot produce hard evidence implicating the Russian government and WikiLeaks. Unless we are dealing with a leak from an insider, not a hack, as other reporting suggests. From a technical perspective alone, we are convinced that this is what happened.

    Again, if any agency should have high confidence, it is the NSA.

    Moving along, the U.S. government’s case gets even weaker the more you dig into it. A perfect example can be seen in how poorly State Department spokesman Robert Kirby handled a few questions during a recent press conference. Here’s the clip:

    Three major red flags appear in this exchange. First, Mr. Kirby admits that no evidence has been provided to the public regarding Russian hacking and distribution of information to Wikileaks, and that none would be forthcoming.

    Second, Mr. Kirby repeatedly insists that the fact “all 17 intelligence agencies” came to the same conclusion should be sufficient for the American public in the absence of any actual proof. To this I reply:

    I don’t know about you, but the fact that seventeen agencies representing a bipartisan status quo that has been catastrophically wrong about pretty much everything came to the same conclusion, does not inspire confidence or credibility in the mind of this citizen.

    Finally, there’s red flag number three. When AP reporter Matt Lee follows up wondering why the WMD assessment debacle holds no relevance to the current intelligence assessment, Mr. Kirby responds by highlighting all of “the kinds of gains that have been made in intelligence and analysis since then.”

    Here’s the problem. The Director of National Intelligence (DNI), James Clapper does not have clean hands when it comes to the WMD affair. He also blatantly lied to the American people with regard to NSA surveillance before being called out by Edward Snowden. As Binney and McGovern explain:

    Mr. Trump’s skepticism is warranted not only by technical realities, but also by human ones, including the dramatis personae involved. Mr. Clapper has admitted giving Congress on March 12, 2013, false testimony regarding the extent of the National Security Agency’s collection of data on Americans. Four months later, after the Edward Snowden revelations, Mr. Clapper apologized to the Senate for testimony he admitted was “clearly erroneous.” That he is a survivor was already apparent by the way he landed on his feet after the intelligence debacle on Iraq.

     

    Mr. Clapper was a key player in facilitating the fraudulent intelligence. Defense Secretary Donald Rumsfeld put Mr. Clapper in charge of the analysis of satellite imagery, the best source for pinpointing the location of weapons of mass destruction — if any.

     

    When Pentagon favorites like Iraqi émigré Ahmed Chalabi plied U.S. intelligence with spurious “evidence” on WMD in Iraq, Mr. Clapper was in position to suppress the findings of any imagery analyst who might have the temerity to report, for example, that the Iraqi “chemical weapons facility” for which Mr. Chalabi provided the geographic coordinates was nothing of the kind. Mr. Clapper preferred to go by the Rumsfeldian dictum: “The absence of evidence is not evidence of absence.” (It will be interesting to see if he tries that out on the President-elect Friday.)

     

    A year after the war began, Mr. Chalabi told the media, “We are heroes in error. As far as we’re concerned we’ve been entirely successful.” By that time it was clear there were no WMD in Iraq. When Mr. Clapper was asked to explain, he opined, without adducing any evidence, that they probably were moved into Syria. 

    To conclude, I certainly think it is important to know if the Russian government hacked the DNC/Podesta and then handed that information to Wikileaks. Likewise, such an explosive claim necessitates publicly available evidence given the horrible track record of U.S. intelligence agencies. Until such evidence is made available I, like countless other Americans, will tend to believe Wikileaks, which has a track record of proving its claims and being accurate, as opposed to U.S. intelligence, which doesn’t.

  • Caught On Tape: U.S. Immigration Official Okays Syrian Immigrants With "Fake Passports"

    Over the past several months, we have frequently noted the staggering increases in the number of refugees Obama has permitted into the United States just as his Presidency is winding down.  In fact, just a couple of weeks ago, we noted that in the first 84 days of the 2017 fiscal year (October 1, 2016 – December 23, 2016), the Obama administration has accepted 25,584 refugees into the United States, an 86% increase year-over-year (see “Refugee Admissions Surge 86% YoY As Obama Rushes Arrivals Ahead Of Trump Inauguration“).  And while we were expecting a large increase in refugee admittances in 2017 (see “Hillbama Administration Plans To Admit At Least 110,000 Refugees In 2017“), the ~30% increase that Secretary John Kerry estimated back in September is looking like a fairly modest increase now compared to the actual numbers. 

    Meanwhile, just a few weeks ago we pointed out that European officials finally admitted that refugees were being directly recruited by ISIS both in Syria and in migrant camps throughout Europe to carry out terrorist attacks (see “Europol Admits ISIS Actively Targeting Refugees To Carry Out Terrorist Attacks In The EU“).

    Confirming what most of us deduced long ago via the application of just a bit of common sense, Europol and Frontex, Europe’s  border and coast guard agency, are finally admitting that their intelligence indicates coordinated efforts on the part of ISIS to recruit asylum seekers, both in Syria and in migrant camps after they’ve already reached Europe, to carry out terrorist attacks.  In a report published by Europol, counter-terrorism experts warn that, among other things, “Syrian refugee diaspora may become vulnerable to radicalisation once in Europe and may be specifically targeted by Islamic extremist recruiters.”

    But, here in the U.S. there should be no similar cause for concern because Josh Earnest has assured us that “significant screening was put in place to ensure that these [refugees] don’t pose an undue threat to our national security.”

    And while we have no doubt in the Obama administration’s commitment to a rigorous vetting process, we were somewhat alarmed by an undercover video revealed earlier today by the Daily Caller which seems to show a U.S. Immigration Services official in New York coaching a woman on how to help a Syrian family gain asylum in the US with “fake passports”…a situation which the official describes as “far from unique.”

    “The fake passport is one thing, we are going to use the name that is on the passport as AKA, also known as,” the man identified as Sergio responded. He added, “chances are considering the situation in Syria, they are not going to be sent back.”

     

    The USCIS employee went on to say, “Was there ever a situation where people came with fraudulent documents and qualified for asylum? Yes, because it’s understood that they can not always obtain genuine documents. So it’s far from being unique.”

    Of course, when the Daily Caller attempted to confirm whether granting asylum to refugees with “fake passports” was indeed “far from unique,” they were courteously referred to a website for further assistance with their concerns.

    The Daily Caller asked the USCIS if giving asylum to immigrants with fake documents is “far from unique” like the USCIS employee said in the video. A spokesperson responded by saying they do not “publicly discuss individual immigration cases” and giving a link to a information on their refugee and asylum programs.

     

    A USCIS spokesperson also said that the agency cannot confirm the authenticity of the video as they claim it is heavily edited. The USCIS did not confirm nor deny that Sergio is an employee with the agency.

     

    TheDC has previously reported on an internal Immigration and Customs Enforcement memo which states difficulty in preventing fraud in the refugee program as “bad actors” use false biographies and “produce and submit fictitious supporting documentation.” It has also been reported that the Islamic State has a thriving fake passport industry.

     

    Guess there is really no need for the elaborate games when you can just walk straight through the front door…

    Refugee ISIS

  • Fed Remits Only $92 Billion To Treasury In 2016, Lowest Since 2013

    The world was reminded of the cozy relationship between The Fed and The Treasury again today as Janet sent Jack $92.0 billion of freshly ponzi'd net income for 2016 providing the federal government with an important source of funding. This, however, is down almost 6% from 2015 and despite a considerably larger balance sheet is the lowest remittance since 2013 due to doubling the handouts to the major banks to $12 billion last year.

    As Reuters reports, part of the decline is due to a drop of about $2.6 billion in what the Fed earns on its holdings of U.S. Treasury bonds and mortgage-backed securities accumulated in fighting the 2007 to 2009 financial crisis.

    But most of it is a result of the interest paid on excess reserves held by commercial banks at the 12 regional Federal Reserve institutions. Banks are required to hold some reserves, but are allowed to deposit more if they choose.

     

    Between more cautious lending and weak economic growth, total reserves have been at historically high levels since the financial crisis — roughly $2 trillion as of the end of the last year compared with a few billions of dollars in more typical times.

     

    When the Fed increased its target interest rate in Dec. 2015 by a quarter of a percentage point, to a range of between 0.25 and 0.5, it increased the rate paid to banks as well – and pushed its overall reserve interest costs from $6.9 billion in 2015 to $12 billion last year.

     

    The increase may draw attention from lawmakers who have been critical of the Fed paying money to large commercial institutions. The central bank argues that the payments are its most effective way to push rates higher: by offering interest on excess reserves, the Fed forces banks to raise the rate at which they are willing to lend to each other.

    In the last 15 years, The Fed has handed over $880 billion to The Treasury…

    Source: The Fed

    As is clear in the chart above, a decade ago, back when the Fed was a smaller size, Fed remittances were fairly steady, in the neighborhood of $20 billion a year. This all changed after 2008 as the Fed’s Quantitative Easing programs increased the amount of interest-earning assets that would generate funds to transfer back to the Treasury.

    Big Bucks for the US Treasury

    For the US Treasury, Fed remittances are something of a free lunch. When someone buys a Treasury bond, the government must pay them interest. This applies to the Fed as well, but then at year-end the Fed remits the interest back to the Treasury.

    As we noted previously, in more “normal” times (i.e., prior to 2008) around 7 percent of the Treasury’s interest payments were paid back to it by the Fed. This figure has grown to over three times that amount over the past few years…

    Implications for Fed “Independence”

    As much as economists talk about the independence that the Fed holds from Congress, these remittances represent a strong link. In fact, since they enable federal spending they create a form of quasi-fiscal policy for the Fed to use, in addition to its more common monetary policy options.

    Consider that since Treasury debt is almost never repaid in net terms (old issues are retired but replaced with new debt issuances), the true cost of financing the US government’s borrowing is not the gross amount of debt outstanding but the annual interest expense it faces. Viewed this way, nearly half of the Treasury’s borrowing was financed by the Fed last year. Absent these Fed remittances, Congress would need to look at either an alternative funding source (though I am not sure how many takers there are for the Fed’s $2.5 trillion Treasury holdings) or make some serious cuts.

    How serious? NASA’s operating budget was roughly $18 billion last year, so a lack of Fed remittances would cause the Treasury to cut around five NASA-sized programs. Alternatively, the governments Supplemental Nutrition Assistance Program (previously known as “food stamps”) cost $70 billion in 2014. Without the Fed’s remittances, Congress would have to stop paying out all food stamp recipients plus it would be forced to defund almost two NASAs.

    More important in many Americans’ hearts is their monthly social security check. In 2014, $830 billion of social security checks were mailed out. Without Fed remittances, retirees might see their monthly check cut by about 12 percent.

    For those concerned with the burgeoning size of the federal government, putting a stop to Fed remittances would put a serious dent in public finances and force some serious thought as to what programs need to be cut.

  • Taiwan Scrambles Jets, Navy After Chinese Aircraft Carrier Group Enters Taiwan Strait

    While much of America was preparing to listen to Obama speak one final time, the Chinese had far less lofty ambitions, and on Wednesday morning Beijing sent a group of Chinese warships led by China’s sole aircraft carrier north through the Taiwan Strait, resulting in Taiwan scrambling jets and navy ships in the latest sign of heightened tensions between China and the self-ruled Taiwan.

    According to Reuters, The Soviet-built Liaoning aircraft carrier, returning from exercises in the South China Sea, was not trespassing in Taiwan’s territorial waters but entered its air defense identification zone (ADIZ) in the southwest, Taiwan’s defense ministry said.


    China’s Liaoning aircraft carrier conducts a drill in an area of South China Sea,
    in this undated photo taken December, 2016

    As a result Taiwan scrambled jets and navy ships to “surveil and control” the passage of the Chinese ships through the narrow body of water separating Taiwan and China. “We have full grasp of its movements,” Taiwan defense ministry spokesman Chen Chung-chi said.

    The defense ministry spokesman added that the Taiwanese military aircraft and ships have been deployed to follow the carrier group, which is sailing up the west side of the median line of the strait.

    Previously, China has said the Liaoning aircraft carrier was on drills to test weapons and equipment in the disputed South China Sea and its movements comply with international law.

    As Reuters adds, the latest Chinese naval exercises have unnerved Beijing’s neighbors, especially Taiwan which Beijing claims as its own, given long-running territorial disputes in the South China Sea. China claims most of the energy-rich waters of the South China Sea, through which about $5 trillion in ship-borne trade passes every year. Neighbors Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

    While China traditionally distrusts Taiwan, and especially the new President Tsai Ing-wen, it has has stepped up pressure on her following a protocol-breaking, congratulatory telephone call between her and U.S. President-elect Donald Trump last month.

  • 4Chan Claims To Have Fabricated Anti-Trump Report As A Hoax

    In a story that is getting more surreal by the minute, a post on 4Chan now claims that the infamous “golden showers” scene in the unverified 35-page dossier, allegedly compiled by a British intelligence officer, was a hoax and fabricated by a member of the chatboard as “fanfiction”, then sent to Rick Wilson, who proceeded to send it to the CIA, which then put it in their official classified intelligence report on the election.

    Here is 4Chan’s explanation of how the story came to light:

    >/pol/acks mailed fanfiction to anti-trump pundit Rick Wilson about trump making people piss on a bed obama slept in

    >he thought it was real and gave it to the CIA

    >the central intelligence agency of the united states of america put this in their official classified intelligence report on russian involvement in the election

    >donald trump and obama have both read this pol/acks fanfiction

    >the cia has concluded that the russian plans to blackmail trump with this story we made up

    just let that sink in what we have become.

     

    And a summary posted on pastebin:

    On january 10, Buzzfeed posted a story under the byline of Ken Bensinger, Mark Schoofs and Miriam elder titled “these reports Allege Trump Has Deep Ties To Russia” and posted a link to a document alleging, among other things, that russia has been cultivating trump for 5+ years, that trump has been in constant contact with the kremlin for information on his opponents, and perhaps most inflammatory, that there are many recorded instances of blackmail of trump in sexual misconduct. A prominent claim is that trump rented the presidential suite of the Ritz Carlton Hotel in moscow, where he knew that the Obamas had slept in; he them hired a number of prostitutes to perform a ‘golden shower’ (pissplay) on the bed and in the room. https://www.buzzfeed.com/kenbensinger/these-reports-allege-trump-has-dee…
    https://assets.documentcloud.org/documents/3259984/Trump-Intelligence-Al…

     

    Noted #nevertrump voice Rick Wilson later commented on twitter, stating that the report “gave a new meaning to Wikileaks” (https://twitter.com/TheRickWilson/status/818982395202379777) and that the report was the reason everybody was fighting so hard against the election of Trump. (https://twitter.com/TheRickWilson/status/818983514335047680)

     

    The remarkable thing? It’s all fake. And not only fake; it’s a prank perpetuated by 4chan, on Rick Wilson himself. A post on 4chan on october 26 stated “mfw managed to convince CTR and certain (((journalists))) on Twitter there’ll be an October surprise on Trump this Friday” along with a picture of a smug face with a hash name. http://archive.4plebs.org/pol/thread/94704894/#94705224

     

    on november 1, a person without a picture but is assumed to be the same person posted “So they took what I told Rick Wilson and added a Russian spy angle to it. They still believe it. Guys, they’re truly fucking desperate – there’s no remaining Trump scandal that’s credible.” https://archive.4plebs.org/pol/thread/95568919/#95571329

     

    on january 10, moments after the story broke and began to gain traction on social media, a person with the same smug grin face, and the same hash title for the picture, stated “I didn’t think they’d take it so far.” http://boards.4chan.org/pol/thread/106514445#p106520376

     

    This story has taken on something of a life of it’s own. Going through Rick Wilson’s twitter, you can find many different stories from the time that he had shown the story to a wide number of anti-trump news sources, trying to find a news organization that would actually publish the story. During that time period, he referred to it often as ‘the thing’, and often playing coy with followers on the content with the story with anybody who was not also a #Nevertrumper. Unconfirmed sources has people as high up as John McCain giving the story to FBI Director James Comey to attempt to verify the story. Given that Rick Wilson runs in Establishment circles, it is not an impossible scenario that long-serving senators are falling for what amounts to a 4chan troll trump supporter creating an ironic October Surprise out of wholecloth to punk a GOPe pundit who derogatorily referred to them as single men who masturbate to anime.

    While this entire incident is laughable, and even more so if the 4Chan account is accurate, what makes it quite tragic, is that it is no longer possible to dismiss the “fake news” angle to an intelligence report. And if the CIA is compromised, what is left for “news outlets” like CNN and BuzzFeed, which were all too eager to run with the story without any attempt at verification?

  • Hungary To Launch Crackdown On All George Soros-Funded Organizations

    In a dramatic example of blowback against the establishment in the post-Trumpian world, Hungary announced it plans to crack down on non-governmental organizations linked to billionaire George Soros now that Donald Trump will occupy the White House, according to the deputy head of Prime Minister Viktor Orban’s party, cited by Bloomberg.

    The European Union member, and native country of Soros, will use “all the tools at its disposal” to “sweep out” NGOs funded by the Hungarian-born financier, which “serve global capitalists and back political correctness over national governments,” Szilard Nemeth, a vice president of the ruling Fidesz party, told reporters on Tuesday. No one answered the phone at the Open Society Institute in Budapest when Bloomberg News called outside business hours.

    “I feel that there is an opportunity for this, internationally,” because of Trump’s election, state news service MTI reported Nemeth as saying. Lawmakers will start debating a bill to let authorities audit NGO executives, according to parliament’s legislative agenda.

    As a reminder, Orban was the first European leader to publicly back Trump’s campaign, and was reportedly invited by Trump to visit the US; he has ignored criticism from the European Commission and U.S. President Barack Obama’s administration for building a self-described “illiberal state” modeled on authoritarian regimes including Russia, China and Turkey. In 2014, Orban personally ordered the state audit agency to probe foundations financed by Norway and said that civil society groups financed from abroad were covers for “paid political activists.” As a result of Trump’s victory, Orban has felt empowered to further last out against Europe’s established structures, and its core supporters.

    As Bloomberg notes, Orban and his administration have repeatedly singled out NGOs supported by Soros, a prominent Hillary Clinton and Democratic Party supporter, with a wide network of organizations that promote democracy in formerly communist eastern Europe.

    Orban is not alone: Trump has also accused the 86-year-old billionaire of being part of “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.” In a pre-election commercial, he showed images of Soros along with Federal Reserve Chair Janet Yellen, and Goldman Sachs Group Inc. CEO Lloyd Blankfein, all of whom are Jewish. The Anti-Defamation League criticized the ad for touching on “subjects that anti-Semites have used for ages.”

    Since then things have changed, however, and Trump has retained the services of two prominent Goldman alumni, Steven Mnuchin and Gary Cohn, to serve on his administration. His current thinking on George Soros is unknown.

  • Live Stream: Obama Says Farewell; Reminds Us One Last Time How Awesome He Is

    Once again parting with Presidential tradition, rather that delivering his farewell speech from the oval office, the ever so humble Obama has decided to give his final address to the American people from his home town of Chicago.  And, like his 2008 speech at the Democratic National Convention in Denver, we're certain this will be a glorious event complete with a slew of celebrities and all the pomp and circumstance befitting a king…rest assured that no taxpayer expense was spared.

    While the content of Obama's remarks have not been revealed, earlier today he posted the following preview on Facebook which noted that he looks forward to going back to "where it all started" and humbly affirmed that he's "made America a better, stronger place for the generations that will follow."

    For Michelle and me, Chicago is where it all started. It’s the city that showed us the power and fundamental goodness of the American people.

     

    It’s that inherent strength that brought our country through our fair share of challenges these last eight years. Because of you, we’ve come through them stronger. Because of you, we’ve held to a belief that has guided us ever since our founding – our conviction that, together, we can change this country for the better.

     

    It’s easy to lose sight of that in the blizzard of our minute-to-minute Washington news cycles. But America is a story told not minute to minute, but generation to generation – a story written by parents, and teachers, and veterans, and neighbors who’ve taken on the call of citizenship, working together, without fanfare, to form a more perfect union.

     

    Over the course of my life, I’ve been reminded time and again that change can happen – that ordinary people can come together to achieve extraordinary things. And I’ve seen that truth up close over these last eight years.

     

    We’ve made America a better, stronger place for the generations that will follow. We’ve run our leg in a long relay of progress, knowing that our work will always be unfinished. And we’ve reaffirmed the belief that we can make a difference with our own hands, in our own time. That’s the imperative of citizenship – the idea that, with hard work, and a generous heart toward our fellow Americans, people who love their country can change it.

     

    So tonight, I’m returning to where it all began to offer my most grateful farewell to the American people. I hope you’ll join me – I want to thank you for everything you’ve done.

    And while Obama will undoubtedly brag about his amazing "economic recovery," we would once again highlight the following data that seemingly paints a slightly more sobering picture.

    Harvard

     

    Of course, these charts that we presented last summer also cast a slight shadow over Obama's "economic recovery." 

     

    Unfortunately for Obama, simply stating something repeatedly doesn't actually make it a fact. 

    And speaking of repeating fictitious stories until they somehow become fact, as Post News pointed out yesterday, for weeks now Obama and his various mouthpieces have been peddling the fiction that his administration managed to spend 8 years in the White House without a single major scandal.  And while that would be a fantastic accomplishment, unfortunately it's every bit as "fake" as the Obama "economic recovery."  In fact, here are just a few of the scandals that plagued the Obama administration over the years (a detailed description of each can be viewed here).

    • Iran Nuclear Deal and Ransom Payment
    • NSA Spying
    • Benghazi
    • Operation Fast and Furious
    • Eric Holder – First Attorney General Ever Held In Contempt Of Congress
    • IRS Targeting Of Conservative Groups
    • Bowe Bergdahl
    • The Great “Stimulus” Heist
    • Solyndra
    • Spying On Journalists
    • VA Death-list Scandal

    Finally, since Obama will undoubtedly use his pedestal tonight to defend his one crowning piece of legislation, in a last-ditch effort to save it from being repealed by the incoming Trump administration, we leave you with the following charts displaying the epic collapse of Obamacare in just 1 year as insurers pulled out of exchanges all around the country in 2017 leaving Americans with minimal insurance options and substantially higher premiums.

     

    2016 healthcare insurance carriers by county:

    Obamacare 2016

     

    2017 healthcare insurance carriers by county:

    Obamacare 2017

     

    With that intro, here is Obama's farewell speech for your viewing pleasure:

     

  • China's Exorbitant Detriment (Mirror Image Of America's Exorbitant Privilege) Is Costing It Dearly

    Submitted by Benn Steil and Emma Smith via The Council on Foreign Relations,

    The so-called Exorbitant Privilege of the United States, the power to conjure the world’s primary reserve currency, is reflected in the unique combination of being deeply in debt to the rest of the world (that is, having a massive negative net international investment position, or NIIP) while earning far more income abroad than it pays out in interest (that is, having massive positive annual net investment income, or NII).  The U.S. NIIP averaged negative $7.5 trillion over FY15/16, while its NII was positive $167 billion, as shown in the top left of the graphic below.  Basically, foreigners are willing to accept a trivial return to hold dollar-denominated assets.

     

    Far less well known is the mirror-image of the Exorbitant Privilege, or what we might call the Exorbitant Detriment.

    It is, not surprisingly, borne by China.  It is, to some extent, the price the country bears as the world’s largest holder of dollar-denominated central bank reserves.  Reserves account for half of China’s foreign assets, of which around 40 percent are invested in low-yielding U.S. Treasury securities.  But it also reflects the fact that China is lending to the rest of the world at paltry rates.  Chinese government institutions lend to Chinese, as well as foreign, firms operating abroad far more cheaply than alternative lenders. This reflects the Chinese government’s efforts both to subsidize its companies and to strengthen economic ties with resource-rich countries in, for example, Africa and Latin America.  China’s Exorbitant Detriment is reflected in an NIIP of $1.6 trillion and NII of negative $80 billion in FY15/16.

    Can China continue supporting its Exorbitant Detriment indefinitely?

    Not if it wants to prioritize a halt to reserve sales, which have been necessitated by capital outflows.  Negative investment income reduces the current account surplus, and therefore the amount of capital that can leave the country before the central bank has to match outflows with reserve sales. If China’s investment income balance had been zero over FY15/16 it would, all else being equal, have been able to absorb an additional $80 billion of capital outflows before having to sell reserves.  This is equivalent to 17 percent of the actual decline in reserves over this period.  China’s reserves fell to $3 trillion in December and, as we pointed out in an earlier post, could actually fall to what the IMF reserve-analysis rubric would deem dangerously low levels by summer if outflows continue at the pace seen over the last three months.  China can slow this decline by demanding higher returns on its lending abroad, but this will require sacrificing its efforts to subsidize its companies as well as those aimed at putting dollars to the service of geostrategic objectives.

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