• We All Lose: Obama's Legacy And What It Means For A Trump Presidency

  Submitted by John Whitehead via The Rutherford Institute,

  “This light of history is pitiless; it has a strange and divine quality that, luminous as it is, and precisely because it is luminous, often casts a shadow just where we saw a radiance; out of the same man it makes two different phantoms, and the one attacks and punishes the other, the darkness of the despot struggles with the splendor of the captain. Hence a truer measure in the final judgment of the nations. Babylon violated diminishes Alexander; Rome enslaved diminishes Caesar; massacred Jerusalem diminishes Titus. Tyranny follows the tyrant. Woe to the man who leaves behind a shadow that bears his form.” ? Victor Hugo, Les Misérables

  Let’s talk about President Obama’s legacy, shall we?

  This was a candidate who was ushered into office promising hope and change, pledging to put an end to the endless wars that were bankrupting the country (he was actually awarded the Nobel Peace Prize in anticipation of his efforts to bring about world peace), and vowing to put an end of the corporate revolving door that had turned our republic into an oligarchy.

  After eight years in office, Barack Obama leaves our nation with a weakened Constitution that has been dealt one crippling blow after another by court rulings and government overreach, with more militarized police empowered to shoot first and ask questions later, with more SWAT team raids, with more government corruption, with more debt than ever before ($19 trillion and rising), with more racial tensions bubbling over into confrontations, with even greater surveillance intruding into the privacy of the citizenry, with less tolerance for free speech and thought, with taxpayers groaning under the weight of even more taxes disguised as fines and fees, with a more “imperial” president empowered to act unilaterally through the use of signing statements and executive orders, with a greater risk of blowback from military occupations, drone strikes and endless wars abroad, and with a citizenry more broken and oppressed than ever.

  In other words, Obama leaves our nation worse off than when he took office.

  You won’t hear any of this from Obama, who believes he would have been re-elected had he been permitted to run for a third term. Nor will you hear it from the celebrities who are quick to sing Obama’s praises, while likening Donald Trump to Hitler. And you certainly won’t hear it from those who are staging sit-ins, marches and acts of civil disobedience to protest Trump’s election, while having failed to voice even a whisper of protest over Obama’s long list of civil liberties abuses.

  Yet the reality we must contend with is that the world is a far more dangerous place today than it was eight years ago, and Obama must shoulder some of the blame for that. As President Harry S. Truman recognized, “The buck stops here.”

  How did we come to this?

  How did a politician who showed such potential and managed to ignite such positive feelings among the citizenry, young and old alike, go from being a poster child for hope and change to being the smiling face of a government that is blind, deaf and dumb to the needs of its citizens?

  Let me answer my own question in a roundabout way by quoting something Meryl Streep said recently in her recent Golden Globe acceptance speech.

  Ostensibly taking aim at Trump for imitating a disabled reporter, Streep declared: “This instinct to humiliate, when it’s modeled by someone in the public platform, by someone powerful, it filters down into everybody’s life, because it kind of gives permission for other people to do the same thing. Disrespect invites disrespect. Violence incites violence. And when the powerful use their position to bully others, we all lose.”

  Streep is right in one sense.

  We all lose when the powerful inflict violence, humiliation, disrespect on others.

  However, where Streep goes wrong is in failing to recognize that “we the people” have been on the losing end of this relationship long before Trump’s name was even being batted about as a possible candidate for the White House.

  Indeed, the agents of the Obama administration—many of whom belong to that permanent government bureaucracy that is unaltered by elections and flows in a continuous line from one president to another—have been consistently and persistently inflicting violence, humiliation and disrespect on the citizenry for the past eight years.

  Every time a SWAT team funded by government grants crashes through a door, that’s an infliction of violence. Every drone strike that kills innocent civilians is inflicting violence on the less powerful. Every roadside stop that ends with an unwarranted strip search is inflicting humiliation on the less powerful. Every law that criminalizes the speech or activities of those whose views may not jibe with the mainstream is tantamount to government-sanctioned bullying.

  So for those lamenting the perils of a Trump presidency, who have been quick to blame racism, sexism and even the Russians for Trump’s electoral victory, you might want to consider the old Native American proverb that says “every time you point a finger in scorn—there are three remaining fingers pointing right back at you.”

  As civil rights activist Cornel West concluded, “The reign of Obama did not produce the nightmare of Donald Trump – but it did contribute to it. And those Obama cheerleaders who refused to make him accountable bear some responsibility.”

  West goes on to document the many missteps that contributed to Obama’s failed legacy: his allegiance to Wall Street, the drone strikes that have killed innocent civilians, the demonization of whistleblowers, the killing of U.S. citizens without due process, and his refusal to hold police accountable for excessive force and civil rights violations among others.

  As West writes for The Guardian:

  “[T]he mainstream media and academia failed to highlight these painful truths linked to Obama. Instead, most well-paid pundits on TV and radio celebrated the Obama brand. And most black spokespeople shamelessly defended Obama’s silences and crimes in the name of racial symbolism and their own careerism. How hypocritical to see them now speak truth to white power when most went mute in the face of black power. Their moral authority is weak and their newfound militancy is shallow.”

  Let me also say that this is not only an indictment of all that Obama has failed to do in the past eight years. It is also an indictment of those administrations prior to Obama, Democrat and Republican alike, which have contributed to our present sorry state of affairs. And it is a warning to Trump as he begins to carve out a path for his own administration.

  Every time I write one of these diatribes about the government, I’m always asked “what can I do to push back against the government?”

  My answer, which I flesh out in greater detail in my book Battlefield America: The War on the American People, is always the same: When all is said and done, politicians are only as effective, trustworthy and accountable as they are made to be. And they are only made to be effective, trustworthy and accountable when the citizenry stays engaged, informed and active in the workings of government.

  One of the best models I know for a citizen who took the duties of citizenship to heart every moment of the day was my good friend, mentor and hero Nat Hentoff—one of the nation’s most respected, controversial and uncompromising writers and a lifelong champion of the First Amendment—who passed away on Saturday, January 7, 2017, at the age of 91.

  Nat was a radical in the best sense of the word, a feisty, fiercely loyal, inveterate freedom fighter and warrior journalist with a deep-seated intolerance of injustice and a love of America that weathered the best and worst this nation has had to offer.

  Nat didn’t live to see the last days of Obama’s reign, but he saw enough to describe the nation’s 44^th president as “possibly the most dangerous and destructive president we have ever had.” A few years back, I asked Nat how he maintains his optimism in the face of the constant barrage of discouraging news about government corruption, civil liberties abuses, war, etc.

  I’ll end with Nat’s answer as he inscribed it in the foreword to my book A Government of Wolves: The Emerging American Police State:

  Government officials like to claim that everything they are doing is for security, to keep America safe in the so-called war against terrorism. What they are really effectuating is a weakening of why we are Americans. A lot of Americans today have a very limited idea as to why they are Americans, let alone why we have a First Amendment or a Bill of Rights. People are becoming accustomed or conditioned to what's going on now with the raping of the Fourth Amendment, for example. Too many Americans appear unconcerned about the loss of fundamental individual liberties—such as due process, the right to confront their government accusers in a courtroom, and the presumption of innocence—that are vital to being an American.  Yet the reason we are vulnerable to being manipulated by the government out of fear is that most of us do not know and understand our liberties and how difficult it was to obtain them and how hard it is to keep them.

   

  I have spent a lot of time studying our Founders and people like Samuel Adams. What Adams and the Sons of Liberty did in Boston was spread the word about the abuses of the British. They had Committees of Correspondence that got the word out to the colonies. We need Committees of Correspondence now. The danger we now face is admittedly greater than any we have had before. If I were to judge what I do and write on the basis of optimism, I would probably go back to writing novels, but I figure you have to do what you feel you have to do and just keep hoping and trying to get people to understand why we are Americans and what we are fighting to preserve.

  

  

• Venezuela Hikes Minimum Wage By 50% "Due To Economic War And Mafia Attacks"

  With (hyper)inflation expected to hit 1,660% this year and 2,880% next, Venezuela's President Maduro hiked the minimum wage another 50% on Sunday, the fifth increase in the past year (for a total annualized increase of 536%), to help shield workers from 'economic war'.

  

  As Reuters reports, the measure puts the minimum monthly salary at 40,683 bolivars – about $60 at the weakest exchange level under the state's currency controls, or $12 at the black market rate.

  "To start the year, I have decided to raise salaries and pensions," he said on his weekly TV and radio program.

   

  "In times of economic war and mafia attacks … we must protect employment and workers' income," added Maduro, who has now increased the minimum wage by a cumulative 322 percent since February 2016.

   

  The 54-year-old successor to Hugo Chavez attributes Venezuela's three-year recession, soaring prices and product shortages to a plunge in global oil prices since mid-2014 and an "economic war" by political foes and hostile businessmen.

   

  But critics say his incompetence, and 17 years of failed socialist policies, are behind Venezuela's economic mess.

   

  They say the constant minimum wage hikes symbolize Maduro's policy failures and fail to keep pace with real on-the-street price rises.

  Fox News also notes that Venezuela's biggest employer, Fedecamaras, said that the pay increase was announced "without consultation" by the government and could reduce employment and result in the closure of companies that cannot deal with the hike.

  And while the black market Bolivar rallied briefly as the bank-note ban debacle was put in place, the currency's street worth is collapsing once again…

  

  But, as The Washington Post reports, while the government has been able to censor the country’s main newspapers, so you won’t read much about crime in the media, death is one of the few guaranteed things you can find in Venezuela.

  There are no official tallies of deaths related to violence, but some NGOs put last year’s national death toll as high as 24,000, which would make a total of 252,000 deaths since the revolution came to power 17 years ago.

   

  There are an estimated 200,000 members of the Venezuelan security forces, but it doesn’t seem like that is enough.

   

  

   

  Violence permeates everyday life here. In the streets, gangs clash with one another, with the police and with the army. Sometimes, police even clash among themselves. All of these factions wield power and abuse it. Caught in the middle of all of this, ordinary citizens buy guns to protect themselves. Whether it’s the loss of a friend or a relative, everyone here has been touched by violence. Death is in the air.

   

  

   

  Venezuela is a country that seems to be at war with itself. It’s not always clear who is who. It’s hard to know who to trust or who your enemy is, so you’re always looking over your shoulder, waiting for the next blow, unsure of where it will come from. Violence has so saturated life here that people have begun to see it as normal.

   

  

   

  Read more here…

  

  

• CNN Is Now Least Trusted News Network Among Viewers

  Via TheAntiMedia.org,

  A recent poll of cable news network viewers found that CNN’s regular audience is far more skeptical of the political news they receive than Fox News fans.

  In the poll published Wednesday by Rasmussen Reports, 1,000 likely voters were asked to describe their media viewing habits. Seventy-five percent said they watch at least some form of cable news each week, with 42 percent saying they most frequently watch Fox News, 35 percent usually choosing CNN, and 19 percent favoring MSNBC.

  An even 50 percent of frequent Fox News viewers agreed with a followup question, “Do you trust the political news you are getting?” By comparison, 43 percent of frequent MSNBC viewers and just 33 percent of those who mostly watch CNN said they trust their political news.

  According to a November survey by Rasmussen, 37 percent of voters still say they get most of their news from cable news networks. Voters in general were highly critical of the election coverage, with the strongest criticism coming from the 7 percent of those polled who said they mostly get their news from social media, rather than TV.

  While once considered a pioneer of 24-hour TV journalism, CNN has faced criticism and accusations of bias over its political news coverage. During the 2016 election cycle, some viewers and analysts claimed CNN focused too much attention on the candidacy of Donald Trump, even to the point that it negatively impacted other candidates. Trump’s former campaign manager, Corey Lewandowski, worked at CNN for months as an on-air personality while maintaining notably close ties to the candidate.

  In April, Bernie Sanders supporters protested outside of CNN’s offices in Hollywood, claiming the network’s reporters ignored their candidate. In October, CNN cut ties with frequent contributor-turned-interim Democratic National Committee Chair Donna Brazile after WikiLeaks’ archive of Hillary Clinton’s emails revealed Brazile gave Clinton advance notice of debate questions.

  Since the election, CNN has been quick to embrace President-elect Trump. On Dec. 2, CNN reporter Cristina Alesci praised Trump’s advisory board of wealthy CEOs, calling it a “historic” gathering. She continued:

  “I don’t think that I’ve ever seen anything quite like this before. … Like I said before, this list really represents a bipartisan group of people, so he’ll have some very diverse viewpoints to tap into.”

  The president-elect has surrounded himself with a cadre of wealthy advisors and Cabinet members, prompting many critics to question just how much diversity they’ll actually bring to the table. “The very definition of corporate media diversity: the entire spectrum of opinion, from GE to GM,” quipped Steve Rendall, a reporter for the media analysis organization Fairness and Accuracy in Reporting, on Dec. 2.

  In September, FAIR also accused CNN of spreading a false claim about Black Lives Matter protests being stoked by “outside agitators” in Charlotte, North Carolina, which quickly went viral among conservatives.

  From their close ties to politicians to the apparent agendas pushed by paid pundits, viewers are wise to question the political news they receive from any major TV news network.

  

  

• Redneck Investin Part 5 – Muny over Yonder

  Many investors who aren’t ECP simply can’t access decent strategies for investing and practically, if you only have $100,000 to invest, it’s really not worth it in today’s world (better to ‘invest’ in your own living conditions, vehicle, tools, and other things you might actually need).  You don’t need to be a redneck to follow these simple rules, but if you want to run a ‘redneck check’ on yourself, here’s a list of signs you might be a redneck IF:

  1) Your neighbor dug a big hole in his backyard he calls a ‘mud hole’ which is used on weekends.  He fills it with water and lets it sit for days, creating a ‘mud soup’ and then invites his friends over with their trucks as they drive through it one by one, until one turns over or the engine dies.

  2) Your other neighbor burns their garbage, plastic bags and all.  

  3) You need a monster truck to access your property.

  4) You don’t have a bank account because you ‘don’t trust them suns a bitches.’

  5) You’ve invested more than 50% of your yearly disposable income in your truck.

  Not all southerners are rednecks – here’s a good comparison about the differences between ‘southern’ and ‘redneck’:

  • Southern: Eating honeysuckle
  • Redneck: Chewing tobacco
  • Southern: Playing barefoot outside with your friends as a kid
  • Redneck: Going to the grocery store barefoot
  • Southern: Having a truck
  • Redneck: Having any of the following on your truck: a lift kit, a Confederate flag, or any sticker that talks about guns, has the word “pussy”, or actually labels you as a “redneck”.
  • Southern: Food with a lot of butter
  • Redneck: Food with a lot of mayonnaise
  • Southern: Common family nicknames include “Junior” and “Sissy”
  • Redneck: Common family nicknames include “Bubba” and “Buzz”
  • Southern: Cracker Barrel
  • Redneck: Golden Corral
  • Southern: Elvis, Johnny Cash, The Allman Brothers, Lynard Skynard
  • Redneck: David Allan Coe, Toby Keith, Trace Adkins
  • Southern: Having pecan pie crumbs on your mouth
  • Redneck: Missing teeth from your mouth
  • Southern: Having at least one relative (even if distant and you’ve met them once) who owns horses
  • Redneck: Having at least one relative who’s had sex with a horse
  • Southern: Having an innocent crush on one of your cousins as a kid
  • Redneck: Doing literally anything about that crush
  • Southern: Tailgating before a game
  • Redneck: Tailgating without having tickets to the game and watching it on a TV in the parking lot
  • Southern: Sweet tea
  • Redneck: Mountain Dew
  • Southern: Drinking moonshine borderline ironically on special occasions like weddings or weekend trips to the mountains
  • Redneck: Consuming moonshine regularly like it’s not even a thing 

  So here’s part 5 in our series Redneck Investin’ – for the ‘other’ America:

  Ways to get money, food, a place to live, and other highlights of life in USA

  Free Cash – Sites like Free Money Claims www.freemoneyclaims.com , www.pleaseorderit.com/free – and many others, offer the ability to get free money.  Who doesn’t like free money?  Yes, it can be a big waste of time.  But you’ve got plenty of time – you’re unemployed, on the dole, and Wrastlin’ doesn’t come on for another 3 hours!

  Food Stamp Arbitrage – THIS IS ILLEGAL – DO NOT TRY THIS AT HOME.  Many rednecks trade food stamp products for cash at a huge discount, sometimes even 50%.  But they have no choice, as who else is going to pay them for 100 cases of Coca Cola but their local Quik-e-mart.  

  Panhandling – THIS IS ILLEGAL – DO NOT TRY THIS AT HOME.  You know the best parking lots, the best clothes to wear – to evoke that human nature in people.  Make that man shell out all the cash in his wallet, because he feels bad for you.  Keeping the family in the car is a big plus!  Take his plastic too.  DISCLAIMER – Sadly, these untrained panhandlers would fare better on Wall St. where they would be paid millions to do the same job but in a different context.

  Friends are for MUNY – Rednecks have no shame to just flat out ask you for money.  If you refuse for a reason such as ‘I don’t use cash’ they offer a host of solutions such as ‘oh you can write me a check, thanks.’  There’s not a friend they won’t abuse with this question but it’s also a bit of a ‘redneck test’ because if you are a true redneck, you’d ask the friend first.

  Craigslist FREE – Really, the average person would be shocked what people give away on Craigslist.  Here in the south, it’s common to find things like Televisions, Wood crates, furniture, couches, cats, bicycles, and other stuff completely free.  People just want to get rid of their junk.

  Metal Scrapin’ – Dismantling America’s dwindling infrastructure one railroad tie at a time.  This can be an environmentally friendly and profitable hobby if done LEGALLY.  If you ASK people they will often have metal you can take with their permission for FREE – such as old appliances, old excercise equiptment, shopping carts, wheelchairs, all kinds of stuff.  Stealing metal is illegal and potentially dangerous, every year in the South there are at least a small handful of deaths or near deaths of copper wire theives getting electrocuted, and in LA too.  Even though the price of scrap metal is near an all time low – they still pay.  Haul it over to the yard!

  For more on this series, see:

  Redneck Investin Part 4 – Free on the Fringe

  Redneck Investin Part 3 – Get R Dun

  Redneck Investin Part 2 – The evolved Redneck – READ before RIOT 

  Redneck Investin Part 1 – A look from the other side

  If you order stuff online, checkout PleaseOrderIt.com which provides special discounts, savings, coupons, and free stuff too!  For a guide to the markets and how to survive with only a small amount to invest, checkout Splitting Pennies only $6.11 on Amazon.

  

  

• State Department Says Presenting Evidence Of Russian Hacking Would Be "Irresponsible"

  One recurring lament throughout the theatrically dramatic campaign involving reports and emotional appeals by US intelligence agencies such as the CIA (whose primary function is the creation of disinformation) to ordinary Americans, that Russia had “hacked the US presidential election” is that for all the bluster and “conviction”, there has been zero evidence.

  And, as it turns out, there won’t be any, because according to the US State Department, US intelligence agencies were right to not reveal evidence of their proof that Russia interfered in US elections, and comparisons with intelligence reports that Iraq had WMDs were not relevant in the current year.

  Asked by RT’s Gayane Chichakyan if Friday’s public intelligence report should have contained any proof of Russian intervention, State Department spokesman John Kirby said that no one should be surprised that US intelligence agencies were keeping evidence secret in order to protect sources and methods.

  “Most American people understand that they have the responsibility to protect their sources and methods,” Kirby said, adding it would be “irresponsible” to do otherwise. Actually, with the Iraq WMD fiasco strill fresh in “American people’s” minds, it is irresponsible to think most Americans are still naive idiots who will believe whatever the “intelligence agencies” will tell them.

  Alas, none of that has filtered through to the appropriate authorities, and Kirby said that it was “up to the agencies to decide which information they share with the public. We rely on them to make that determination for themselves.” And, in this case, it meant sharing no information at all.

  The assessment in Friday’s report was made “by all 17 intelligence communities. All of them came to the same basic conclusion: that Russia interfered in the US election,” Kirby said. “All of our intelligence communities came to the same basic conclusion, over and over again.”

  They just couldn’t prove it, instead hoping that by repeating the same statement over and over would be sufficient.

  Furthermore, the actual report, describes itself as an “analytic assessment drafted and coordinated among The Central Intelligence Agency (CIA), The Federal Bureau of Investigation (FBI), and The National Security Agency (NSA).”

  Russian President Vladimir Putin and his government “aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him,” the agencies assert in the report, noting that the CIA and FBI have “high confidence” in this judgment, while the NSA – which, in theory, would have actual surveillance data to prove the assertion – had only “moderate” confidence.

  Secretary of State John Kerry “believes strongly that they handled this matter in the appropriate way, in terms of how it was analyzed, how it was presented, and how it was briefed to those who needed to see a deeper level of information,” Kirby said.

  When Chichakyan brought up the 2003 intelligence assessment on the Iraqi weapons of mass destruction – invoked by the Bush administration to justify the US invasion and occupation of that country – Kirby said the comparison was irrelevant, since that was a long time ago.

  “We have moved on. We have learned a lot from those mistakes,” he said.

  Ironically, somehow much of America ended up with the opposite conclusion.

  

  

• Trump Backs Delay Of Obamacare Repeal After Pressure From Rand Paul

  As we reported earlier today, while many items on the Trump agenda for both the “first day” and the rest of 2017, could take a substantial amount of time and effort before they are legislated and implemented, one thing that there was virtually unanimous consensus on, was that Trump would immediately launch the repeal of Obamacare, even if replacing the Affordable Care Law would take considerably longer (as it would require bipartisan support). 
  
  

  However, it now appears that even the prompt repeal of Obamacare is in question as Trump has now backed waiting to repeal the Affordable Care Act until a replacement proposal is in hand, following in a Friday night phone call with Rand Paul, the Kentucky Republican said Monday, adding to momentum for changing GOP leaders’ strategy on dismantling the 2010 health-care law.

  Paul has emerged a vocal leader of a growing group of Republican senators expressing concerns with GOP plans to vote to repeal the health law early this year, then to hammer out over weeks or months what would replace it after a two- to three-year transition. Cited by the WSJ,  Paul said in an interview “I believe we should vote on replacement the same day we vote on repeal,” and added that Trump called the senator on Friday night “to say he agrees completely.”

  As the WSJ adds, a Trump transition official confirmed that the incoming president spoke with Mr. Paul on Friday, and said meetings are under way to determine how a replacement law could be approved at the same time—or close to it—that a repeal of the law is approved. Last week, Trump personally warned congressional Republicans on Twitter to “be careful” about the political consequences of moving quickly to repeal the law.

  The push from both Trump and Paul, as well as at least five other GOP senators, will put pressure on Republican leaders to accelerate the process of crafting a unified GOP replacement plan. Republicans have proposed dozens of ideas over the years for overhauling the health-care system but have yet to coalesce around a plan.

  In other words, in a shift on a popular Nency Pelosi statement, the Republicans “will not repeal it eventually come up with a replacement“, but will do both at the same time. The question now is how long such a unified process could take.

  Senate Majority Leader Mitch McConnell, who met with Mr. Trump in Trump Tower on Monday morning, appeared to indicate Sunday that Republicans were accelerating the process of settling on a replacement plan.

   

  “We will be replacing it rapidly after repealing it,” the Kentucky Republican said Sunday on CBS. He wasn’t specific about the timing of the drafting of a new health-care system, or what it would entail, but he said, “There ought not to be a great gap between the first step and the second.”

  Trump has said before that he wanted to “simultaneously” repeal and replace the health-care law, but GOP leaders on Capitol Hill hadn’t committed to that timeline.

  One thing is clear: both repealing and replacing the health law would be complicated legislative maneuvers with sweeping repercussions for both the health-care industry and millions of American consumers. It could also take years, and keep Obamacare in its current form for a long time, contrary to Trump’s campaign promises.

  Reince Priebus said on Sunday that a new health plan might not be ready immediately after gutting the Affordable Care Act. “It may take time to get all the elements of the replacement in place,” Mr. Priebus said on CBS. “The full replacement may take more time than an instantaneous action.”

  As reported previously, Republicans are planning to use a special process tied to the budget to pass legislation repealing the health law with a simple majority, but they can afford to lose few GOP votes. They would need all Republicans and several Democratic votes to then approve any replacement health-care system, in order to reach the 60 votes needed to clear the chamber’s procedural hurdles. Paul, who has objected to the budget maneuver over its spending levels, said that he would like to see what would replace the health law weeks later, after House and Senate committees have detailed how the ACA would be repealed. The budget specifies that they must produce their legislation by Jan. 27.

  Meanwhile, in a separate article, Bloomberg reports that top advisers to President-elect Donald Trump will meet Monday evening with House Speaker Paul Ryan and his policy staff to discuss taxes and other policy issues, according to two people familiar with the plans. Topics on the agenda include tax reform, the budget, infrastructure and Obamacare.

  As a reminder, tax reform was the other item that Trump is expected to be able to enact relatively painlessly.

  Ryan and his team intend to walk through the tax reform plan House Republicans put forward last year, calling it a “priority issue” for the House and the president-elect, according to the other person, a Republican aide. House Ways & Means Committee Chair Kevin Brady will be the House Republicans’ point person on tax reform, the aide said. According to Bloomberg, though Trump and Ryan agree on plenty, points of contention include tariffs for companies that move jobs overseas, a $1 trillion infrastructure plan, as Trump has called for, and how many people an Obamacare replacement should insure.

  Present at the meeting will be all the top economic Incoming White House aides Reince Priebus, Stephen Miller, Stephen Bannon, Jared Kushner and, of course, former Goldman President Gary Cohn.

  

  

• FBI Quietly Releases 300 Documents Pertaining To Hillary Clinton Investigation

  Submitted by Joseph Jankowski via PlanetFreeWill.com,

  While most Americans were likely watching the 74th Annual Golden Globes Awards and NFL football, the FBI quietly released another several hundred pages of documents from its investigation of Hillary Clinton’s private email server on Sunday night.

   

  FBI quietly releases new Hillary Clinton investigation documents (part 5) [as yet, no announcement] https://t.co/lmyWF5rA8H

  — WikiLeaks (@wikileaks) January 9, 2017

  The documents deal with the handling of computer hardware collected from Clinton’s lawyers for the investigation and also contains emails from FBI officials discussing the classification of Clinton’s emails.

  This is the fifth dump of Clinton investigation records which can be found at the FBI’s Vault website where the agency provides information about high-profile Freedom of Information Act (FOIA) releases.

  Chuck Ross of the Daily Caller reports:

  The emails included in the documents are from the months prior to the formal opening of the Clinton email probe, which occurred on July 10, 2015. The exchanges show disagreements between the FBI and State Department over whether some of Clinton’s personal emails should be classified.

   

  In one April 27, 2015 email, an FBI official wrote to other officials that they were “about to get drug into an issue on classification” of Clinton’s emails. The official, whose name is redacted, said that the State Department was “forum shopping,” or seeking a favorable opinion on the classification issue by asking different officials to rate emails as unclassified.

   

  

   

  From FBI document release

   

  Other email traffic sheds light on a controversy involving State Department under secretary for management Patrick Kennedy and a request he made in 2015 that the FBI reduce its classification of a Clinton email related to the Sept. 11, 2012 attacks in Benghazi.

   

  Clinton investigation notes released by the FBI in October showed that an FBI official said during an interview as part of the email probe that Kennedy asked him and others at the FBI to relax classifications on some emails.

  The under the radar release also contains a May 21, 2015 email in which the FBI’s assistant director of the counterterrorism division, Michael Steinbach, details a conversation with Patrick Kennedy on classification.

  In the email, Steinbach recommended that one of Clinton’s emails be classified using b(1) and b(7) redactions, a technique used to protect information in the interest of national defense. Kennedy was asking Steinbach to allow just b(1) redactions.

   

  An unnamed official said that the email in dispute by Kennedy and Steinbach could disclose sources and investigative methods used by the bureau, according to the released documents.

   

  The official also added that the disputed email was redacted and classified on the rationale that it contained information that would cause “interference with foreign relations.”

   

  “While the email does not name the particular official, this might be deduced and, given the threat of violence in the region, any surmise could be fatal for whoever cooperated with us,” the official wrote.

   

  “State will say no one will know if it is redacted, but that is not how classification works,” they added.

  More information will be coming out about this document dump as the week progresses, but don’t expect the MSM to harp on it at all. Remember the Russians are coming…

  The FBI has not yet announced the release of the documents.

  Read the latest Clinton files below:

  

  

• PReCiouS BoDiLY FLuiDS…

  

  

• Obama Finally Admits He Bears "Some Responsibility" For The Dems' Staggering Losses Since 2008

  On the verge of his last days in the White House and in a rare display of humility, President Obama admitted to ABC’s George Stephanopoulos over the weekend that it is possible, just maybe, that he, and the epic failure of his crowning piece of legislation, Obamacare, could have contributed to the stunning collapse of the Democratic party over the last 8 years.  Well, at least he kind of admitted it before enumerating all the reasons he couldn’t possibly be to blame…but it’s a step in the right direction. 

  “I take some responsibility on that. I think that some of it was circumstances. If you look at what happened, I came in in the middle of the worst financial crisis since the Great Depression. And unlike FDR who waited — well, didn’t take office until about three years into the Great Depression, it was happening just as I was elected. I think we did a really good job in saving this economy and putting us back on the track of growth. But what that meant is in 2010 there were a lot of folks who were still out of work. There were a lot of folks who had lost their homes or saw their home values plummet, their 401k’s plummet. And we were just at the beginnings of a recovery. And the, you know, whoever is president at that point is going to get hit, and his party’s going to get hit. That then means that suddenly you’ve got a redistricting in which a lot of state legislatures are now Republican. They draw lines that give a huge structural advantage in subsequent elections. But what I think that what is also true is that partly because my docket was really full here, so I couldn’t be both chief organizer of the Democratic Party and function as commander in chief and president of the United States. We did not begin what I think needs to happen over the long haul, and that is rebuild the Democratic Party at the ground level.”

  And while Obama would like for you to believe that the prolonged “great recession” caused all of those Democrats losses in Congress and state legislatures, he seems to be “mis-remembering” history.  The “great recession” is precisely what catapulted Obama into the White House and resulted in massive Democratic majorities in both the House and Senate in 2008.  The Democratic losses in the House and State Legislatures across the country didn’t come until the mid-term elections, two full years later in 2010, as Democrats were forced to go out and campaign just after passing the unpopular and wildly controversial Obamacare.

  The Washington Post even created this handy graphic which charts the losses by year.

  

   

  Moreover, if Democrat losses in 2010 were, in fact, attributable to the “great recession”, and given that Mr. Obama constantly likes to remind us that he has presided over a staggering “economic recovery” over the past 8 years, perhaps he can explain why Democrats have continued to lose seats throughout his presidency.  Surely Democrat misfortunes should have reversed in 2012 when it became glaringly obvious that his economic policies were “working,” right?

  And here is the full interview with George Stephanopoulos:

  

  

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• Tonight's Forecast Inside the Golden Globes: Lots of Snow with a Chance of Trump Tears

  The entire star-studded audience at the Golden Globes practically cried in unison, after Meryl Streep took to the mic to lament over an incident that happened last year regarding what she thought was Donald Trump mocking a disabled reporter.
   
  The rift was with NY Times reporter Serge Kovaleski, who said Trump was lying about witnessing Muslims celebrating in New Jersey after 9/11 — which later proved out to be true. Without delving into old news, Trump said he wasn’t making fun of Serge’s physical disabilities, but instead mocking a reporter who was flustered.
   

  I have no idea who this reporter, Serge Kovalski [sic], is, what he looks like or his level of intelligence. I don’t know if he is J.J. Watt or Muhammad Ali in his prime or somebody of less athletic or physical ability. Despite having one of the all-time great memories, I certainly do not remember him.
   
  I merely mimicked what I thought would be a flustered reporter trying to get out of a statement he made long ago. If Mr. Kovaleski is handicapped, I would not know because I do not know what he looks like. If I did know, I would definitely not say anything about his appearance.

   
  In light of all the horseshit taking place in the world, the fact that the United States is engaged in armed conflicts in 8 different countries and is led by a man who has literally destroyed the middle east, relations with Russia, and has divided this country along matters of race, gender and orientation more than any person in the history of the country, as well as compiling more debt than all of the previous Presidents combined, Meryl Streep decided that Trump mocking a reporter was the most important thing to talk about during her 5 minute speech at the Golden Globes tonight.
   

  
   
  Once icy cold, floating through the air with glee, the snow flakes have hit the ground now and have melted.

   

   

  Content originally generated at iBankCoin.com

  

• Yuan Is Crashing (Again)

  The volatility in the Chinese currency has gone from the sublime to the ridiculous. After exploding 21 handles stronger in the biggest PBOC-engineered short-squeeze in history – erasing the entire post-election sell-off – offshore Yuan is now collapsing once again, down 350 pips tonight (and over 10 big figures from Thursday's highs). While interbank rates have calmed down, the rush to exit the currency has not…

  The last two days are the biggest drop in offshore Yuan since Aug 2015's devaluation… as PBOC weakens its fix by the most sine June 2016.

  

   

  Pushing historical volatility to its highest since the Aug 2015 devaluation…

  

  For some context, this level of volatility is over 10 standard deviations away from the pre-Aug 2015 norms.

  Notably the moves accelerate afterPBOC Advisor Fan Gang told Bloomberg TV…

  • *PBOC WANTS TO SEE FX RESERVES REDUCE SMOOTHLY, GRADUALLY: FAN
  • *CHINA POLICY MAKERS NOT LIKELY GO FURTHER ON OUTFLOW CURBS: FAN
  • *YUAN OVERVALUED IN PAST 3-4 YEARS AGAINST DOLLAR: FAN
  • *CHINA POLICY MAKERS NOT LIKELY TO DROP INTERVENTION: FAN
  • *USE OF YUAN HAS INCREASED DESPITE RECENT DEPRECIATION: FAN
  • *CHINA NEEDS LESS FX RESERVE AFTER YUAN'S INCLUSION IN SDR: FAN

  Which was followed by the state-run Global Times newspaper says in an English-language editorial, saying that the Chinese people will demand its government to “take revenge” if Donald Trump reneges on the one-China policy after becoming U.S. President.

  

  

• US Aristocracy Panics That Maybe Trump Is Serious

  Submitted by Eric Zuesse via Strategic-Culture.org,

  On January 2nd, the U.S. Republican Party’s Wall Street Journal headlined «Tensions Within GOP Rise Over How to Handle Russia», and reported that the policy toward Russia by the incoming Republican President Donald Trump is being opposed not only by Democrats in the U.S. Congress, but also by some Republicans, and perhaps even by enough Republicans to jeopardize confirmation of his nominee for U.S. Secretary of State, as well as some nominees for other crucial diplomatic and military positions.

  A key insightful passage in that news-report was: «‘What you are seeing on Russia within the Republican Party is in some ways more a symptom of realignment across the board within American political parties,’ said Matthew Rojansky, director of the Washington-based Kennan Institute. ‘This speaks to something very critical that’s going on in our political system right now.’»

  Trump is being significantly opposed by both Parties regarding his foreign policies, even though his domestic policies are being opposed on a far more partisan basis, by Democrats, and have a higher chance of congressional passage than his international initiatives do, because of the almost-solid support for his domestic policies on the part of Republican members of Congress — and because Republicans control both the Senate and the House.

  The «realignment across the board within American political parties» is actually a realignment only in the field of foreign policy — not at all in domestic policy. What used to be «Republican foreign policy» ever since the time of Richard Nixon, has been called «neoconservatism» — referring to a hard line against communism and then against Russia and any country that’s friendly toward Russia — but the incoming Republican President Trump campaigned consistently against neoconservatism, and now Democrats are almost solidly neocons, while some Republicans are actually joining the Republican President in condemning neocons.

  Whereas Trump is generally called «conservative» on his domestic policy statements, he could possibly turn out to be more of a «progressive» than his Democratic Party predecessor, President Barack Obama, was, regarding foreign affairs. And this terrifies the U.S. aristocracy in both of the political Parties, because the U.S. aristocracy — both its Republicans and its Democrats — has been solidly neoconservative: they are virtually united, on this, against Trump.

  The U.S. aristocracy control not only the major American corporations, but all influential ‘news’ media, and their respective ‘news’media; and their shared fear and loathing for incoming U.S. President Donald Trump is clear, even though he himself is one of them. Nobody knows what will happen to the U.S. government under his stewardship, but the fear amongst almost all of the other aristocrats is that maybe Trump hasn’t only been pretending to want a ‘populist’ government — they fear that he might really have such revolutionary intentions. They are consequently afraid: might it really be the case that a revolution — especially one transforming America’s foreign policies, which are the policies that are of the greatest interest to aristocrats (more even than domestic policies are) — will be led by a member of their own class? Is the ruling class — the thousand or so of them in the U.S. — perhaps now splitting, in a way that is far more meaningful than the merely superficial (rhetorical) distinctions that still remain between America’s two major political Parties, the Republicans and the Democrats?

  The old ideological political alliances within the United States have now utterly broken down, and the reason is that in recent decades, both the right and the left had been controlled behind the scenes, by America’s billionaires and centi-millionaires, who are virtually unanimous on some policy-issues (so that the U.S. has a one-party government on these matters), with no significant ideological dissent amongst the U.S. aristocracy on those key issues, especially about continuing the old ideological Cold War against communism, switched now into a purely nationalistic and increasingly hot war against Russia, as allegedly an evil and imperialistic nation in ways that the United States itself is supposedly not (but actually is even more so than Russia or any other nation in the world, and widely recognized as such, except inside the United States itself, where the aristocracy’s ‘news’ media hide this ugly nationalistic fact about the land they control — the fact of America’s being the world’s most aggressive nation).

  America’s super-rich have no objection against the government that they control conquering others, like the Iraq-invasion in 2003, and the U.S. coup overthrowing and replacing the democratically elected and Moscow-friendly President of that country in 2014, and aiding jihadists in Syria to overthrow Syria’s pro-Russian secular government; and the phone-tapping of all Western leaders including Angela Merkel and generally practicing cyber-invasions everywhere in the world — but they and their agents allege that Russia is doing these things even worse than America is, and needs to be punished by the ‘virtuous’ U.S. government for (allegedly) doing what the U.S. actually does far more than any other nation in the world.

  Though Trump has reversed himself on many things that threaten the U.S. aristocracy, such as by his saying he won’t, after all, prosecute Hillary Clinton for her crimes (which were never really investigated under Obama’s regime — and protecting the legal immunity of aristocrats is crucial to the aristocracy of both political Parties), Trump still hasn’t – now just days before entering the White House – reversed himself regarding his intention to improve relations with Russia. 

  Becoming even more hostile toward Russia is almost a unanimous goal of the U.S. aristocracy. They’re thus rebelling against him, in their ‘news’ media, and they won’t stop trying to cripple his Presidency unless and until he relents on this, turns around, and continues, ever-hotter than before, their (under Obama, increasing) ’Cold War’ against Russia: going beyond even what President Obama has been doing (coups, invasions, sanctions, etc.), aiming to replace the Russian government’s allies by the American government’s allies, and thus to isolate and weaken Russia, ultimately to take over Russia itself.

  During the early years of the Cold War, America’s Republican Party and their ‘news’ media, especially insisted upon increasing the war against the Soviet Union; but, now, in the purely nationalistic war against Russia, it’s instead Democratic Party politicians and ‘news’ media, who are especially fervid to conquer Russia. Republican Party ‘news’ media, such as Fox ‘News’, are now considerably less hateful toward Russia, no longer obsessed against it, like the Democratic Party’s ‘news’ media have become — thereby switching political roles.

  Consequently, too, for example, the Democratic Party’s Washington Post is doing everything they can to encourage U.S. conquest of Russia, such as by spreading fake ‘news’ stories against the few small independent Western newsmedia that are pointing out the lies (especially the ones against Russia) in such media-giants; and some of the Republican Party’s ‘news’media now are even doing in-depth actual news-reporting about the fraudulence of the Democratic Party’s ‘news’media, on these matters that are of such intense interest to America’s aristocrats.

  Excellent examples of this phenomenon are provided by the various ‘news’media of the rightwing-populist Alex Jones, which featured, on New Year’s Day, the video «Dems Want War With Russia To Stop Trump», and an associated investigative news report from their Mikael Thalen, «Washington Post Stirs Fear After False Report of Power Grid Hack by Russia», exposing the WP’s lying propaganda for «War With Russia» — Democrats’ (and a few Republicans’) lies basically to promote unsubstantiated allegations by the Obama regime, that ‘Russian hacking’ is a danger both to American ‘democracy’, and to American national security.

  That «War With Russia» video (at 5:00-) presents the futurist, Gerald Celente, discussing liberal Democrats who were saying, totally without evidence, such things as »Vermonters and all Americans should be both alarmed and outraged that one of the world’s leading thugs, Vladimir Putin, has been attempting to hack our electric grid, which we rely upon to support our quality of life, economy, health, and safety.» The infamous 1950s Republican, Joseph R. McCarthy, has thus non-ideologically returned from the grave, now, in the guise of liberal Democrats (or should that instead be ‘Democrats’?), as part of the U.S. aristocracy’s war to force the Republican President, Donald Trump, to join the tradition that the Republican President George Herbert Walker Bush established, on 24 February 1990, of treating Russia as being America’s enemy, no longer communism as being America’s enemy.

  These people simply can’t draw enough of other people’s blood. Bram Stoker might be shocked that reality has thus produced ghouls who would make Stoker’s own legendary vampires seem like angels by comparison. Will Trump perform the role of Stoker’s hero, Abraham van Helsing here, or instead become just another of the vampires himself (which all of America’s major, and most of its minor, ‘news’media are demanding)?

  

  

• "Unequivocally Bad?" Gas Prices Soar Over 20% YoY – Most Since 2011

  In December 2014, as gas prices had plunged over 20% YoY, Janet Yellen proclaimed "from the standpoint of the U.S… the decline we've seen in oil prices is likely to be, on net, a positive," and that narrative of slumping gas prices being "unequivocally good" for Americans was spewed everywhere across linear-thinking mainstream media. So we wonder, with gas prices up 22% year-over, the fastest spike since 2011, is that "unequivocally bad" for America?

  Remember when Janet Yellen, and all the tenured economists in her circles said that plunging gas prices are great for the consumer?

  The dramatic plunge in oil prices might be spooking some investors, but Janet Yellen isn't worried at all.

   

  The Federal Reserve chief believes oil tumbling is like a tax cut for American consumers.

   

  "From the standpoint of the U.S. and U.S. outlook, the decline we've seen in oil prices is likely to be, on net, a positive," said Yellen at a press conference on Wednesday.

   

  "It's good for families, for households. It's putting more money in their pockets," she said.

   

  "On balance, I would see these developments as a positive," she said.

  Well, as we noted last week, as GasBuddy warned of "sticker-shock" – as motorists will shell out $52 billion more over the course of the year compared to 2016, we are about to find out just how bad for the consumer rising prices will be.

  Retail gas prices surged again last week, with the average price for regular gasoline at U.S. pumps rising 11.97c to $2.3777/gal, according to Lundberg Survey.

  This is a 20.6% year-over-year surge – the biggest since October 2011.

  

   

  By Janet Yellen's logic, the 20-plus percent surge in gas prices means "less money in Americans' pockets" and as a final reminder, this is what happened to the US Macro-economic data, the last time gas prices surged at the current pace…

  

  Trilby Lundberg, president of Lundberg Survey, explains there are two primary causes to rise in average retail price:

  1. "Retail gasoline has been catching up to earlier crude price rises”, and
  2. "More states added gasoline tax hikes and federal regulations reduced amount of sulfur in gasoline by two- thirds, both effective Jan. 1"

  We wonder what Janet Yellen will have to say about this 'drag' on the consumer… or is it now an indication of the 'confidence' in the US economy?

  

  

• Ron Paul Sums Up Nobel-Peace-Prize-Winning President Obama In One Short Sentence

  Following our discussion of the unprecedented bombing-fest that has been undertaken during President Obama's reign…

  Seven years after being awarded the Nobel Peace Prize for his "extraordinary efforts to strengthen international diplomacy and cooperation between peoples," despite having been in office for less than one year and having pretty much no actual, tangible foreign diplomacy accomplishments at the time, President Obama will depart the White House having dropped 26,171 bombs on foreign countries around the world in 2016, 3,027 more than 2015.

  According to an analysis of Defense Department data from the Council on Foreign Relations, a non-partisan think tank, the majority of Obama's 2016 bombs were dropped on Syria and Iraq.  Meanwhile, Afghanistan, a country President Obama vowed U.S. troops would evacuate completely by the end of his Presidency, was also bombed over 1,300 times, a 40% increase over 2015.  Per McClatchy DC:

  The U.S. dropped 79 percent of the anti-Islamic State group coalition bombs in Syria and Iraq, totaling 24,287. That figure, along with others analyzed by CFR, is likely lower than the actual number dropped because one airstrike can involved multiple bombs.

   

  Obama did authorize a troop surge in Afghanistan — a conflict he pledged to end during his campaign — where the U.S. dropped 1,337 bombs in 2016. There are currently 8,400 U.S. troops left in the country, more than Obama initially wanted to keep there at the end of his term. The U.S. only dropped 947 bombs in Afghanistan in 2015.

   

  The U.S. also dropped more bombs in Libya in 2016 than it did in 2015. Nearly 500 bombs were dropped in the North African country that has essentially been ungoverned since the fall of dictator Muammar Gaddafi in 2011. He was captured and killed during the Libyan Civil War, kicked off by the Arab Spring protests that also began the Syrian conflict.

  

  Ron Paul opined on the farce via his Facebook page…

  Barack Obama started with a Nobel Peace Prize and is ending his presidency with the Pentagon's Distinguished Public Service Medal.

   

  

   

  Sounds about right for a president who bombed 7 nations and became the first in U.S. history to be at war every single day of his eight year administration.

  Just remember America, as Obama signs 'The Ministry of Truth' act into reality, "War is peace, freedom is slavery, and ignorance is strength."

  

  

• On Russian Hacking, The Only Narrative That Matters Is Truth

  Authored by Davide Battistella,

  Excuse me for wanting to point out the obvious, but sometimes the obvious gets very lost in the web of narratives spun by the master narrator inside the White House. Forgive me, but are we not losing the idea that the only narrative that really matters is that all of the information “LEAKED” was obtained through a simple fishing e-mail sent to John Podesta. See their own words here:

  

  Somehow this has been converted into words like “HACKING” (ps it is not hacking when it involves your own ineptitude or stupidity) into “Russian actors”, “digital fingerprints” or any other slew of gobbledyspeak they can come up with for wanting desperately to hide a simple fact: the truth is in the e-mails.

  Notice nobody is disputing the contents of the email leaks, they just want to complain about the fact that it was stolen by Russians,  though if the passwords were freely given away it’s hard to call it hacking.

  Just to be clear a hack is defined this way.

  “Computer hacking refers to the practice of modifying or altering computer software and hardware to accomplish a goal that is considered to be outside of the creator’s original objective. Those individuals who engage in computer hacking activities are typically referred to as ‘hackers‘.”

  That is completely different from entering an account to which a party freely gave away the password and downloading the data for say an “inbox”.  So don’t confuse hacking with the granting of access through being ill informed.

  The reason all of this becomes important is simple, it’s leading the world into potentially very dangerous conflict.  This isn’t something that should be taken lightly and you have to go to the WHY?  Why is it so important to divert people from the contents of the e-mails and point them instead to the way they were obtained.  It’s for war mongering purposes.

  The MSM is going right along with it too.  Have we heard nearly as much about the theft and publication of Donald Trumps tax returns as published by the New York Times?

  http://www.nytimes.com/interactive/2016/10/01/us/politics/donald-trump-taxes.html?_r=0

  http://www.nytimes.com/2016/10/02/us/politics/donald-trump-taxes.html

  Who is investigating the “hostile actors” from within the IRS who might have illegally stolen, copied and provided documents to the New York Times who then did barley more that what Wikileaks did with the Podesta e-mails.

  At least Wikileaks published a pristine, searchable archive, the kind you could search in your local public library. In a crowdsourcing age, it is incredible what can be uncovered in a shot amount of time.

  But it is different now.  Wikileaks expects  “professional” journalists to do their jobs, pour through the information and uncover everything from the salacious, the banal and the illegal.  Why did this not happen with the wikileaks, but it was all hands on deck to pour over illegally obtained tax returns of a private citizen. Perhaps MSM credibility is at the heart of the issue? Not sure. 

  People consume information differently now and have many outlets to weigh before forming an opinion and that is a narrative busting option.

  There remains only one defense, attack the messenger, lie and divert attention. So you can’t dismiss the contents of the wikileaks, you can only call Assange a pedophile, place him under house arrest, tell the world that Russia did the following (and I am following your logic here “intelligence” community/narrative spinners)

  1. The Russians sent a phishing e-mail to John Podesta and he responded with his password.
  2. The Russians downloaded all the information in his inbox.
  3. The Russians found a third party who new Jullian Assange and arranged for that third party to deliver the contents of that archive to wikileaks.
  4. Wikileaks released the information day after day and about 120 million and Americans followed that story closely enough that based on that leak (and maybe the DNC one as well) decided that they could not vote democrat in the election.
  5. Hillary Clinton won the popular vote but lost the electoral college by losing  key “shoe in” democratic stronghold manufacturing states where jobs have been lost, people are hurting and decided voted for change, not because of those reasons but because somehow Russia managed to release true information to the American public.

  While all this was happening President Obama knew about it and told Putin to “cut it out” or you he would be in trouble after the election, after we try some recounts and after we try to intimate the electoral college, but before I leave office. Maybe I will throw in a fake story from the Washington post that Russia tried to hack the power grid on Christmas day in Vermont as well, just to get folks really fired up.

  This entire transition process demonstrates a complete lack of class and childish behaviour by the outgoing administration. That is the only way to describe it.  Sore losers who demostrate abolutely no class, no respect for process or really for the American people who democratically elected Donal Trump in a fair process.

  Folks don’t get bamboozled, remember, your President told you this when the narrative suited him.

  Transcript from TIME

  President Obama,

  “One of the great things about America’s democracy is we have a vigorous, sometimes bitter political contest and when it’s done, historically, regardless of party, the person who loses the election congratulates the winner, who reaffirms our democracy and we move forward.

   

  That’s how democracy survives because we recognize that there’s something more important than any individual campaign. And that is making sure that the integrity and trust in our institutions sustains itself.

   

  Because democracy, by definition, works by consent, not by force. I have never seen, in my lifetime or in modern political history, any presidential candidate trying to discredit the elections and the election process before votes have even taken place.

   

  It’s unprecedented. It happens to be based on no facts; every expert, regardless of political party, regardless of ideology, conservative or liberal, who has ever examined these issues in a serious way, will tell you that instances of significant voter fraud are not to be found, that — keep in mind, elections are run by state and local officials, which means that there are places like Florida, for example, where you’ve got a Republican governor, whose Republican appointees are going to running and monitoring a whole bunch of these election sites.”

  That was on October 19th of 2016.

  

  

• Twitter Suspends Martin Shkreli for Trolling a Reporter

  I haven’t seen any of Martin’s tweets ever since he blocked me for calling out his utter bullshit with Kalobios. Apparently, he’s been very busy stalking some liberal reporter on Twitter, goading and trolling her to the point that @Jack had to step in and put an end to the madness.

  How is this allowed @jack pic.twitter.com/Wof8MlYHTL

  — Lauren Duca (@laurenduca) January 8, 2017

  Have a closer look at his homage to Lauren Duca.

  

  Is Twitter a little fucking obsessed with controlling their community? Absolutely. Back in the old days I felt very comfortable telling people to ‘DIE IN A FUCKING RAGING FIRE’ or to ‘GET EATEN BY A HOMOSEXUAL GIRAFFE.’ But now, I rarely tell people to fuck off, for fears of being banned.

  It’s sad, really.

  Here is a DM Marty sent Lauren, which has given me some new found respect for the ‘pharma bro.’

  

  Washpo tried to reach out for comment on the situation and was roundly rebuffed, basically told to fuck off.
  

   

  And this from Huffington Post, reporting on the situation.

  The Huffington Post attempted to reach Shkreli via an email address he had previously listed on his Twitter page; we received a response that read “lol suck a dick.”

   

  Content originally generated at iBankCoin.com

  

• Democrats Use Trump-Rescued Ethics Office To Delay Trump Nominees

  In an ironic twist, following president-elect Trump's urging to kill a bill that would have severely diminished Congress' Ethics Office power, The Hill reports that Democrats are calling on Senate Republicans to delay hearings for Trump's Cabinet picks, citing an incomplete ethics screening of several nominees.

  As a reminder, House Republicans abruptly voted on Monday night to eliminate the independence of the Office of Congressional Ethics, the chamber’s nonpartisan ethics board which investigates lawmakers' alleged misconduct, largely stripping it of its power, leading to pushback from Democrats and government watchdog groups. House Republicans, meeting as a group Monday night, approved an amendment from House Judiciary Committee Chairman Bob Goodlatte that would place the office under the oversight of the lawmaker-run House Ethics Committee.

  Trump responded…

  With all that Congress has to work on, do they really have to make the weakening of the Independent Ethics Watchdog, as unfair as it

  — Donald J. Trump (@realDonaldTrump) January 3, 2017

  Which led House Republicans to hold an emergency meeting, resulting in… (via The Hill)

  House Republicans at an emergency conference meeting on Tuesday withdrew a proposal to gut an ethics watchdog.

   

  House Majority Leader Kevin McCarthy (R-Calif.) offered a motion to restore the current OCE rules, and that was accepted by the GOP conference.

   

  The new Congress hadn't even formally gaveled in on before GOP leaders held an emergency conference meeting to discuss the blowback against the party's vote Monday evening to gut the chamber's independent ethics watchdog.

  And so now, as The Hill reports, Democrats are using that rescued 'power' to try to delay confirmation of Trump's cabinet picks…

  Early on Saturday, the director of the federal Office of Government Ethics, a watchdog agency that conducts ethics reviews of all Cabinet appointments, said that the plan to hold confirmation hearings before the ethics reviews are complete is "of great concern."

   

  “As OGE’s director, the announced hearing schedule for several nominees who have not completed the ethics review process is of great concern to me,” Walter Shaub, Jr., said in a letter to Senate Minority Leader Charles Schumer (D-N.Y.) and Sen. Elizabeth Warren (D-Mass.).

   

  “It is unprecedented and deeply worrisome to hold confirmation hearings on President-elect Donald Trump's nominees before basic ethics reviews are completed," Democratic National Committee (DNC) spokeswoman Adrienne Watson said in a statement.

   

  "These rushed hearings must be delayed until the ethics reviews are finished, and if Trump and the GOP-led Senate fail to do so, the only reasonable conclusion to be drawn is that they are concerned about what will be exposed,” Watson added.

   

  Schumer blasted the timing of the scheduled hearings, accusing Republican lawmakers of trying to "jam through" the nominees.

  The GOP hoped to hold confirmation hearings on Tuesday and Wednesday as the party seeks to usher a smooth transition of power to the new administration. The nominees currently scheduled for the next week's hearings include former ExxonMobil CEO Rex Tillerson, Trump's pick for secretary of State; Sen. Jeff Sessions (R-Ala.), Trump's pick for attorney general; and Betsy DeVos, Trump's pick for Education secretary.

  And as one would imagine Trump's team strongly disagrees with "head clown" Schumer's view of the hearings… (via The Hill)

  Incoming White House chief of staff Reince Priebus said Sunday there's “no reason” to delay confirmation hearings for President-elect Donald Trump’s Cabinet nominees until their background checks are complete.

   

  “No, they have to get moving. They have to move faster,” Priebus told "Fox News Sunday." “They have all the information. These are people that have been highly successful in their lives. They need to move quicker.

   

  “The fact is there’s no reason,” he added. “It’s the first week of January, they have all the details that they need, they have all the information that they need, it’s no different from any other new administration coming in. The American people demand it. Change was voted for and change we will get.”

   

  

  

• Neera Tanden Reveals "Hillary Will Never Run For Elected Office Again"

  "I felt a great disturbance in the farce, as if millions of snowflakes suddenly cried out in terror and were suddenly silenced. I fear something terrible has happened…"

  

  Just days after rumors emerged of Hillary Clinton potentially running for New York City mayor, Hillary Clinton confidante Neera Tanden told CNN that she doesn't expect Clinton to run for New York City mayor — or anything else, ever again.

  "I think she's going to figure out ways to help kids and families. That's been what she's been focused on her whole life, and a lot of issues that are affecting them, over the next couple of years," Tanden told CNN's Jake Tapper on "State of the Union" Sunday.

   

  "But I don't expect her to ever run for any elected office again," she said.

   

  Tanden, a close Clinton ally and the head of the liberal think tank Center for American Progress, was shooting down reports of chatter in New York political circles that Clinton could run against incumbent Democratic Mayor Bill de Blasio.

   

  

   

  "I don't expect her to run for this and I don't expect her to run for other office," Tanden said. "I think her job is to — what she's thinking about right now is how to help those kids and families as she has her whole life."

  It appears our video anology of Clinton's strategy meeting was spot on…

  

  

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• Newt Gingrich Likens Russian Hacking Probe to Benghazi, Says 'Profoundly Wrong Things Going On'

  Newt Gingrich dropped some redpills during a Fox News interview, wondering out loud ‘what’s going on here?”

  Amongst his chief complaints is the fact that NBC obtained the report from the Obama administration before President elect Trump. What was Obama doing to protect against hacks and for how long did he know about them? Why did Obama slap Russia with sanctions a week before the report? What basis did he use to justify them?

  Trump wants to know how the fuck NBC obtained the report before him and has called for an investigation.

  I am asking the chairs of the House and Senate committees to investigate top secret intelligence shared with NBC prior to me seeing it.

  — Donald J. Trump (@realDonaldTrump) January 6, 2017

   

  Content originally generated at iBankCoin.com

  

• THe EMPeRoR OF HORSe $HiT

  

  

• Czech Government Fears Muslim "Super-Holocaust", Urges Citizens To Shoot Them Yourselves

  On the heels of Czech President Milos Zeman's warnings of a possible "super-Holocaust" carried out by Muslim terrorists, urging citizens to arm themselves, WaPo reports the country's interior ministry is pushing a constitutional change that would let citizens use guns against terrorists if police are delayed or unable to make their way to the scene of an attack.

  Czech president Milos Zeman had previously proposed that economic migrants should be deported from Europe to “uninhabited Greek islands” or to “empty places” in North Africa. The spectacularly incredible president also proposed that the Greek debt should be progressively reduced in return for shouldering the cost of hosting hundreds of thousands economic migrants.

  “We are in Greece, and Greece has plenty of uninhabited islands, and big foreign debt. So if you have ‘hotspots’ in Greek islands, this would be a sort of payment of foreign debt,” Zeman told Financial Times in an interview on the islands of Rhodes where he participated in the Rhodes Forum.

  

  As The Guardian previously noted, the Czech president has unleashed a rhetorical fusillade against Muslim incomers of such intensity that it makes the anti-Islamic sentiments of Robert Fico, the Slovakian prime minister, and even Viktor Orbán, Hungary’s prime minister, seem mild in comparison.

  Zeman has warned that the Czech Republic – home to fewer than 4,000 Muslims out of a population of 10.5 million, according to official figures – could be targeted in a jihadi attack and urged Czechs to arm themselves against what he referred to as a possible "super-Holocaust." The concern is believed to have prompted the unprecedented introduction of metal detectors to screen the crowds of foreign tourists that visit Prague castle each day.

   

  The alarmist message is particularly striking because unlike most anti-immigrant politicians in western Europe, Zeman, 71, is a social democrat (and former communist) rather than a rightwinger, and the Czech Republic has been largely spared the waves of refugees that have swept into neighbouring Austria and Hungary en route to Germany.

  But now, as The Washington Post reports, the rhetoric is getting even louder as the country's interior ministry is pushing a constitutional change that would let citizens use guns against terrorists.

  Proponents say this could save lives if an attack occurs and police are delayed or unable to make their way to the scene. To become law, Parliament must approve the proposal; they'll vote in the coming months.

   

  The Czech Republic already has some of the most lenient gun policies in Europe. It's home to about 800,000 registered firearms and 300,000 people with gun licenses. Obtaining a weapon is relatively easy: Residents must be 21, pass a gun knowledge check and have no criminal record. By law, Czechs can use their weapons to protect their property or when in danger, although they need to prove they faced a real threat.

   

  This puts the country at odds with much of Europe, which has long supported much more stringent gun-control measures.  In the wake of the 2015 terror attacks in Paris, France pushed the European Union to enact even tougher policies. The European Commission's initial proposal called for a complete ban on the sale of weapons like Kalashnikovs or AR-15s that are intended primarily for military use. Ammunition magazines would be limited to 20 rounds or less.

   

  The Czech Republic came out hard against the directive. Officials warned — somewhat ominously — that the measure would limit the country's ability to build "an internal security system" and make it nearly impossible to train army reservists. And a total ban on military-style rifles that can fire large numbers of rounds would make illegal thousands of weapons already owned by Czech citizens, potentially creating a black market for terrorists to exploit.

  Of course, the populist rhetoric may be the driving force behind this bill, as for now the Czech republic is the only country to oppose the EU's directive for being too strict.

  This is not the first 'extreme' move by Czech politicians with regard refugees/muslims/terrorists, as we noted previously, police in the Czech Republic are investigating comments made on Facebook by an extremist politician calling for refugees to be placed in Terezin, the former Nazi concentration camp.

  Adam Bartos, the leader of the fringe yet vocal far-right nationalist National Democracy Party, published the comments about the site, located in the central European country, on Monday.

   

  

   

  Reacting to the establishment of a refugee camp near the country’s border with Slovakia, Bartos wrote, “Why build tent camps for the aliens? We have the beautiful fortress town of Terezin where the aliens could concentrate before they are taken home by trains.”

   

  A police spokeswoman told the Czech News Agency on Monday that the police will probe whether or not the comments constitute a criminal act. According to Czech law, hate speech and comments inciting national, racial or religious hatred can carry penalties of up to three years in prison.

   

  Bartos is under investigation for four incidents involving allegedly racist, anti-Semitic and violence-inciting remarks. He also keeps a blog titled Hall of Jewish Fame that critics say lists politicians, journalists and other public figures of supposedly Jewish origin.

   

  Bartos’ party failed to gain seats in the European elections last year, the only campaign it has run in under his leadership.

  Terezin, also known as Theresienstadt in German, is located some 40 miles northwest of Prague.

  The town was turned into a concentration and transit camp by the Nazis in 1941. Roughly 144,000 Jewish people were sent there during the Holocaust, most of whom were later transported to extermination camps in occupied Poland. Some 33,000 died in the Terezin camp.

  

  

  

• Confessions Of A Fake News Reporter

  Submitted by Douglas Herman via Strike-The-Root.com,

  “A lie can travel half way around the world while truth is still putting on its shoes.”  ~ Mark Twain

  I write for those so-called “fake news” websites. You know the ones: the 200 odd deplorable websites, the ones Hillary, the Pope and Michael Moore have attacked as threatening to destroy World Peace, Democracy, Facebook and the Mainstream Media (MSM).

  I only write for a handful of them, sad to say, although I’ve been linked to scores more. One of my recent columns went viral and it probably swayed the entire election – for better or worse: Before Trump, Sen Bulworth Spoke Truth To Power .  Seriously, the blatant corruption of the losing team, from Super Delegates to Podesta and PizzaGate to hidden Hillary health issues and secret sums of money funneling through the Clinton Foundation in “Pay to Play” accusations cost them the election, despite the best efforts and endorsements of the entire American media.

  I’ve written for Rense, Counterpunch, Antiwar and Zerohedge. Most of my best stuff appears here on Strike The Root first, or STR as we call it, a website where Henry David Thoreau rather than Mark Zuckerberg is our moderator.  Tragically, STR did not appear on ProporNot and we are devastated, absolutely devastated.  Not.

  Sometimes I ask my friends: If knowledge is power and ignorance is bliss, which is preferable? I always hope someone will respond, as Socrates or Obi Wan would have: Knowledge of our ignorance is power; bliss in this age is unattainable. 

  So then, as an average American citizen, is it better to be misinformed or uninformed? Because Disinformation is almost a holy sacrament within the mainstream Operation Mockingbird media. Thus we fake news reporters believe we’re channeling our inner Tom Paine, Mark Twain or Henry D. Thoreau when we blog or post or link. When HDT wrote: “There are a thousand hacking at the branches of evil, to one who is striking at the root,” he was a spreader of fake news, by today’s tender standards. We like to think of ourselves as worldwide root strikers, following in his footsteps.

  Cui Bono: Who Benefits?

  Cops and crime scene investigators (CSI) always ask that question: Who benefits? Who had most to gain by the murder? We fake news reporters pride ourselves on getting the facts. Like legendary Joe Friday from that old TV show, Dragnet, we interview eyewitnesses, contact insiders and whistleblowers, sift through the circumstantial evidence (Like John Podesta’s creepy artwork) and attempt to deduce the truth. Unlike the TV talking heads and Op/Ed writers for the elite media news, we want to know exactly Who Benefits?  Even if it pisses off some elites. Or the elite media.

  “There are invisible rulers who control the destinies of millions. It is not generally realized to what extent the words and actions of our most influential public men are dictated by shrewd persons operating behind the scenes.”

  Sounds like some fake news screed, right, or some wacky conspiracy theory, right? Nope, this was written almost a hundred years ago by the Father of Public Relations and author of a book on propaganda that greatly influenced Adolf Hitler. Edward Bernays was Jewish and teaching in New York in 1923. Hitler’s Propaganda Minister, Joseph Goebbels, read his book Crystallizing Public Opinion and learned a lot from him a few years later, adopting Bernays’ masterful propaganda techniques.

  “There is no means of human communication which may not also be a means of deliberate propaganda,” Bernays wrote and the Nazis adopted. “The American motion picture is the greatest unconscious carrier of propaganda in the world today.”

  Maybe the mainstream media should nominate Ed Bernays as the Founding Father of Fake News, for spreading these ludicrous ideas far ahead of his time. But fakery and fudging the facts is best left to those rich and powerful Mockingbirds and their presstitutes of the so-called legacy media. Most of the best and brightest of that media have long since been blacklisted or silenced. Seymour Hersh, Steve Lendman and Paul Craig Roberts rarely appear in the NY/LA Times anymore.  Why? Because their stuff, like most of the stuff written by unknown root strikers like me, is exactly like Senator Bulworth’s. Too tough, too true.

  “It must be the money; it turns everything to crap,” said Bulworth to some Hollywood elites in that movie, just before the Oscar-winning actor and director, Warren Beatty, was blacklisted from Hollywood for almost 20 years. But money is rarely a factor for fake news reporters like myself. We do it for patriotism and professional pride. In more than a dozen years of devising “fake news,” I’ve been paid about $2,000 or about TEN BUCKS A COLUMN.

  “I guess I really do believe that the good is worth doing because it is good,” said peace activist and co-founder of Veteran Intelligence Professionals for Sanity (VIPS), Ray McGovern. “It shouldn’t matter that there is little or no guarantee of success, or even a truthful recounting of what happened.”

  A couple years ago, McGovern was manhandled out of a Hillary Clinton speech she gave at George Washington University.  The topic of her speech? The need for respect of dissent. Naturally NONE of the so-called legacy media present there covered his dissent, except in a dismissive way. “America’s Fawning Corporate Media is the embodiment of a Fourth Estate that is dead in the water,” McGovern added.

  By contrast to my TEN BUCKS a column, Hillary Clinton received a reported $500,000 for an appearance and speech she gave at ASU. The transcript never appeared in public, as far as I know, so it must have been absolutely priceless.

  “Hillary Clinton, the woman who voted for a war that was sold on a diet of fake news, a war that killed hundreds of thousands, is now lecturing Americans about fake news putting ‘lives at risk’,” wrote Paul Joseph Watson, on the alleged fake news website Infowars. Watson is like Sherlock Holmes’ sidekick on steroids. “Being lectured by Hillary Clinton about fake news is like being lectured by Ted Bundy about not raping and killing women. It’s a joke, but a particularly sick joke given that Hillary’s role in pushing fake news had actually led to the deaths of countless innocent lives.”

  We fake news reporters feed on the efforts and insights of others. We wish them well, Godspeed, Kudos, Bravos, Hurrahs, Links and Likes. Because we know that Pulitzer Prizes for reporting are now reserved for the con artists connected to the crony crime media. True Crime reporters rarely win Pulitzers anymore.

  Consider Matthew Allen. He penned a column called: NYT Mocks PizzaGate as Impossible, But Its CEO Covered up Jimmy Savile Scandal. Now if this news reporter Allen is wrong, a malicious spreader of so-called fake news, then why doesn’t the NYT sue him for slander or libel?  Most of us would simply Google this fellow Jimmy Savile and then we would try to weigh the facts in PizzaGate objectively.

  Allen writes, “It’s important to remember that the CEO of the fabled newspaper is none other than Mark Thompson, the former BBC director who ‘lied’ during the Jimmy Savile investigation, and is at least partly to blame for allowing a monster like Savile (So evil?) to operate within the BBC for so long ‘undetected’.”

  As I said, if so many of us fake news reporters are slandering people, why aren’t they suing us? Shouldn’t The New York Times, instead of trying to sublet office space in their diminishing empire, sue writers like Matthew Allen? Why doesn’t the New York Times sue him for malicious slander or libel? “Mark Thompson’s newspaper is a crime against the written word,” Allen added, as a parting shot.  

  To those of us who seek the truth, guys like Allen and Assange and Anonymous are allies in the fight against the toxic lies of the wealthy, well-connected and woefully corrupt power elites.

  Props or Snopes?

  Over the holidays, when a huge scandal shocked the cringing mainstream media world, WE CELEBRATED. We celebrated the deliciously karmic news that Facebook 'fact checker' Snopes.com was accused of embezzling company funds. The so-called debunker of “fake news,” deified by the mainstream media without any fact-checking at all, suddenly was a steaming pile of backstabbers, porn stars and alleged con artists and embezzlers.  Not that there’s anything wrong with porn stars.  Most mainstream media personalities are highly paid porn performers. They just earn MILLIONS more than porn star Jenna Jameson ever dreamed of earning.

  Many brilliant fake news reporters remain anonymous while posting as fictional characters in the alt media. Cognitive Dissonance, Miffed Microbiologist and Hedgeless Horseman are funny and always provocative at Zerohedge.  Jack Burton, at the same website, offers some astute, thought-provoking insight on an especially timely subject, terrorism.

  “ISIS never touches an Israeli head,” Jack opined recently. “They are sworn allies of the Israeli Government. Seeing great benefits to be had from the Middle East Super Power, backed by the USA. The main ISIS allies are: Turkey, Israel, the USA and NATO. All this Obama crying on TV about ISIS threats is bullshit fucking lies. Obama is behind backing ISIS on to final victory in Syria. When Russia began to kill ISIS in earnest, the following governments demanded they cease bombing ISIS at once:  Saudi Arabia, Qatar, Jordan, Turkey, USA, UK, Germany and others.”

  Now that Aleppo has fallen, the mainstream media is in mourning. Not for all the wars they encouraged these past 15 years, or for the millions of refugees those wars caused, or the tremendous pressure now on European countries to house and feed those refugees.  No, not at all.  To them, that evil dictator Putin has almost prevailed, and only freedom of the press will keep democracy safe. And you know what? They are right. Only freedom of the press and the Constitution will keep citizens safe. That’s why I guess I’ll log onto George Washington’s Blog, Zerohedge, Infowars, Brietbart, STR, Rense and Natural News to stay informed.  Because we fake news reporters must keep informed.  Without us, America will certainly fall.

  Addendum: While we fake news reporters love to be proven right, quite often we’re proven prescient. When I penned JFK and Obama–Profiles in Courage and Cowardice, I hoped to have been proven wrong. Sadly, ALL of the fake news reporters I quoted in that column EXACTLY eight years ago were proven correct.

  Addendum 2.0   No fake news reporter can claim Trump will succeed overwhelmingly. More likely he will sell out his huge core of hopeful believers to the money/power elites, just as almost all presidents have done in the past. If not, Trump will die in some tragic accident or from some lone gunman. We would love to be proven wrong.

  

  

• Citi: "There Is Something Strange Going On… Something Doesn't Smell Right"

  With the Dow Jones rising excruciatingly close, or within 0.37 points of 20,000 on Friday only to let down the market cheerleaders in the last minute, it would appear that there is nothing one can throw at a market which is determined to keep rising no matter what happens in the world.  So leave it to our favorite skeptic, Citi’s Matt King to throw a fly in the ointment by asking how is it possible that “nothing sticks to markets.”

  He proposes one possible reason: perhaps analysts were overly pessimistic going into the election and year end, which is possible considering the “most synchronized DM upturn in years”…

  

  … an upturn, which however, has been largely predicated by the reflexivity of soaring stock markets, which in turn have spiked not on actual news, but frontrunning the “everyone’s-a-winner-under-Trump” trade…

  

  … which however may never actually materialize in practice, and which could very well also lead to a recession as the surging dollar leads to a global GDP slump while paralyzing financial conditions (see recent record FX volatility in China).

  As King then notes, earnings bullishness gets you only so far, and as the chart below shows, the recent surge in global stock prices is not a function of earnings, but expanding P/E multiples relative to Trasuries, which then prompts him to ask why, now that yields are surging, “shouldn’t we be discounting using higher bond yields.”

  

  This is turn prompts King to propose one of his trademark rhetorical questions: “There Is something strange going on” adding that “something doesn’t smell right” in a world in which uncertainty is soaring yet spreads are collapsing, as SocGen first pointed out last month in its “most frightening credit chart“, even as leverage also keeps rising.

  

  What is the “key ingredient” in the mix that makes sense out of this market chaos? Simple: according to King, central bank buying of anything that is not nailed down is the “missing link.”

  

  Furthermore, despite all talk of a shift from monetary to fiscal stimulus, “central banks aren’t done yet“, not by a long shot:

  

  Which in turn has – so far – allowed markets to ignore the reality that the credit bubble is getting bigger by the day as debt and interest coverage continue to rise while EBITDA still shrinks, resulting in late cycle fundamentals and valuations.

  

  And yet, there is always a tipping point: according to King, such a point would arrive once real yields spike higher “not matched by a pick-up in growth.”

  

  His final rhetorical question: how long until this tipping point happens? The answer: 50 basis points.

  

  Now if only a 50 basis point spike in real yields would also put an end to all the other “strange things” taking place in a world which is burning every day, yet where the Dow Jones is partying like it’s 19,999.

  

  

• Hypernormalisation

  Submitted by Bryce McBride via Mises Canada,

  This past November, the filmmaker Adam Curtis released the documentary Hypernormalisation.

  The term comes from Alexei Yurchak’s 2006 book Everything was Forever, Until it was No More: The Last Soviet Generation. The book argues that over the last 20 years of the Soviet Union, everyone knew the system wasn’t working, but as no one could imagine any alternative, politicians and citizens were resigned to pretending that it was. Eventually this pretending was accepted as normal and the fake reality thus created was accepted as real, an effect which Yurchak termed “hypernormalisation.”

  Looking at events over the past few years, one wonders if our own society is experiencing the same phenomenon. A contrast with what economic policy-makers term “normalisation” is instructive.

  Normalisation is what has historically happened in the wake of financial crises. During the booms that precede busts, low interest rates encourage people to make investments with borrowed money. However, even after all of the prudent investment opportunities have been taken, people continue borrowing to invest in projects and ideas that are unlikely to ever generate profits.

  Eventually, the precariousness of some of these later investments becomes apparent. Those that arrive at this realization early sell up, settle their debts and pocket profits, but their selling often triggers a rush for the exits that bankrupts companies and individuals and, in many cases, the banks which lent to them.

  In the normalisation which follows (usually held during ‘special’ bank holidays) auditors and accountants go through financial records and decide which companies and individuals are insolvent (and should therefore go bankrupt) and which are merely illiquid (and therefore eligible for additional loans, pledged against good collateral). In a similar fashion, central bank officials decide which banks are to close and which are to remain open. Lenders made freshly aware of bankruptcy risk raise (or normalise) interest rates and in so doing complete the process of clearing bad debt out of the system. Overall, reality replaces wishful thinking.

  While this process is by no means pleasant for the people involved, from a societal standpoint bankruptcy and higher interest rates are necessary to keep businesses focused on profitable investment, banks focused on prudent lending and overall debt levels manageable.

  By contrast, the responses of policy-makers to 2008’s financial crisis suggest the psychology of hypernormalisation. Quantitative easing (also known as money printing) and interest rate suppression (to zero percent and, in Europe, negative interest rates) are not working and will never result in sustained increases in productivity, income and employment. However, as our leaders are unable to consider alternative policy solutions, they have to pretend that they are working.

  To understand why our leaders are unable to consider alternative policy solutions such as interest rate normalization and banking reform one only needs to understand that while such policies would lay the groundwork for a sustained recovery, they would also expose many of the world’s biggest banks as insolvent. As the financial sector is a powerful constituency (and a generous donor to political campaigns) the banks get the free money they need, even if such policies harm society as a whole.

  As we live in a democratic society, it is necessary for our leaders to convince us that there are no other solutions and that the monetary policy fixes of the past 8 years have been effective and have done no harm.

  Statistical chicanery has helped understate unemployment and inflation while global cooperation has served to obscure the currency depreciation and loss of confidence in paper money (as opposed to ‘hard money’ such as gold and silver) that are to be expected from rampant money printing.

  Looking at unemployment figures first, while the unemployment rate is currently very low, the number of Americans of working age not in the labour force is currently at an all-time high of over 95 million people. Discouraged workers who stop looking for work are no longer classified as unemployed but instead become economically inactive, but clearly many of these people really should be counted as unemployed. Similarly, while government statistical agencies record inflation rates of between one and two percent, measures that use methodologies used in the past (such as John Williams’ Shadowstats measures) show consumer prices rising at annual rates of 6 to 8 percent. In addition, many people have noticed what has been termed ‘shrinkflation’, where prices remain the same even as package sizes shrink. A common example is bacon, which used to be sold by the pound but which is now commonly sold in 12 ounce slabs.

  Meanwhile central banks have coordinated their money printing to ensure that no major currency (the dollar, the yen, the euro or the Chinese renminbi) depreciates noticeably against the others for a sustained period of time. Further, since gold hit a peak of over $1900 per ounce in 2011, central banks have worked hard to keep the gold price suppressed through the futures market. On more than a few occasions, contracts for many months worth of global gold production have been sold in a matter of a few minutes, with predictable consequences for the gold price. At all costs, people’s confidence in and acceptance of the paper (or, more commonly, electronic) money issued by central banks must be maintained.

  Despite these efforts people nonetheless sense that something is wrong. The Brexit vote and the election of Donald Trump to the White House represent to a large degree a rejection of the fake reality propagated by the policymaking elite. Increasingly, people recognize that a financial system dependent upon zero percent interest rates is not sustainable and are responding by taking their money out of the banks in favour of holding cash or other forms of wealth. In the face of such understanding and resistance, governments are showing themselves willing to use coercion to enforce acceptance of their fake reality.

  The recent fuss over ‘fake news’ seems intended to remove alternative news and information sources from a population that, alarmingly for those in charge, is both ever-more aware that the system is not working and less and less willing to pretend that it is. Just this month U.S. President Barack Obama signed the Countering Disinformation and Propaganda Act into law. United States, meet your Ministry of Truth.

  Meanwhile, in India last month, people were told that the highest denomination bills in common circulation would be ‘demonetized’ or made worthless as of December 30th. People were allowed to deposit or exchange a certain quantity of the demonetized bills in banks but many people who had accumulated their savings in rupee notes (often the poor who did not have bank accounts) have been ruined. Ostensibly, this demonetization policy was aimed at curbing corruption and terrorism, but it is fairly obvious that its real objective was to force people into the banking system and electronic money. Unsurprisingly, the demonetization drive was accompanied by limits on the quantity of gold people are allowed to hold.

  Despite such attempts to influence our thinking and our behaviour, we don’t need to resign ourselves to pretending that our system is working when it so clearly isn’t. Looking at the eventual fate of the Soviet Union, it should be clear that the sooner we abandon the drift towards hypernormalisation and start on the path to normalisation the better off we will be.

  

  

• Democratic Party 'Post-Election' Strategies

  Denial is not just a river in Egypt…

   

  

  Source: ComicallyIncorrect.com

  

  

• Is A Bitcoin "As Good As Gold"?

  Submitted by Stefan Wieler via GoldMoney.com,

  Introduction

   

  The price of Bitcoin seems to have exceeded the price of gold briefly for the first time this week; however, this comparison is completely arbitrary.

   

  Gold is measured in weight, while Bitcoin, much like currency, is an abstract form of money and can only be measured in units of itself. One Bitcoin is worth a lot more than 1 gram of gold, but a lot less than 1 tonne. Despite Bitcoin’s stellar performance in 2016, the size and depth of the cryptocurrency market is dwarfed by the $7 trillion gold market.

   

  Gold remains the only true global money with a size and volatility comparable to that of fiat currency.

   

  View the entire Research Piece as a PDF here…

  Bitcoin – or cryptocurrency itself – is the most exciting monetary experiment in modern times.

  Unlike fiat currency, it can’t just be printed, and it mimics the scarcity properties of gold in that it needs an enormous amount of energy to create one coin. The energy-proof of value is what links gold to the primary industries and allows it to maintain its purchasing power over incredibly long periods of time. Without it, any form of money will inevitably be corrupted over time and decay. Bitcoin has some of the same energy-proof of value that makes gold far superior to fiat currency, which can be created with the stroke of a key. Bitcoin, also like gold, is a global currency that may be universally accepted in the future. Even USD can’t make that claim.

  Bitcoin has some qualities that are not shared by any other form of money, most notably the potential total anonymity in electronic transactions; however, some might feel that aspect that may prevent the universal adoption of Bitcoin as money. Today, the global stock of Bitcoin is just $20 billion (despite its price rally) and its transaction volume is tiny, even when compared to more exotic currencies. That said, as the adoption of Bitcoin increases, governments may no longer be happy with the fact that it can be used for anonymous transactions and may prevent legitimate businesses from accepting it as money if they see this as a threat. Only time will tell. In the meantime, Bitcoin remains the only alternative to gold (and other precious metals) for savers to escape the built-in decay function of fiat currency otherwise known as inflation.

  Bitcoin is currently in the limelight because it has apparently exceeded the price of gold for the first time on some exchanges (although at the time of writing, Bloomberg still shows an average price of Bitcoin hasn’t crossed the gold price yet, but it seems just a question of time). We have no doubt that this will lead to a barrage of headlines in online media, and some mainstream outlets will jump on the bandwagon as well. After all, they already widely reported on a claim made by the Winklevoss brothers in mid-2016 that Bitcoin’s volatility had apparently fallen below the volatility of gold, and thus Bitcoin had become “better at being gold than gold”. We rebutted this claim and surely Bitcoin’s volatility shot back up to 100% shortly thereafter.

  Bitcoin has rallied almost USD500 last year and USD100 in the first two days of 2017 alone. At the time of writing, 1 Bitcoin was trading at USD1,135, while 1 oz of gold was trading at USD1,164. To some, it may seem like Bitcoin is about to be more valuable than gold, and though this is of course conceptually incorrect, it probably won’t stop the media pundits from publishing the headline anyway.

  Gold and elements can be measured by weight (oz, g, kg, t). Mass and weight are the measuring units endowed by nature. Fiat currencies, or any other abstract commodity or money (including Bitcoin), cannot be measured that way. An abstraction can only be measured in units of itself. Gold and silver are therefore the only form of money today that are traded in weight. Fiat currency on the other hand cannot be measured by anything other than other currency, at least since Nixon ended the convertibility to gold in 1971. In that respect, Bitcoin falls into the same category.

  

  Thus, when comparing units of gold to units of Bitcoin, one must first define what unit it is measured against. Is it grams (currently USD37/g), kilograms (USD37,000/kg) or tonnes (USD 37 million/tonne)? Or are we measuring it in the rather obscure measure of troy ounce (USD1,157/ozt), which, apart from exchange traded metals, is not used for anything else?

  Hence comparing the price of 1 Bitcoin vs 1 troy ounce of gold is a little bit like comparing the shares of Seaboard Corp. (USD4,179 per share) to those of Apple Inc. (USD116 per share) and concluding that Seaboard Corp. is worth 35 times as much. Clearly, measured accurately by market cap, Apple is the largest and most valuable company in the world and worth 126 times as much as Seaboard Corp.

  The same basic principle applies to money. Combined above-ground gold stocks are currently worth around $7 trillion. As we noted last year, that is more than all banknotes in circulation of all currencies combined (see Eliminating cash will also eliminate the checks and balances on banking policy and practice, February 22, 2016), and it certainly dwarfs the market cap of Bitcoin at around $18 billion. In fact, all crypto-currencies combined (we count 710) have a market cap of just $21 billion (see Figure 2).

  

  There is another obvious obstacle when comparing Bitcoin with gold: Volatility. High volatility is often pointed out against gold being used as medium of exchange and store of value. We will look the volatility of gold in more detail in an upcoming report, but in a nutshell, we find the volatility of gold (measured as standard deviation) is roughly comparable with currency, and gold has proven to be a much better store of value than any currency over the long run – even when interest is taken into account. Bitcoin’s volatility significantly exceeds that of both gold and currency. At times, Bitcoin’s volatility declines for a short period and can even approach the volatilities of gold and currency, but tends to shoot up violently shortly thereafter.

  

  However, standard deviation should not be confused with a measure of risk. The standard deviation quantifies the dispersion of returns; what it does not do is distinguish whether that dispersion comes from upward or downward moves.

  For example, an asset that has a 1% return every second day and 0% return every other day would exhibit an annualized standard deviation of 8%. An asset that has a -1% performance every second day and 0% every other day exhibits the same standard deviation. In an asset management context, the two assets may have the same risk. In fact, the negatively performing asset might reduce risk in a portfolio if it is negatively correlated to the other assets. But for a saver, the first asset is clearly less risky.

  Hence, instead of measuring volatility as standard deviation, we can measure just the downside deviation. This provides a better idea of the risks of money. How does this look for Bitcoin? Bitcoin’s downside deviation is still several orders of magnitude higher than that of gold or currency. Over the past two years, Bitcoin experienced a downside deviation of >45%. Since the beginning of data in 2010, it was >100%.

  

  The volatility – or to be precise, the downside risk – makes it difficult for Bitcoin to be more widely adopted as money. What speaks for Bitcoin is that it has shown stellar performance over its short lifespan, but this stellar performance comes with considerable downside risk. A merchant accepting Bitcoin as payment is exposed to this downside risk unless he instantly exchanges Bitcoins back to currency following the transaction. Even though a cycle takes about 6 minutes in theory, exchanging Bitcoin to currency actually takes about one hour to confirm the transaction and another hour to confirm the price, during which at the very least the merchant is exposed to the downside volatility. Holding Bitcoins permanently might hold huge upside, but that also comes with intolerable downside risk for a merchant. After all, merchants should spend their time and energy with what they are best at (selling goods) rather than trading currencies and Bitcoin.

  Another claim we don’t agree with is that Bitcoin is as free of counter-party risk as gold. What we have seen with Ethereum, another nascent cryptocurrency, is that these virtual currencies ultimately have a master key. With Ethereum, that key is controlled by a council that decides its future inflation rate; with Bitcoin, that key is controlled by Gavin Andresen, an engineer based in Massachusetts. There’s no guarantee that they won’t change the source code for the Bitcoin blockchain in the future, and when you “own” a Bitcoin you simply refer to the blockchain – a distributed ledger that tells you what and how much you own. In this regard, we don’t agree that Bitcoin does not have custodial or counter-party risk; the blockchain itself is the fat tail.

  This means that for now, gold remains the only global currency in which individuals and corporations can transact with no time delay, with price volatility comparable to that of major currencies yet without counter-party risk, and one that has been proven as a store of value for thousands of years.

  

  

• China’s tighter overseas currency use impacts Canadian real estate landscape

  The heavy exodus of the Chinese renminbi from mainland China put pressure on the country’s economy. In an effort to stymie the outflow, the Peoples Bank of China (PBOC) enacted new rules that are meant to help it exert more control over its currency…and that could spell trouble for the Canadian real estate market!

  A CANADIAN REAL ESTATE “BUBBLE”

  It is well known that the global financial crisis of 2009 was precipitated by a housing “bubble”in the United States. Real estate analysts south of the border, and even some local market watchers here in Canada, have long been predicting a similar bubble of sorts brewing in Canada. However, the Canadian “bubble” seems to have a much different origins.

  The Canadian Perspective

  It has long been suspected that the booming housing “bubble”, in great Canadian metropolitan cities like Toronto and Vancouver, was partly inflated as a result of foreign buyers. Predominant amongst those foreigners were property buyers and investors from China. Desperate to diversify their investments, and find better use of their capital outside the mainland, Chinese buyers are rumoured to be piling into real estate in large cities like Vancouver and Toronto.

  According to industry analysts, home prices in British Columbia increased from 6.6% year-over-year in 2014, to 20.5% in 2016; while Ontario saw increases from 5.2% to 11.6% over that same period. Clearly, by some definitions, this is a bubble in the making.

  The Chinese Perspective

  Every sovereign nation wants to (in fact must!) have maximum control on its currency, and China is no exception. However, once currency is converted into foreign exchange and sent out of jurisdictions influenced by the country, “control” becomes even more difficult to exert.

  The large outflow of currency from China is a concern to the authorities there – and they
  decided late last year to do something about it. Among some of the exchange control measures include:

  • Making it harder for individuals and institutions to convert renminbi into other currencies
  • Enforcing greater restrictions on transferring money from the mainland to other international jurisdictions
  • Requiring more transparency on the intent and motivation behind foreign exchange transactions
  • Mandating greater punishment for individuals and institutions who run afoul of the new rules

  While large Chinese corporations and global real estate players may still be able to skirt around these new regulations, it is expected that a large amount of property investment transactions by individuals could be impacted. As a result, Canada, and especially hot beds like Vancouver and Toronto real estate, should brace for potential fallout.

  MORE THAN A CHINA CONNECTION

  While China’s new forex rules will definitely put a damper on many Canadian real estate companies business plans, there is more bad news for the industry – largely emanating from within Canada. Both at the federal and provincial levels, governments are concerned about facing similar repercussions as that seen by our southern neighbor because of housing bubbles faced there. As a result:

  • In February 2016, the government of British Columbia implemented a new tax rate of 15% for properties sold in excess of $2-million; while also mandating collection of more data on foreign buyers
  • At the same time, the BC government also empowered municipalities like Vancouver to tax “empty homes”– mostly foreigner-owned investment properties that are vacant; waiting to be sold at a huge profit
  • On October 3, 2016, the federal government imposed more stringent rules for mortgage insurance, raising the barrier for high-ratio borrowers to qualify for loans
  • Additionally, through that same legislative move, some loopholes in Canada’s tax code, which were being used for preferential tax treatment by foreign buyers and non-permanent residents, were closed

  All of these moves are billed as initiatives that will ultimately make housing more affordable in hot markets like Vancouver and Toronto. However, their impact will be far-reaching in terms of broader impact to the nation’s real estate market.

  Early Signs

  It is too early yet to tell whether the new regimen will have any impact on Canada’s housing industry. But based on early reports from B.C, it does look like they are having a
  cooling effect, at least in the Vancouver area.

  Since the new Canadian/B.C rules took effect, there has already been a marked decline in foreign investment recorded in Vancouver. According to the B.C government’s information, foreign purchases in Metro Vancouver, which also includes Chinese purchasers, accounted for roughly 3% of the region’s residential real estate transactions from June 10^th to October 31^st, 2016. This number has dropped well below the 13.2% rate for similar
  transactions prior to the new legislation.

  WHAT THE FUTURE HOLDS

  The end game for China’s new currency export policy is to detract its citizens from annually spending an estimated $15 to $20 billion overseas. But China-analysts seem to think that, even though the country’s new forex laws are tightening the noose around real estate investors who may be contemplating Canadian investments; such transactions will likely not decline substantially – at least not in the immediate future. New ways to get renminbi out of China will evolve within months of old ones being shut down!

  Canadian real estate industry analysts however seem to have a different take on the issue. According to Canadian property market watchers, the number of resale homes projected for resale in 2017 across Canada are expected to fall by around 11.5% (compared to 2016); with B.C leading the pack (-23.8%), and Ontario (-10.5) declining by double-digits.

  This one-two punch, by federal and provincial jurisdictions, to the real estate market doesn’t bode well for the real estate industry, but especially for property owners. Researchers believe that the collective impact of the new housing regimens – both from China and from within Canada – will contribute to much slower increases to property values.

  Researchers forecast that on a national level, the average Canadian home’s resale value will increase by only 1.6% in the New Year, compared to a robust 9.5% increase in 2016. Ontario homes are set to post their weakest rate of increase in over 8 years – at 3%;
  while B.C home prices will rise by 1.9% (compared to a staggering 20.5% in 2016).

  With not much information available as of yet, about the impact of the policies discussed here, it is hard to predict what impact they are having on the country’s real estate industry. One thing is definite though: None of the steps implemented so far, by both China and various jurisdictions within Canada, seem “investor friendly”.

  ---

  1. http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housingforecastNovember2016.pdf

  2. http://www.news1130.com/2016/09/14/details-on-the-empty-home-tax-to-be-unveiled/

  3. http://business.financialpost.com/personal-finance/mortgages-real-estate/federal-government-closing-tax-loophole-used-by-foreign-home-buyers

  4. https://news.gov.bc.ca/releases/2016FIN0053-002520

  5. http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/housingforecastNovember2016.pdf

   

  

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• The False Economic Recovery Narrative Will Die In 2017

  Submitted by Brandon Smith via Alt-Market.com,

  Yes, the narrative of the “new normal” has been around for so long now that many people have simply grown used to it. The assumption is that the fiscal “new normal” has become the fiscal “normal,” and though the fundamentals continue to strain under the weight of poor global demand and historic debt levitated by extraneous fiat stimulus, the masses feel far less fear than is warranted. Hey, why should they? We’ve managed around eight years skating on thin ice, why shouldn’t we expect eight more years of the same?

  The banking elites have done the job they set out to do, which was to drive the economy to the very edge of the financial cliff, and then keep it suspended there until the general public became comfortable living next door to the abyss.

  Why do this? Well, the greater dynamic at play here is something the average person will not understand or refuses to examine — economics today is about mass psychology. The economy is a tool, or a weapon, by which international financiers can influence the public mind and the emotions of the mob. In order to grasp the mechanics of economics it is not enough to deal in statistics and trade principles; one must also grasp human behavior and how it is manipulated. One must acknowledge that in economics we witness the transmutation of societies by word and by force, by chaos and by order. Economics is alchemy.

  The globalists (in their twisted view) seek to change lead into gold, and just as in alchemy, these elements are a metaphor for psychological evolution. For the globalists, social engineering is a form of witchcraft; they see it as creation, or a grand form of architecture.

  But it is not creation. The globalists are incapable of such art because true art requires wisdom and empathy. All they know is how to deconstruct existing systems generated by nature and free men and rearrange the shattered pieces into something more oppressive and ultimately less interesting than what existed before. Give the internationalists a Mona Lisa and they will shred it, reconstitute it and regurgitate a paint by numbers coloring book.

  The globalists only know how to turn gold into lead.

  If you do not understand the reality of globalist influence in markets and the nature of economics as a weapon; if you actually believe that the economy operates purely on some kind of free-roaming free market principles, then you will never be able to wrap your head around the otherwise absurd behavior of our financial structure.

  The psychology of fiscal “recovery” is a vital tool for change and for developing false dichotomies. For example, I recently came across this article from the pervasive propaganda hub of Bloomberg. In it, Bloomberg outlines a story we are by now very used to hearing from the mainstream — that the presidential era of Barack Obama has left the economy of the U.S. in particular in “far better shape” as he leaves office than when he entered office.

  Now, anyone who has been reading my analysis for at least the past six months (if not the past ten years) knows exactly what I think about the current state of the economy and what is likely to happen in the near future. For those new to my position, here is a very quick summary along with linked evidence supporting my claims:

  From the 1990’s leading into the year 2007, the Federal Reserve engineered a massive debt and derivatives bubble through the use of artificially low interest rates in the housing market. Alan Greenspan, the presiding Fed chairman at the time, openly admitted in interviews that the central bank KNEW an irrational bubble had formed, but claims they assumed the negative factors would “wash out.” This is a constant meme set forward by the Fed — that they were essentially too stupid to foresee a collapse of the bubble they knew they had created. They prefer that the public believes that the Fed was “incompetent” rather than deliberately destructive.

   

  The low rates fueled a machine of mortgage backed securities and derivatives based on trillions of dollars in loans to people that had no ability or no intention of ever paying them back. The Fed had aid in this program from the ratings agencies, which labeled obviously toxic debt as AAA for years, and the SEC, which refused to investigate any legitimate claims of asset manipulation and ill intent. This corrupt behavior on the part of the SEC was showcased in the testimony of SEC whistle blower Gary J. Aguirre, who warned of dangerous debt pools and manipulation within the banking industry in 2006 before the derivatives collapse and also warned that the SEC interfered with any investigation attempts into the problem.

   

  This led to the well known “Great Recession” triggered in 2007/2008. The Fed along with numerous other central banks around the world had conjured a crisis and then offered their own solution to that crisis. Namely, the solution of massive fiat stimulus programs purchasing toxic debt, treasury bonds, corporate stocks and anything else that wasn’t nailed down.

   

  The “bailouts” and quantitative easing projects, however, were actually cover for a far larger program of untold trillions in overnight loans to corporations, domestic and foreign.  A never-ending river of dollars created out of thin air and pumped into companies for near zero interest. It was these free overnight loans that allowed international conglomerates to sidestep the monstrous black hole of derivatives debt they were circling and purchase their own stocks through stock buybacks, thus reducing the number of existing stocks on the exchanges and artificially boosting the price of the remaining stocks. This caused stock markets to skyrocket from near death to historic highs.

   

  In the meantime, government bureaucracy has worked tirelessly to manipulate statistics to falsely reflect an overall recovery. The stock market is much easier to manipulate than the fundamentals, so, the fundamentals must be misrepresented.  While some numbers slip through the cracks and issues of true supply and demand continue, the vast majority of the populace has little clue that the collapse of 2008 never actually stopped, it was just shifted into a state of slow motion.

   

  The Fed’s low interest rates, specifically on overnight loans, has allowed the economy to sputter along for eight years, and has greatly enriched the top .01% in the process. But now, their strategy is changing.

   

  The problem is that stimulus has a shelf life, and while certain stats can be skewed and the stock market can be inflated for a time, eventually, consequences must be accepted in the real economy for attempting to defy gravity for so long.

   

  The initial collapse was designed to foster an even greater event. Without the derivatives bubble, the central bankers never could have convinced the masses to accept the idea of a fiat stimulus bubble which would eventually put the dollar at risk, along with the overall U.S economy. Taking the brunt of the 2008 crash would have been painful, but not insurmountable. But with eight more years and tens of trillions in added debt along with increased geopolitical tensions and an equities bubble for the ages, the scale of the final stage of collapse will be truly unprecedented.

   

  The purpose of this final event will be to generate so much chaos and desperation that the public will be compelled to search for extraordinary solutions. The globalists will be ready with those solutions, including those they have openly outlined decades in advance in publications like The Economist.

   

  The end game? The formation of a single monetary and economic authority under the management of the International Monetary Fund, and the establishment of a single global currency using the IMF’s Special Drawing Rights as a “bridge” for locking national currencies into a harmonized exchange rate until they eventually become pointless, interchangeable and replaceable.

   

  The problem is, the globalists cannot possibly initiate this end game in a vacuum, otherwise, they would take the blame for the inevitable collateral damage to people’s lives as their “great global reset” is undertaken. The globalists need a scapegoat.

   

  Enter Donald Trump, the Brexit Referendum, and the rise of “populist” movements. For the entire first half of 2016, globalists were “warning” non-stop that a rise in populism (conservatives and sovereignty champions) would result in international financial catastrophe. It was as if they KNEW that the Brexit would succeed and that Donald Trump would win the election…

  This has been my position for the past half year — that globalists were planning to allow conservative and sovereignty movements to take the reigns of power, that they would allow the passage of the Brexit and the rise of Trump, just before they pull the plug on the system’s life support. The Federal Reserve in particular has already launched the final phase by beginning a series of rate hikes which will remove the safety net of free and cheap overnight loans to companies, thereby sabotaging equities markets. I specifically warned about this over a year ago when most analysts were stating that negative rates and QE4 were “just around the corner.”

  And this is where we are today. As noted above, Bloomberg writes an interesting bit of propaganda starting with a bit of truth. Here’s the beginning quote from their article:

  “Research suggests factors beyond the control of any U.S. president, not their actual policies, set the course of the economy. Yet with voters, President-Elect Donald Trump will secure much of the praise or blame when it comes to the impact of his agenda over the next four years.”

  The recovery narrative from 2008 to today was imperative to the globalist’s greater agenda. For a considerable portion of the public must be made to believe that under a socialist and decidedly globalist president (Barack Obama) the general trend in the economy was positive and that “things were getting better.” The rise of conservative movements today sets the stage for the final collapse and the IMF’s great reset, in which conservatives and sovereignty activists will be blamed, whether there is any evidence of culpability or not, for the crash that the globalists have spent the better part of two decades setting in motion.

  After the dust has settled, the argument will be that the world was "on course" before the Brexit, before Trump and before populism. The argument will be that globalism was working and conservatives screwed it up with their selfish nationalist endeavors. After the final crash and perhaps numerous deaths from poverty and violence, the argument will be that the only conceivable solution must be a return to globalism in an extreme form; or total global centralization, so that such a tragedy will never happen again.

  Bloomberg helps to set up the scenario, by claiming that Trump is “inheriting” a stable and improving economy compared to the economy that Barack Obama inherited:

  “While today’s economy is a mixed bag by historical standards, one thing is clear: Obama has left Trump a 2016 economy in a better state, by many measures, than when he was first elected president in 2008 in the middle of the worst downturn since the Great Depression.”

  Of course, Bloomberg fails to mention that the standards and statistics by which they measure economic “improvement” are entirely fraudulent.

  For example, real GDP is at -2 percent, not +2 percent as Bloomberg claims, when one calculates for distortions such as government spending, which is counted towards GDP even though government does not actually produce anything. Government can only steal productivity from citizens and reassign that wealth elsewhere.

  Bloomberg also cites a vastly improved unemployment rate. They once again refuse to bring up the fact that over 95 MILLION Americans are no longer counted as unemployed by the Bureau of Labor Statistics because they have been jobless for so long they do not qualify to be included on the rolls. This lie of reduced unemployment has been pervasive through the entirety of the Obama Administration.

  Bloomberg then mentions a greatly improved housing market that Trump will enjoy when he takes office. They certainly do not include the fact that pending home sales are now plummeting and home ownership rates in the U.S. are so low you have to go back to 1965 to match them.   They do not mention that the majority of the boost in home sales during Obama’s two terms was due to corporations like Blackstone buying up distressed mortgages and turning the homes into rentals. The housing market is NOT being supported by individuals and families seeking home ownership, but corporations snatching up real estate on the cheap and driving up prices.  Wall Street is now America's landlord.

  And there you have it. The globalist setup continues with mainstream outlets telling Americans that the economy is in ascension as Trump and populists move into positions of power, when in truth the economy is as dire as it ever was if not worse off. To add to the theater, Donald Trump has ventured to take credit for the sharp rise in stocks and the impression of improving economic stats.  In one of his latest tweets just after Christmas, he had this to say:

  "The world was gloomy before I won – there was no hope. Now the market is up nearly 10% and Christmas spending is over a trillion dollars!"

  Now, if you know anything about the true fiscal situation, you would think this statement is a severely idiotic move by Trump.  No incoming president with any sense would try to take credit for the largest equities bubble in history.  But, take credit is essentially what he did.  That said, if you ALSO understand that the globalist narrative is engineered so that conservatives take the blame for the coming crash, AND if you believe that Trump is knowingly participating in this narrative (as I now do after he lied about "draining the swamp" and front loaded his cabinet with banking elites), then Trump's statement makes perfect sense.  Trump is playing the role of a future bumbling villain, the populist maniac who gets too big for his britches and brings disaster down on people's heads.

  The false recovery narrative will indeed die in 2017, and it will be because the globalists WANT it to die while nationalists are at the helm. This is perhaps the biggest con game in recent history; with conservatives as the fall guy and the rest of the public as the gullible mark. One can only hope that we can educate enough people on this scenario to make a difference before it is too late.

   

  

  

• The High Life: Here Are The States Where The Most People Are Tokin' Up

  After a slew of states across the country have decided to legalize medical and/or recreational use of marijuana, the Washington Post decided to take a look at the impact this new legislation has had on weed consumption by state.  Ironically the map looks a lot like the 2016 electoral college map with the highest levels of consumption per capita coming from the liberal strongholds of New England and the West Coast.  Meanwhile, Montana seems to be the one conservative outlier where people love both their individual liberties and tokin’ up on the reg.

  Overall, a study by the U.S. Department of Health and Human Services found that 22 million Americans like to light up on a monthly basis with closer to 37 million admitting they partake at least once a year.

  According to one estimate by ArcView Group, a marijuana industry consulting firm, the legal marijuana market rang up $6.7 billion in sales in 2016.

   

  Legal or not, millions of Americans already use marijuana regularly. According to the most recent National Survey on Drug Use and Health, 8.3 percent of Americans age 12 and over — 22 million people — used marijuana on a monthly basis in 2015. And close to 37 million people used marijuana at least once that year.

  

   

  Meanwhile, it’s readily apparent that the highest marijuana use per capita comes from states where the drug has been legalized for medical and/or medicinal purposes.

  In the 2014-2015 period (years are paired for state-level data to provide bigger sample sizes), nearly a quarter of people in places where recreational pot is legal — like D.C. and Colorado — used some form of marijuana at least once a year.

   

  That’s nearly double the national average, and it’s close to three times the rate for the most pot-abstinent states, like Alabama, Mississippi and Iowa, where around 8 or 9 percent of people age 12 and older use pot yearly.

   

  Generally speaking, the Northeast and the West Coast are the two major marijuana hotbeds in the country. Marijuana use between the coasts is generally lower, with the notable exception of Colorado.

   

  The state-level data shows that places with the most marijuana use generally have some form of legal medical or recreational marijuana available. This is likely a two-way street: places with lax attitudes about marijuana use are more likely to approve legal marijuana, and marijuana availability probably leads to more lax attitudes about use.

  

   

  Finally, for our entrepreneurial readers, we just wanted to highlight that we see staggering opportunities for new KFC and Taco Bell franchises in parts of Montana, Colorado and New England.

  

  

  

• The Case Against Fed Reform

  Submitted by Tho Bishop via The Mises Institute,

  This week the 115^th Congress was sworn in, and there are some indications that Fed reform may be on the agenda. The combination of populist anger fueled by Ron Paul’s Presidential campaigns and the 2008 financial crisis coupled with the repeated failings of the Federal Reserve to meet their projections has created a rare window for monetary policy to be both politically advantageous, as well as so obviously needed that even politicians can see it.  

  The question now is what sort of reform is on the table.

  Congressional Reforms

  Last Congressional session saw proposals from both the House and the Senate.  

  From the House we have the FORM Act, which would require the Fed to adopt a monetary policy rule and explain to Congress whenever they deviate from that rule. The FORM Act also calls for an annual GAO audit of the Federal Reserve, doubles the number of times the Fed Chairman testifies before Congress, and makes some other tweaks to the makeup and protocol of the Federal Reserve Board. Since the FORM Act passed the House in 2015, there is a good chance we will see it resurrected in 2017.

  On the Senate side, Banking Committee Chairman Richard Shelby has pushed for the Financial Regulatory Improvement Act. Not only does it lack a catchy acronym, but its reforms to the Fed are far more modest than the FORM Act. The meat of the bill focuses on changes to the Fed board. The head of the New York Fed would no longer be appointed the banks board of the directors, but would instead be nominated by the President and confirmed by the Senate – just like the Federal Reserve Chairman. It would also grant powers to the Fed’s regional presidents that currently only reside with the board of directors.

  Though early drafts of the Senate bill called for the Fed to adopt rules-based monetary policy, this ended up being stripped from the final proposal due to Democratic opposition – largely because much of the Hill focus has been on the Taylor rule, which many Fed advocates fear is too restricting.

  The Battle Over the Taylor Rule

  Recently this debate has played out in the pages of the Wall Street Journal with Neel Kashkari and John Taylor exchanging op-eds on the virtues of rules-based policy.

  Though Kashkari begins with a broad attack on monetary rules, it quickly devolves into a focused attack on the Taylor Rule which he argues “effectively turn[s] monetary policy over to a computer, rather than continue to let Fed policy makers use their best judgment to consider a wide range of data and economic trends.” Of course Kashkari ignores that the “best judgement” of Fed policy makers has been widely criticized – and not just by Austrians who oppose any sort of Fed policy at all.

  Kashkari’s allusion to a computer-guided monetary policy is may be an attempt to get readers to conflate recent monetary rules proposals to the views of Milton Friedman that have not aged particularly well. In Taylor’s response, he criticized the portrayal for being dishonest while pointing to various analysis critical of the Fed behavior since the crisis.

  What’s more interesting than the finer details of the debate over the relative virtues of the Taylor rule is how that specific proposal has largely been the single focus of those critical of rules-based policy. Though support for the Taylor rule has become largely split on partisan lines, there is another monetary rule that has growing support from across the ideological spectrum.

  The Appeal of NGDP Targeting

  Following 2008, NGDP targeting has grown from a topic of conversation largely limited to blogs such as Scott Sumner’s The Money Illusion, to something discussed openly among central banks, prominent publications, and even Presidential candidates. The proposal would require a central bank to set a nominal goal for GDP – without taking into account inflation or deflation – and allow it to use a variety of tools to reach that goal. Since the policy gives Fed critics a black and white standard to measure its performance, without putting too many restrictions on the Fed as to ruffle the feathers of Fed proponents, it has been able to build a broad coalition of support. As a result, you have progressives such as Christina Romer and Brad DeLong on the same side as the Cato Institute and the Mercatus Center.

  Of course widespread appeal is not the same thing as sensible policy. As Shawn Ritenour sums up his brilliant refutation of the proposal:

  NGDP targeting advocates end up fostering the monetary illusion that scarcity can be overcome and prosperity can be achieved via monetary inflation.

  Unfortunately policy does not have to be sensible to become reality.

  Should the House succeed in creating pressure on the Senate to act on a version of the FORM Act, it would not be surprising to see the discussion move away from the Taylor rule to NGDP targeting – with advocates selling its broad appeal as its leading virtue. The Fed Audit, which has consistently been fought by the Senate, could easily be dropped – with Republican legislators being able to point to the endorsement of the beltway’s leading libertarian think tanks as evidence of being tough on the Fed.

  The Real Problem with Rules-Based Monetary Policy

  Of course no matter if it is NGDP targeting, the Taylor rule, or even a rule that would have the Fed tie itself to gold – the entire debate about rules-based monetary policy ignores the obvious: rules are meant to be broken.

  We’ve already seen this play out routinely at the Fed, with both sides of the isle usually accusing the Fed of not upholding one side of its current dual mandate. History is littered with examples of government financial institutions ignoring and modifying rules whenever they directly conflict with the judgment of current leaders. As recently as 2015, the IMF arbitrarily changed a long-standing policy on loan requirements so it could help Ukraine. The US government changed long-standing monetary policy rules when faced with a crisis, such as when it cut the dollar’s connection with gold for both domestic and international payments.

  Be it Constitutional rights, contractual obligations, or its own self-imposed rules, when push comes to shove the government officials have proven they will side with their own judgment – no matter what the rule is.

  So while there are certainly arguments to be made in favor of a rules-based Fed over the pure discretion of the current PhD standard, such reform should not be viewed as a solution to the real issue, which is a central bank having a monopoly on money at all. Instead of a Fed reform, we need Fed competition: eliminate legal tender laws, remove the burdensome taxes placed on gold, Bitcoin and other potential currencies, and give Americans a true alternative to Federal Reserve notes for those who want it.

  Anything short of that continues to let the Fed’s monopoly on money continue, and is therefore no real solution at all. 

  

  

• In Stunning Last Minute Power Grab, Obama Designates Election Systems As "Critical Infrastructure"

  In a stunning last minute power grab by the Obama administration with just 14 days left in his Presidency, the Department of Homeland Security released a statement this evening officially declaring state election systems to be “critical infrastructure.”  The statement from DHS Secretary Jeh Johnson defines “election infrastructure” as “storage facilities, polling places, centralized vote tabulations locations, voter registration databases, voting machines” and all “other systems” to manage the election process…so pretty much everything.

  I have determined that election infrastructure in this country should be designated as a subsector of the existing Government Facilities critical infrastructure sector. Given the vital role elections play in this country, it is clear that certain systems and assets of election infrastructure meet the definition of critical infrastructure, in fact and in law.

   

  I have reached this determination so that election infrastructure will, on a more formal and enduring basis, be a priority for cybersecurity assistance and protections that the Department of Homeland Security provides to a range of private and public sector entities. By “election infrastructure,” we mean storage facilities, polling places, and centralized vote tabulations locations used to support the election process, and information and communications technology to include voter registration databases, voting machines, and other systems to manage the election process and report and display results on behalf of state and local governments.

  Of course, it’s likely not a coincidence that the DHS made this announcement just hours after the “intelligence community” declassified their “Russian Hacking” propaganda which basically noted that RT has a very effective social media distribution platform while once again providing absolutely no actual evidence.

  

   

  Johnson’s statement goes on to note that while many “state and local election officials are opposed to this designation” he went ahead with his decision anyway, because that’s just what the Obama administration does.

  Prior to reaching this determination, my staff and I consulted many state and local election officials; I am aware that many of them are opposed to this designation. It is important to stress what this designation does and does not mean. This designation does not mean a federal takeover, regulation, oversight or intrusion concerning elections in this country. This designation does nothing to change the role state and local governments have in administering and running elections.

   

  The designation of election infrastructure as critical infrastructure subsector does mean that election infrastructure becomes a priority within the National Infrastructure Protection Plan. It also enables this Department to prioritize our cybersecurity assistance to state and local election officials, but only for those who request it. Further, the designation makes clear both domestically and internationally that election infrastructure enjoys all the benefits and protections of critical infrastructure that the U.S. government has to offer. Finally, a designation makes it easier for the federal government to have full and frank discussions with key stakeholders regarding sensitive vulnerability information.

   

  Particularly in these times, this designation is simply the right and obvious thing to do.

  Of course, one of the most vocal opponents of this move has been Georgia Secretary of State Brian Kemp who recently told Politico it is nothing more than an attempt to “subvert the Constitution to achieve the goal of federalizing elections under the guise of security.”

  During an earlier interview with the site Nextgov, Kemp warned: “The question remains whether the federal government will subvert the Constitution to achieve the goal of federalizing elections under the guise of security.” Kemp told POLITICO he sees a “clear motivation from this White House” to expand federal control, citing Obama’s health care law, the Dodd-Frank financial-reform legislation and the increased role of the Education Department in local schools.

   

  To some election officials, this sounds like the first stage of a more intrusive plan.

   

  “I think it’s kind of the nose under the tent,” said Vermont Secretary of State Jim Condos, a Democrat. “What I think a lot of folks get concerned about [is] when the federal government says, ‘Well, look, we’re not really interested in doing that, but we just want to give you this,’ and then all of a sudden this leads to something else.”

  Meanwhile, Kemp continued on by noting that “this administration only has 15 days left in its term” and to make such a critical decision during the 11th hour “smacks of partisan politics.”

  But we’re sure it’s nothing, Obama doesn’t really strike us as the type to play the “partisan politics” game.

  

  

• Worst. Recovery. Ever.

  As the champagne glasses clink in Washington over a record-breaking streak of job growth on record (as the percent of the population employed slumped), and the fastest wage growth since the start of the recovery (for managers), we just wanted to remind a few blinkered media types that Obama’s “recovery” has officially been the worst recovery in US history (despite adding almost $10 trillion to the national debt)…

  When ‘fake news’ and ‘peddling fiction’ meet fact…

  

  Source: JPMorgan

  Not quite as rosy an economic handover to Trump as The White House would like everyone to believe.

  

  

• John Harwood Asks "Who Do You Believe America?" – Gets Surprising Answer

  CNBC Political reporter, friend of Hillary, and Democratic Party sycophant John Harwood took to Twitter last night to ask:

  “Who do you believe America? Wikileaks, or US Intel Officials?”

  The response, which emerged from his immediate following which one would surmise, should gravitate toward Harwood’s liberal ideology and thus respond in a way Harwood expected, was yet another slap in the face for the establishment’s perspective on how the world should really run.

  

  Who do you believe America?

  — John Harwood (@JohnJHarwood) January 6, 2017

  And that Mr. Harwood is why Donald Trump is about to become President! When will you and your ilk wake up to this?

  As Trump tweeted earlier in the week: “It is for the American people to make up their minds as to the truth.”

  This merely confirms Lou Dobbs’ survey from earlier in the week.

  #LDTPoll: Who do you believe on the Russian hacking allegations?

  — Lou Dobbs (@LouDobbs) January 4, 2017

  

  

• The Fourth-Generation War

  Submitted by David Galland via GarretGalland.com,

  For most people, the term “4GW” will conjure visions of a new and improved data service for their mobile devices. For members of the military and intelligence community, 4GW means something entirely different: Fourth-Generation Warfare, a form of warfare where the lines between civilians and combatants, political and military goals, and even the weapons to be used in fighting the war are blurred.

  Smudged to the point where even identifying the warring parties is difficult.

  To understand the 4GW, look no further than last month’s attack on a Christmas market in Berlin, Germany.

  • Instead of using a bomb, gun, or even a knife, the attacker used a commercial truck.

  • The attacker was from Tunisia, a country with no clear grievances against the Germans.

  • He was an adherent of Islam (natch). Given the attack was directed against innocent bystanders at a Christmas market, we assume—but don’t know—that it was motivated by a religious goal. But to what end? We can have no idea.

  • And why Germany, the country that had provided succor to the man and his family as refugees? Was the attack part of a broader strategy to complete the Islamization of Germany? All of Europe?

  • Or was it to force the Europeans to withdraw from the Middle East—even though the European footprint in the Middle East is barely visible compared to the US and Russia?

  • Perhaps it was just a target of convenience—in which case, what’s the point(s) the attacker was trying to make?

  • And who, exactly, is the enemy the “West” is fighting against? Is it ISIS, which took credit for the attack? We think that’s right, but really can’t know. Maybe the ISIS spokesperson was just being opportunistic in taking credit for an act of an individual who had become overly emotional as a result of indoctrination by a radical mullah?

  • Who does Germany retaliate against? They could lob missiles into ISIS strongholds, but as those strongholds are not citadels, but rather cities populated by innocents—captives even—how effective can that be?

  • Alternatively, whom does Germany negotiate with to bring an end to the hostilities?

  I could go on, but I think the point is clear: 4GW warfare is so distributed—between weapons, tactics, cultures, places, ideologies, and leadership—that dealing with it requires an entirely different approach.

  Trying to get a handle on how one counters such an amorphous enemy, because it is unlikely the attacks will stop anytime soon, and maybe not in our lifetime, I reached out to Scott Taylor, publisher and editor of Esprit de Corps magazine. Scott has extensive experience in the Middle East, as a soldier, author, and war correspondent.

  He is also one of the few people to have been kidnapped by Islamists and lived to tell about it. Here’s a biographical sketch from the Esprit de Corps website.

  For more than 25 years, Taylor has reported from numerous global hot spots, including Kuwait, Cambodia, Western Sahara, Croatia, Bosnia, Serbia, Kosovo, Iraq, Nagorno-Karabakh, South Ossetia, Libya and Afghanistan. In 1996, Taylor won the prestigious Quill Award and in 2008 he was named Press TV’s “Unembedded Journalist of the Year.” In 2011, Taylor won a Telly Award for the CPAC documentary Afghanistan: Outside the Wire.

  On September 7, 2004, while reporting on the U.S. occupation, Taylor was taken hostage in Northern Iraq by Ansar al-Islam Mujahadeen. Taylor and his Turkish colleague were subjected to torture and severe abuse before being released five days later. That harrowing ordeal was recreated by National Geographic Channel in an episode of the popular series Locked Up Abroad.

  With Scott’s bonafides established, here are my questions and his answers.

  Q. Are there any historical precedents for the current conflict being fought between the Islamists and the Western world?

  First of all, we need to stop misidentifying the current conflict as Islam versus the West. The vast majority of the blood being spilled in all of these theatres (Iraq, Syria, Libya, Afghanistan, Turkey) is Muslim vs. Muslim.

  The simplistic division of sides is Sunni versus Shiite, but that further divides into secular versus fundamentalist, and then again into ethnic factions (example: Kurd versus Turk, Arab versus Kurd). Much like the Crusades of old, it is the West’s interference in their territorial squabbles that makes us a target for retaliation.

  Q. Is there any sort of prevailing theory about how a government can fight back given the lack of any clear enemy or even stated objective for the attacks?

  The current tactic of Western security forces appears to be the mounting of large shows of force after a terrorist attack has taken place. Hordes of heavily armed police with armored vehicles appear at all major transit hubs and public spaces to present the appearance of an armed camp.

  However, given the randomness of the targets, the variety of weapons employed (simply driving a truck into a crowd, for instance), and the apparent willingness for the attackers to die for their cause, makes these attacks all but impossible to defend against.

  Q. The Israelis, which arguably have the most experience in fighting a 4GW conflict, have used retribution against family members of the terrorists— including the controversial policy of destroying family homes—as a countermeasure. Any thoughts?

  If the Israelis and Palestinians were presently cohabitating in a state of mutual bliss, I would say that they were on the right track. However, as Israel remains in a state of perpetual threat of attack, I would say that employing retaliatory attacks against a culture steeped in revenge (an eye for an eye) is not a smart move.

  If Trump starts attacking terrorist families, the violence cycle will only accelerate… and become far more personal.

  Q. Any sense of how this all ends? Or is this conflict likely to be with us for the foreseeable future?

  Humankind is the most self-destructive species on the planet. Historically, we continue to invest in ever more creative ways to kill our fellow humans… and to protect ourselves from evolving threats.

  The map of the Middle East will need to be redrawn to recognize the existing ethnic divisions (as opposed to the arbitrary colonial boundaries drawn up by Britain and France in 1917). The abject poverty and illiteracy of Afghanistan will condemn it to decades more bloodshed, and countries such as Libya will need to be reunified by force and subdued for a generation before they can once again enjoy stability and prosperity.

  Q. Do you believe the US should stop meddling in the Middle East? Having read a fair bit on the history of the Crusades, it is revealing that so many cities regularly under attack back then are again under attack now. And, per your comments, invariably by other Muslims. Given that history, one can only ask, "Why would any outside nation want to deal with that mess?"

  If the US could divest itself of the need to import oil, they could afford to ignore events in the Middle East. It may sound crazy, but a huge opportunity was missed in the aftermath of 9/11 when Americans might have accepted (or been forced to accept) wartime rationing of fuel. This would have hurt the automobile industry but at the same time created a massive boom for alternative modes of transportation, such as production of e-bikes and mass transit systems.

  America, like Canada, is protected by the Atlantic and Pacific Oceans. Our “defense” departments should be correctly called “war departments.”

  So, what’s the new administration to do?

  Carry On

  Per Scott’s comments, I think it behooves us to accept the reality that there may be little, and maybe nothing, the nation-states with all their intelligence services and blunt military power can do to stop the 4GW enemies.

  Repurposing the prescient words of John F. Kennedy on the topic of assassins, "If anyone wants to do it, no amount of protection is enough. All a man needs is a willingness to trade his life for mine."

  Time and again, the Islamic terrorists have shown a willingness to trade their lives to carry out their dastardly deeds. That’s just how they roll.

  If there is good news, it is that the damage these terrorists do is typically limited. Returning to the Christmas attack in Berlin, that attack took the lives of 12 people. Approximately the number of people who die every day and a half in German automobile accidents. So while the attack was unsettling, especially for the victims or someone close to the victims, it poses no existential threat to the German nation.

  Even 9/11—the apex of success as far as these attacks go—adds up to just 31 days of traffic fatalities in the US.

  Could the jihadists someday succeed in getting their hands on nukes? Or blow up a liquid petroleum depot near a population center? Anything is possible. However, governments around the world are acutely aware of the threats and take measures to guard the targets with the potential for causing mass destruction. It will take more than a maniac driving a truck or wielding an AK-47 to breach one of the more sensitive installations.

  As a consequence, the path of least resistance suggests the 4GW will continue to unfold mostly as low-level attacks that, in the overall scheme of things, do little physical damage.

  Keep in mind that, on average, 43 people are murdered every day in the US and 93 die in car accidents. By comparison, in the 16 years since 2000, there have been a total of 3,064 people killed by terrorists in the United States, but of that number, 2,997 died in the 9/11 attacks.

  Doing the math, outside of that horrific event, there have been a total of 67 people killed in the US by terrorists over the past 16 years. Which means that over the period, death by terrorism in the US doesn’t add up to even a single day of automobile fatalities.

  To be clear, my purpose here is to provide perspective about the fourth-generation war. That perspective is necessary given how energetically the mainstream media sensationalizes every attack, even if it only involves a single stabbing. By doing so, they have effectively turned the entire nation into fear-biters.

  That’s not to say that terrorism isn’t a concern. It’s just, per Scott’s comments above, that most of it involves fighting between Muslim sects in a very limited number of countries. This from a comprehensive report on global terrorism by the US State Department:

  Although terrorist attacks took place in 92 countries in 2015, they were heavily concentrated geographically. More than 55% of all attacks took place in five countries (Iraq, Afghanistan, Pakistan, India, and Nigeria), and 74% of all deaths due to terrorist attacks took place in five countries (Iraq, Afghanistan, Nigeria, Syria, and Pakistan).

  Here’s a tip: Don’t live in Iraq, Afghanistan, Nigeria, Syria, or Pakistan.

  While incidents like the truck attacks in Nice and in Berlin get a lot of media attention, when viewed from an actuarial perspective, they are gnats on an elephant. And it’s important to keep this in perspective, because overblown fears within the population provide license to the state to expand its powers and trample the rights of the individual in pursuit of a perfect level of security that simply cannot be attained.

  It is worth noting that since 9/11, the United States has spent over $7.5 trillion in defense and homeland security, much of which cannot even be accounted for.

  And that tally is just the thin edge of the cost of overreacting to the terrorists, a cost that includes the loss of personal freedom and the creation of indelible bureaucracies that grow in power every day.

  Remain vigilant, sure. But above all, as the Brits like to say, “Keep calm and carry on.”

  

  

• "Depressed" Millennials Are Convinced The Trump Economy Is Going To Implode

  When asked about the economic outlook for America, millennials were the only generation to predict 2017 would be worse than 2016. As Bloomberg reports, the feeling of impending doom wasn’t exclusively reserved for 2017: about a third of millennials surveyed said they don’t think they’ll have enough money to comfortably retire at all.

  While the new year marks a fresh start for many, millennials aren’t so optimistic.

  

  In fact, this generation is the only one to say they’re feeling worse, financially, about 2017 than 2016.

  As Bloomberg details, in the days following the election, Country Financial Group, an insurance and investment firm, conducted its annual financial security index and found that the score was lowest for millennials, defined as those between 18 and 34 years old, at 60.9 (the highest score is 100).

  To determine its score, used a survey that asked over 1,000 Americans questions about their financial stability, like whether they had savings, or if their assets were adequately assured. Independent research firm GfK collected the data. Generation X-ers, (people aged 35 to 49), had a score of 66.6. Boomers (between the ages of 50 to 64) came in at 69.2. The Silent Generation, defined as those over age of 65, had the highest score at 71.2.

  

  As Bloomberg notes, given that the poll was conducted in the days following the election and millennials overwhelmingly supported the losing candidate, these survey results might be swayed by some election-related depression.

  
  

  

  

• Florida Shooter Had Been Sent To A Mental Hospital Over "ISIS Ties", Was Investigated For Child Porn

  As more details emerge about the Ft. Lauderdale airport shooter, Esteban Santiago-Ruiz, 26, who on Friday afternoon opened fire at the baggage claim area at the airport, killing 5 and wounding 8, we start to get a detailed glimpse not only into his past, but his numerous recent interactions with authorities.

  

  Esteban Santiago, the suspected shooter at Ft. Lauderdale Airport on Jan. 6, 2017

  According to law enforcement officials, Santiago was found with an active military ID and is an American citizen, born in New Jersey. Previous known addresses include Penuelas, Puerto Rico and Anchorage, Alaska.

  They add that in November 2016, just two months ago, he walked into an FBI office in Anchorage claiming that the government had “forced him to watch ISIS videos” and to fight for ISIS. According to a slightly different narrative presented by CNN, source said that Santiago was hearing voice telling him to join the Islamic State. Ultimately he was sent to a psychiatric hospital.

  AP confirms that Santiago’s brother said the suspect had been receiving psychological treatment while living in Alaska. Bryan Santiago told The Associated Press that his family got a call in recent months from 26-year-old Esteban Santiago’s girlfriend alerting them to the situation.

  Bryan Santiago said he didn’t know what his brother was being treated for and that they never talked about it over the phone. He said Esteban Santiago was born in New Jersey but moved to the U.S. territory of Puerto Rico when he was 2 years old.

  He said Esteban Santiago grew up in the southern coastal town of Penuelas and served with the island’s National Guard for a couple of years. He was deployed to Iraq in 2010 and spent a year there as a combat engineer with the 130th Engineer Battalion, the 1013th engineer company out of Aguadilla, according to Puerto Rico National Guard spokesman Maj. Paul Dahlen.

  Sen. Bill Nelson of Florida said that the gunman was carrying a military ID that identified him as Esteban Santiago, but that it was unclear whether the ID was his. Nelson gave no further information on the suspect.

  As CBS adds, in 2011 or 2012, Santiago was investigated by Homeland Security Investigations for child porn. Three weapons and a computer were seized, but there was not enough evidence to prosecute, according to law enforcement sources. Santiago also has a record for minor traffic violations and was evicted in 2015 for not paying rent.

  Furthermore, AP notes that according to a  military spokeswoman Santiago received a general discharge from the Alaska Army National Guard last year for unsatisfactory performance.

  Lt. Col. Candis Olmstead did not release details about 26-year-old Esteban Santiago’s discharge in August 2016. Olmstead said that he joined the Guard in November 2014.

  Puerto Rico National Guard spokesman Maj. Paul Dahlen said that Santiago was deployed to Iraq in 2010 and spent a year there with the 130th Engineer Battalion, the 1013th engineer company out of Aguadilla. Olmstead also said that Santiago had served in the Army Reserves prior to joining the Alaska Army National Guard.

  Previously, a spokeswoman from the Canadian Embassy says the suspect in the shooting at the international airport in Fort Lauderdale has no connection to the country and did not fly to Florida from there. Embassy spokeswoman Christine Constantin said in an email to The Associated Press that the suspect did not travel from Canada and was not on an Air Canada flight. She says the suspect has no connection to Canada.

  The shooting happened at the airport’s terminal 2, where Air Canada and Delta operate flights. Five were killed and eight wounded. Constantin’s email says, “We understand from officials he was on a flight originating in Anchorage, transiting through Minneapolis and landing in Ft. Lauderdale.”

  Meanwhile, authorities are looking into what event may have set off the unstable Santiago.

  Law enforcement sources said the suspected gunman in a deadly attack at Fort Lauderdale-Hollywood International Airport got into an argument during his flight from Alaska to Florida. They’re now investigating whether that’s what set off a shooting rampage CBS reports.

  Esteban Santiago-Ruiz, 26, took a flight from Alaska to Florida Friday with a stop in Minnesota, officials said. Somewhere along the way, he got into an argument.

  According to Broward Commissioner Chip LaMarca, Santiago-Ruiz arrived from a flight with a gun that he checked in. “He claimed his bag and took the gun from baggage and went into the bathroom to load it. Came out shooting people in baggage claim,” LaMarca said.

  Earlier reports claimed Santiago-Ruiz came in on a flight from Canada. On the company’s Twitter account, Air Canada confirmed that no one by that name was on their flight. Air Canada flights arrive to Terminal 2, where the shooting took place.

  Police were able to apprehend the suspect without having to fire their own weapons when he apparently ran out of bullets.

  

  

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• Silver Dumps, Peso Jumps As Mexican Central Bank Intervenes (Again)

  If at first you don't succeed, intervene again! For the second time today (at midnight ET), Banxico officials confirmed the central bank entered the market to sell US dollars in an attempt to strengthen the peso. Now we await the next Trump tweet to take the peso back down…

  As Bloomberg reports, according to a Banxico official who asked not to be identified, the central bank is looking to strengthen Mexican peso.

  For now the move is far less impressive – which is odd given the lack of liquidity and an irrational peso buyer…

  

  We have one other question… Is Banxico dumping its silver to receive dollars to sell to buy pesos?

  

  Around $200mm notional of Silver was dumped in those few minutes.

  As we noted at their earlier attempt, we can't really blame Banxico for intervening: with the local population, of which over half lives in poverty, angry and protesting the recent "Gasolinazo", or 20% increase in the price of gas, the crashing currency is sure to send many other prices, especially of imported goods, through the roof while sending much of the population over the edge. Which is why Goldman's Alberto Ramos agrees that the central bank had to do something:

  "In our assessment, some FX market intervention at this juncture is justified since market liquidity conditions became somewhat tighter, the MXN entered overshooting territory (excessively undervalued) and from current levels, significant additional exchange rate weakness, while making exporters even more competitive, can threaten two valuable public goods: price and local financial market stability. A very weak currency can have significant medium-term costs for the broader economy as it is likely to add pressure on inflation and wages (which would over time reduce the cost-competitiveness of the Mexican exporters) and prompt to a tighter monetary stance. Overall, higher inflation/wages and higher rates would be a clear negative shock to the non-tradable sectors of the Mexican economy, for they would not enjoy the exporters (tradable sectors) benefit of a weak currency.

  So much for a "brave new world" in which global trade imbalances can be resolved without central bank intervention. If anything, the events from the first 4 days of 2017, in which we first saw a dramatic indirect intervention by the PBOC which sent the overnight CNH deposit rate to the highest ever in a desperate attempt to crush shorts, and then the Mexican direct intervention, have confirmed that 2017 will be very much like 2016 when it comes to central bank intervention, if not more so.

  However, as Goldman admits, Banxico made one mistake which explains why virtually the entire post-intervention move has been faded:

  In our assessment, if the MXN remains under pressure the authorities should entertain the possibility of using different intervention instruments, such as USD Dollar swaps, for they are not a direct claim on reserves and offer valuable FX hedging protection to the market in a period of significant uncertainty but no large spot market outflows.

  There is a problem with using reserves to fight a currency war, one which China is very familiar with:

  

  On the other hand, using USD swaps is precisely what the PBOC shifted to late in 2015 (perhaps as advised by Goldman then too) when it too realized that using reserves was a very rudimentary (if effective) attempt at intervention. The only problem is that it eventually catched up to the central bank, and just like in the case of China which used swaps for about 3-4 months even as the capital outflows persisted, it ultimately had to return to draining reserves for a full blown intervention.

  Ironically, even that has failed, and as we have documented extensively in the past 2 months, the PBOC is now scrambling with intraday gimmicks like crushing shorts using deposit rates. That too only works for a while.

  Meanwhile, Mexico is caught between a rock and a hard place, because while the currency is depreciating, and the "MXN is now visibly undervalued versus theoretical fundamental fair-value under any of the three model metrics we use" Goldman warns that any further depreciation can undermine the inflation backdrop and/or risk unleashing destabilizing financial forces.

  Which is all Trump needs: a several economic crisis just south of the border.

  

  Actually, there is another thing Trump "needs": Mexico launching an all out currency war against the US, whether through reserve draining (which would hit US assets) or USD swaps. Should the central bank intervene on a few more occasions to offset today's failed revaluation attempt, which the market is now openly mocking, we eagerly await the barrage of tweets that will be launched by the Trump account as the president-elect, having slammed the occasional stock, shifts to FX.

  Trump aside, what happens next? Once today's intervention fails, the Peso is looking at a lot more downside, and as Rabobank's Christina Lawrence writes,the MXN could fall as far as 23, as there "is little room for MXN relief as Banxico is highly unlikely to provide any lasting support for peso as market is too liquid and Mexico’s reserves will start to evaporate very quickly." Putting trading volumes in context, MXN is the 10th most liquid currency globally with an average daily volume in the spot market of $43b and $112b when including options.

  Rabo says that it “expects volatility to rise further and for the skew to continue moving to the right as market participants move to protect themselves from further USD/MXN upside”

  Finally, the real message here is that the Banxico’s intervention "may also be seen as sign of greater underlying problems." Bingo.

  

  

• DNC Refused FBI Access to Its Servers … Instead Gave Access to a DNC Consultant Tied to Organization Promoting Russia Conflict

  CNN reports:

  The Democratic National Committee "rebuffed" a request from the FBI to examine its computer services after it was allegedly hacked by Russia during the 2016 election, a senior law enforcement official told CNN Thursday.

   

  "The FBI repeatedly stressed to DNC officials the necessity of obtaining direct access to servers and data, only to be rebuffed until well after the initial compromise had been mitigated," a senior law enforcement official told CNN. "This left the FBI no choice but to rely upon a third party for information.

   

  ***

   

  The FBI instead relied on the assessment from a third-party security company called CrowdStrike.

  As first reported by George Eliason, CrowdStrike's Chief Technology Officer and Co-Founder Dimitri Alperovitch – who wrote the CrowdStrike reports allegedly linking Russia to the Democratic party emails published by Wikileaks – is a fellow at the Atlantic Council … an organization associated with Ukraine, and whose main policy goal seems to stir up a confrontation with Russia.^[1]

  The Nation writes:

  In late December, Crowdstrike released a largely debunked report claiming that the same Russian malware that was used to hack the DNC has been used by Russian intelligence to target Ukrainian artillery positions. Crowdstrike’s co-founder and chief technology officer, Dmitri Alperovitch, told PBS, “Ukraine’s artillery men were targeted by the same hackers…that targeted DNC, but this time they were targeting cellphones [belonging to the Ukrainian artillery men] to try to understand their location so that the Russian artillery forces can actually target them in the open battle.”

  Dmitri Alperovitch is also a senior fellow at the Atlantic Council.

   

  The connection between Alperovitch and the Atlantic Council has gone largely unremarked upon, but it is relevant given that the Atlantic Council—which is funded in part by the US State Department, NATO, the governments of Latvia and Lithuania, the Ukrainian World Congress, and the Ukrainian oligarch Victor Pinchuk—has been among the loudest voices calling for a new Cold War with Russia. As I pointed out in the pages of The Nation in November, the Atlantic Council has spent the past several years producing some of the most virulent specimens of the new Cold War propaganda.

   

  It would seem then that a healthy amount of skepticism toward a government report that relied, in part, on the findings of private-sector cyber security companies like Crowdstrike might be in order.

  The Atlantic Council is also funded by the U.S. military and the largest defense contractors, including:

  • United States Army
  • United States Navy
  • United States Air Force
  • United States Marines
  • Lockheed Martin
  • Raytheon
  • Northrop Grumman
  • Boeing

  [1]  Here's an example of the Atlantic Council's bellicose rhetoric from July 2016:

  Poland should announce that it reserves the right to deploy offensive cyber operations (and not necessarily in response just to cyber attacks).  The authorities could also suggest potential targets, which could include the Moscow metro, the St. Petersburg power network, and Russian state-run media outlets such as RT.

  

• Turkey Threatens To Block US From Using Incirlik Airbase

  In the immediate aftermath of the failed Turkish “coup” of July 2016, the immediate concern to the US was not the fate of the Erdogan regime, but whether the US would maintain access to Incirlik Air Base, a strategic output for the US airforce, allowing it fast and easy access to most of the Middle East and part of Russia even in the immediate absence of an aircraft carrier. It explains why when Erdogan said he felt snubbed by the US, he cut off the power to the US troops stationed at the airbase, and kept them in the dark for a considerable period of time, perhaps to remind Washington that in Turkey he is the boss.

  Fast forward to this week, when on Wednesday, Turkish officials again made a veiled threat to ground U.S. warplanes at Incirlik Air Base over the U.S. denial of air support for the Turkish military inside Syria. The officials questioned the value of having the U.S. fly missions out of Incirlik in southeastern Turkey against ISIS targets in Syria and Iraq while Turkish forces are struggling to take the ISIS-held Syrian town of El Bab.

  “This is leading to serious disappointment in Turkish public opinion,” Turkish Defense Minister Fikri Isik said, adding that “this is leading to questions over Incirlik,” Turkey’s Anadolu news agency reported.

  He then once again treatened the US, when he said that to avoid repercussions that could affect Incirlik operations, the Defense Minister called on the U.S. to “start to provide the aerial support and other support that the [Turkish military] needs” to take El Bab, which would also drive a wedge between Syrian Kurdish militias supported by the U.S. in actions against the Islamic State of Iraq and Syria.

  U.S. Air Force Col. John Dorrian said Wednesday than any actions by Turkey to shut down or limit U.S. air operations out of Incirlik would be disastrous for the U.S. anti-ISIS campaign now focused in Syria on the drive by a mixed Syrian Kurdish and Arab force against Raqqa, the self-proclaimed ISIS capital. What he meant to say is that it would disastrous for the U.S., period, as it would deprive the US of one of its most critical military outputs in the MENA region.

  12 F-15s from RAF Lakenheath, UK are deployed to Incirlik AB, Turkey, November, 2015

  “It’s absolutely invaluable,” Dorrian, a spokesman for Combined Joint Task Force-Operation Inherent Resolve, said of Incirlik. “Really, the entire world has been made safer by the operations that have been conducted there.” Well, that or precisely the opposite – it all depends on one’s point of view.

  Turkey briefly closed its airspace to U.S. operations out of Incirlik last July and cut off power to the base during the failed military coup against the government of President Recep Tayyip Erdogan when suspicions ran high among Turkish officials that the U.S. may have supported rebels within the military.  As the coup attempt failed, a high-ranking Turkish officer walked across the Incirlik airfield and tried to turn himself into the U.S. military to seek asylum. His request was rejected, and he was arrested by Turkish authorities.

  On Wednesday, Turkish Foreign Minister Mevlut Cavusoglu said, “The U.S. is a very important ally for us. We have cooperation in every field, but there is the reality of a confidence crisis in the relationship at the moment” over Incirlik and the El Bab offensive, which Turkey has named Operation Euphrates Shield. “Our people ask, ‘Why are they [the U.S. and coalition warplanes] using the ?ncirlik air base’ ” if they won’t back up Turkish forces against ISIS and the Kurdish militias considered terrorists by Turkey? “What purpose are you serving if you do not provide aerial support against [ISIS] in the most sensitive operation for us?”

  U.S. officials have confirmed they are withholding airstrikes from the El  Bab offensive while maintaining overall support for Turkey’s anti-ISIS efforts inside Syria, aimed at sealing off border areas. On Tuesday, Pentagon Press Secretary Peter Cook said that U.S. aircraft flew near El Bab on Monday but did not conduct any strikes. In a briefing from Baghdad to the Pentagon on Wednesday, Dorrian suggested that weather and poor intelligence on the disposition of friendly forces may have been a factors in the decision not to attack.

  “The cardinal rule of air support is to do no harm,” Dorrian said, adding that the aircrews may not have had “good fidelity” on enemy positions. The result was “a show of force that was conducted at the request of Turkish forces operating on the ground,” he said.

  Quoted by Military.com, Dorrian said that “there were ongoing discussions at higher levels “to increase the support and operations” by the U.S. military to back Turkish forces, but “I can’t get ahead of those discussions. I don’t have the details to offer you about what the way forward will be in El Bab. But I do know there has been some good discussion on that, and Turkey is aware of that discussion,” he said.

  The loss of Incirlik air base would be a tremendous hit to US influence in the region.

  The U.S. Army Corps of Engineers began construction in 1951 of what was to become Incirlik Air Base, and U.S. and Turkish air forces signed an agreement in 1954 for joint use of the base. Incirlik long served as a deterrent to the then-Soviet Union and as a staging base for U.S. operations in the Mideast.

  Despite recurring reports that US nuclear weapons are store in the base, the U.S. Air Force will neither confirm nor deny. About 5,000 U.S. service members, mostly Air Force, are based at Incirlik; they are currently confined to the base because of unrest in the region. The U.S. last year withdrew military families from Turkey, and the State Department has also sent home non-essential personnel.

  The tensions over El Bab and Incirlik have only added to the downward spiral of relations between the U.S. and NATO ally Turkey, marked by Erdogan’s new alliance with Russian President Vladimir Putin to bring about a ceasefire and peace talks to end Syria’s nearly six-year-old civil war. As reported last week, the U.S. was not invited to a Moscow meeting last month of the foreign ministers of Russia, Turkey and Iran that led to Putin’s announcement last week of the ceasefire and possible peace talks later this month in Astana, Kazakhstan, with rebel groups.

  Turkey has also been angered by what it sees as U.S. foot-dragging on its extradition request for exiled Muslim cleric Fethullah Gulen, now living in Pennsylvania. Erdogan has blamed Gulen for fomenting the July coup attempt. In addition, Erdogan has bridled at U.S. support for the Syrian Kurdish militia known as the YPG, or People’s Protection Units. The YPG has proven to be the most effective fighting force against ISIS in Syria, but Erdogan considers it an arm of the Kurdish PKK, or Kurdistan Workers Party, which has been branded a terrorist group by the U.S. and Turkey.

  A senior U.S. military official, speaking on background last month, told Military.com that the Turks “hate that we support” the YPG.

  Erdogan and other Turkish officials have charged that the U.S. is supplying weapons to the YPG. The U.S., while acknowledging support for the YPG, has denied giving them recent supplies of weapons.

  

  

• Trump Aims To Cut The Neocon Deep State Off At The Knees

  Submitted by Charles Hugh-Smith via OfTwoMinds blog,

  The Neocon-Neoliberals must be fired and put out to pasture before they do any more harm.

  

  I have long held that America's Deep State–the unelected National Security State often referred to as the Shadow Government–is not a unified monolith but a deeply divided ecosystem in which the dominant Neocon-Neoliberal Oligarchy is being challenged by elements which view the Neocon-Neoliberal agenda as a threat to national security and the interests of the United States.

  I call these anti-Neocon-Neoliberal elements the progressive Deep State.

  If you want a working definition of the Neocon-Neoliberal Deep State, Hillary Clinton's quip–we came, we saw, he died–is a good summary: a bullying, arrogance-soaked state-within-a-state pursuing an agenda of ceaseless intervention while operating a global Murder, Inc., supremely confident that no one in the elected government can touch them.

  Until Trump unexpectedly wrenched the presidency from the Neocon's candidate. The Neocon Deep State's response was to manufacture a mass-media hysteria that Russia had wrongfully deprived the Neocon's candidate (Hillary Clinton) of what was rightfully hers: the presidency. (The Neocons operate their own version of the divine right of Political Nobility.)

  The Neocon-Neoliberals' strategy was to delegitimize Trump's victory by ascribing it to "Russian Hacking," a claim that remains entirely unsubstantiated. Now that this grasping-at-straws Hail Mary coup attempt by a politicized C.I.A. and its corporate media mouthpiece has failed, the Neocon Deep State is about to find out the Progressive Deep State finally has a president who is willing and able to cut the Neocon-Neoliberals off at the knees.

  Trump Is Working On A Plan To Restructure, Pare Back The CIA And America's Top Spy Agency.

  If you want documented evidence of this split in the Deep State–sorry, it doesn't work that way. Nobody in the higher echelons of the Deep State is going to leak anything about the low-intensity war being waged because the one thing everyone agrees on is the Deep State's dirty laundry must be kept private.

  As a result, the split is visible only by carefully reading between the lines, by examining who is being placed in positions of control in the Trump Administration, and reading the tea leaves of who is "retiring" (i.e. being fired) or quitting, which agencies are suddenly being reorganized, and the appearance of dissenting views in journals that serve as public conduits for Deep State narratives.

  I have also long held that Wall Street's political dominance is part and parcel of the Neocon-Neoliberal ideology, and the progressive elements in the Deep State also want to (finally) limit the power of the big banks and the rest of the Wall Street crowd.

  Is the Deep State Fracturing into Disunity? (March 14, 2014)

  The split in the Deep State is a reflection of the profound political disunity that is occurring in the U.S. In other words, it isn't just disunity in the masses or the political elites–it's a division in all levels of our society.

  The cause is not difficult to discern: the concentration of wealth and political power in the hands of the few is generating levels of inequality that threaten democracy, the social order and the vitality of the economy:

  

  As someone who has studied the Deep State for 40 years, I find it ironic that so many self-identified "progressives" do not understand that the U.S. military is now the Progressive element and it's the civilian leadership–the Neocon-Neoliberals– who are responsible for leading the nation into quagmires and handing the keys to the chicken coop to the wolves of Wall Street.

  When military leaders such as Eric Shinseki questioned the Neocon's insane "strategy" in Iraq–essentially a civilian fantasy of magical-thinking–the Neocons quickly cashiered him (Shinseki was a wounded combat veteran of Vietnam who rose through the ranks–the exact opposite of the coddled never-get-my-hands-dirty Elites in the civilian Neocon-Neoliberal leadership.)

  To the degree that the U.S. has become a Third World Oligarchy owned and controlled by a financial-political Elite, then the U.S. military is one of the few national institutions that hasn't been corrupted by top-down politicization and worship of Wall Street.

  Shinseki et al. did not amass a fortune from Wall Street like Bill and Hillary Clinton. The simple dictum–follow the money–maps the lay of the land rather neatly.

  The Neocon-Neoliberals have run the nation into the ground. They must be fired and put out to pasture before they do any more harm. That includes the Fake-"Progressives" and the fake-"Conservatives" alike who have enriched themselves within the Neocon-Neoliberal Oligarchy.

  If you are surprised that the Democratic Party, the C.I.A. and Wall Street are all hugging each other in the same cozy Neocon-Neoliberal Oligarchic embrace, you shouldn't be. Open your eyes.

  Could the Deep State Be Sabotaging Hillary? (August 8, 2016)

  

  

• Payrolls Preview: Blame Weakness On Weather, Strength On Trump

  With all eyes likely on wage growth indications in the subtext of tomorrow's payrolls report (following The Fed Minutes' comments on full employment), Goldman Sachs is forecasting a better-than-expected 0.3% rebound in average hourly earnings (helped by more favorable calendar effects) and a better-than-expected 180k payrolls print (albeit with a small rise in the unemployment rate). However, they are careful to note that any downside can be blamed on "a considerable drop in temperatures."

  As Goldman Sachs details:

  We forecast that nonfarm payroll employment increased 180k in December, after an increase of 178k in November and 142k in October. On balance, labor market indicators were moderately strong in December, with improvement in the employment components of many service-sector and manufacturing surveys and a rise in consumer confidence to a 15-year high. The key labor market subcomponent of consumer confidence also hovered near its post-crisis high, despite a modest pullback from November. We also expect above-trend payroll growth in the transportation and warehousing industry, driven by elevated hiring related to strong online holiday shopping. On the negative side, initial jobless claims drifted higher and continuing claims posted the largest survey-week-to-survey-week increase in nearly a year. December’s relatively cold payroll survey week could also constrain payroll growth in weather-sensitive industries such as construction, particularly after the warmer-than-usual November.

  We do not expect the end of the election to be a major factor this month. If election-related uncertainty reduced or delayed hiring plans earlier in 2016, the end of the election could potentially catalyze a reacceleration in hiring, as we’ve documented in research studying past elections. However, the reacceleration historically tends to occur over several quarters, and perhaps more importantly, we would not characterize the post-election landscape as one of reduced uncertainty. We will study the industry composition of tomorrow’s reports for signs of an impact from the election, such as above-trend growth in energy or financial services, or below-trend growth in healthcare or import-reliant subindustries.

  

  Arguing for a stronger report:

  • Service sector surveys. Most of the employment components of service sector surveys improved or remained at encouraging levels in December. The Philly Fed non-manufacturing employment index rose most dramatically to an 18-month high (+5.4pt to +19.7), and the New York Fed index increased to a 9-month high (+1pt to +12.0, SA by GS). The ISM non-manufacturing employment component was disappointing, falling to 53.8 from 58.2, but remains at a level consistent with moderate growth in service-sector employment. Meanwhile, the Richmond Fed (-1pt to +12.0) and Dallas Fed (-1.4pt to +7.8) measures pulled back modestly to levels also consistent with expansion. Service sector payroll employment increased 139k in November and has increased 177k on average over the last six months.
  • Manufacturing sector surveys. The employment components of manufacturing surveys were somewhat stronger in December. The ISM manufacturing employment component rose to an 18-month high (+0.8pt to 53.1), and the Philly Fed (+9.0pt to +6.4) and Kansas City Fed (+9pt to +10) employment components both improved sharply. On the negative side, the Dallas Fed (-7.4pt to -2.9), Richmond Fed (-6pt to -1), and Empire State (-1.3pt to -12.2) employment components all declined into contractionary territory, and the Chicago PMI employment component remained flat. Manufacturing payroll employment declined by 4k in the November report, and has declined by 3.5k on average over the last six months.
  • Job availability. The Conference Board labor differential—the difference between the percent of respondents saying jobs are plentiful and those saying jobs are hard to get—declined modestly to +4.4 from a cycle high +6.6 November. Despite the pullback, this measure has risen 5pt year-over-year and remains 8pt above its 2015 average, suggestive of a strong report. The Conference Board labor differential is historically correlated with economy-wide hiring rates (JOLTS), which slowed during 2016 and have yet to rebound as of October (see Exhibit 2).
  • Transportation Jobs. Transportation and warehousing payrolls have seen elevated readings in recent Decembers (Exhibit 1), as the seasonal adjustment factors have appeared to lag the secular shift toward online holiday sales. We also note the possibility that the seasonal factors have been anchored to some extent by a particularly weak reading in December 2009 (-52k, compared to an average of -10k in the preceding three months and +12k in the subsequent three months). Given the generally positive anecdotes around online holiday shopping, we expect another year of above-trend growth in this industry, which should provide a boost to headline payrolls of roughly 10k relative to its recent trend.

  Exhibit 1: Online Holiday Shipments May Boost December Transportation Payrolls (Again)

  

  Source: Department of Labor, Goldman Sachs Global Investment Research

  • Hurricane Matthew. We also see a small amount of upside risk from continued bounce-back from Hurricane Matthew, which hit the East Coast in October. Employment across East Coast states in the three sectors that we find are most sensitive to weather– retail, construction, and leisure and hospitality – declined by a total of 17k in October, compared to an average monthly increase of 15k over the prior six months. The November rebound in these state-level industries was fairly lackluster, with +10k total gains across that state-industry grouping. Accordingly, we see a possibility of above-trend December growth (or an upward revision to November) to restore employment levels toward their pre-hurricane trend.

  Arguing for a weaker report:

  • Jobless claims. Initial claims for unemployment insurance benefits moved higher, averaging 261k during the 5 weeks between the November and December payroll survey periods, compared to 253k for the November report. Continuing claims also showed its largest survey-week-to-survey-week increase (+53k) in nearly a year (January 2016). Jobless claims can be difficult to seasonally adjust around this time of the year, and we partially discount the data accordingly. Some of the rise in initial claims may also reflect a return toward mid-year levels after especially low results in late-Q3/early-Q4.
  • ADP. The payroll processing firm ADP reported a 153k gain in private payroll employment in December, down from +215k in November and somewhat below expectations of +175k. In the past we have found minimal incremental predictive power for nonfarm payrolls in the ADP report, with the notable exception of large surprises/deviations. The new methodology ADP introduced in October creates some additional uncertainty around the translation of the somewhat softer ADP data into the outlook for tomorrow’s nonfarm payroll report. Notably, ADP’s measure of healthcare employment has slowed in recent months – even more so than official BLS estimates – and in December rose just 26k, matching the two-year low growth rate achieved last month.
  • Temperatures. The December payroll period featured few notable storms, but saw a considerable drop in temperatures following much warmer-than-usual weather in early and mid-November. Accordingly, December’s relatively cold payroll survey week could constrain job growth in weather-sensitive industries. For example, we anticipate some payback in the construction industry, which has averaged +20k payroll growth in the last three months, compared to trend monthly growth in the 10-15k range.

  Neutral Factors:

  • End of the election. We do not expect the end of the election to be a major factor this month. If election-related uncertainty reduced or delayed hiring plans earlier in 2016, the end of the election could potentially catalyze a reacceleration in hiring, as we’ve documented in research studying past elections. However, the reacceleration historically tends to occur over several quarters, and perhaps more importantly, we would not characterize the post-election landscape as one of reduced uncertainty. Payroll growth did slow during the course of 2016, consistent with the possibility that election-related uncertainty reduced or delayed hiring plans, though dwindling labor market slack represents a second viable explanation. More granular data from JOLTS show a decline in the pace of hiring since the beginning of the year, with a further meaningful drop in hiring in September and October ahead of the election (Exhibit 2). We would note that considerable policy uncertainty remains. For example, the anticipation of policy changes related to health insurance and destination-based taxation could slow hiring in the healthcare sector and in import-reliant industries such as retail, wholesale, and parts of manufacturing. Much like the policy outlook itself, the evolution of business-sector expectations and their implications for aggregate-level job growth remain open questions. In terms of short-term hiring in election-related job categories, note that the BLS makes a special adjustment to estimate and remove these effects in election years, and November payrolls showed no pronounced spike in marketing research categories or government.

  Exhibit 2: Were 2016’s Slower Hiring Rates Election-Related?

  

  Source: Department of Labor, Goldman Sachs Global Investment Research

  • Online job ads. The Conference Board’s Help Wanted Online (HWOL) report reversed most of last month’s decline, and stands 9% lower than levels last year (vs. -15% yoy in November). However, we put limited weight on this indicator at the moment in light of research by Fed economists that argued that the HWOL ad count has been depressed by higher prices for online job ads.
  • Job cuts. Announced layoffs reported by Challenger, Gray & Christmas after our seasonal adjustment increased by 7k to 34k in December, but the level of announced layoffs remains range-bound and not far from cycle-lows.
  • Seasonals. Since 2010, December payroll growth has surprised positively relative to consensus two thirds of the time (4/6), however the average surprise is slightly negative at -3k.

  We believe the unemployment rate most likely rebounded one-tenth to 4.7% after a 0.3pp drop last month. The unemployment rate fell 0.3pp to an unrounded 4.64% last month, but the decline was mainly driven by the participation rate, as opposed to an acceleration in household employment (which nonetheless rose a respectable 160k in the month). Sharp changes in the participation rate often reverse, and the fact that the second decimal nearly rounded up, we believe a modest rebound to 4.7% is more likely than another 4.6% reading.

  Average hourly earnings likely rose 0.3% after a 0.1% decline in November, as the December survey period ended on the 17th, a relatively late calendar that is historically associated with average or favorable earnings growth. The year-over-year rate is likely to accelerate from 2.5% to 2.8%, which would match the cycle high. Our wage tracker, which captures the broader trend in wage growth across four major indicators, stands at 2.8% year-over-year as of Q3.

  Tomorrow’s employment report will be accompanied by the annual revision to the household survey, with potential revisions to the last 5 years of seasonally adjusted household data. Annual revisions to the establishment survey – as well as the incorporation of updated population estimates from the Census into the household survey – are scheduled for February 3rd. The revisions to the household survey accompanying the December report are usually minor, and last year’s revisions did not result in a change to any of the monthly unemployment rates for 2015.

  *  *  *

  And Ransquawk details the potential market reaction:

  As ever with the NFP release, the headline is likely to garner much of the initial focus with algorithms and fast money moves jumping on any large discrepancies, participants must be aware that moves could be exacerbated and choppy trade likely due to the beginning of January's historic thin trading conditions.

   

  If there is an overwhelmingly strong report, the USD will strengthen across the board however, as the dollar index continues to ramp many analysts consider the dollar upside to be limited and the possible move to lookout for is a poor report, negatively affecting the USD.

   

  As focus detatches from the Fed and interest rates, equity markets are likely to be a much cleaner trade than recent months. Furthermore, with whispers of a reversal in equity markets and many participants still long the market an overwhelming poor report may prove to be a slight catalyst in a bearish push. In terms of technical levels in the S&P 500, November's high at 2214.10 can prove to be some support on the downside and there is an internal downtrend line which originates on 23/08/16 to the next lower high on the 07/09/16 and support likely at 2158.20.

   

  Gold and treasury markets are likely to act in tandem with classic price action in regards to the NFP likely to be evident in flight to safety asset classes, with a strong report likely to cause some risk on sentiment resulting in weakness in both gold and treasury markets and vice versa for a weak report. Participants are likely to keep an eye on fixed income markets, with tight trading ranges evident across the curve throughout December and any discrepancy in either direction could result in some traction.

  And if that fails Buy The Fucking Payrolls Dip no matter what…

  

  

  

• Ruled by DC: Get The Feds Out Of Western Lands

  Submitted by Ryan McMaken via The Mises Institute,

  In the final days of his administration, President Obama has decided that with the stroke of pen, he shall further consolidate direct federal control over lands within Western states. Specifically, Obama created the Bear Ears National Monument and the Gold Butte National Monument in Utah and Nevada, respectively. The Obama Administration claims that Obama's unilateral edict was necessary because Congress had not passed any legislation on the matter.

  Indeed, the Obama-appointed Interior Secretary stated that "protecting the area using legislation would have been preferable" but that in the absence of legislation, it was necessary to simply declare the lands to be National Monuments. 

  In other words, the democratic, constitutional process of Congressional lawmaking was inconvenient for the President. So, he decided to rule by proclamation instead, giving the Governor of Utah barely an hour's notice before the proclamation was made public. 

  It's Not About Conservation — It's About Federal Control

  Now, we should first note that the overwhelming majority of lands newly designated as National Monument lands were already federal lands to begin with, and have been controlled largely by the US Bureau of Land Management and the Forest Service.

  Moreover, it is not the case that opponents to the new designation are mostly people who want to privatize the land or make it easier to mine or develop the land. In fact, many opponents of the designation oppose it because they fear Monument status will lead to greater development of the area as a tourist mecca.

  In other cases, members of Indian tribes object to making sacred lands part of a federally-controlled National Monument area.

  And, of course, throughout Western states, public lands continue to be a lucrative source of tourist dollars and eco-tourism. The old caricature of pro-conservationist leftists and strip-mining conservatives has long been just that: a caricature.

  The reality is that nowadays many private firms and local governments depend on public lands for their livelihood and revenue, and these groups have quite a bit of influence at the state legislatures in question. Preserving natural spaces from development can mean big business and Western-state politicians know it:

  It is not at all clear that markets or local governments would prefer that land be used for agricultural purposes as opposed to other purposes. For example, were Rocky Mountain National Park to become a locally-controlled park or state park, there is, realistically speaking, zero chance that it would be handed over to ranchers or miners. The park is far too valuable to the local economy as part of the recreation and tourism industries. To turn the park into range land would devastate the economies of the local communities, many of which contain wealthy and influential voters.

   

  But, say that the park were broken up into parcels and sold to a number of private owners. (We're in the realm of pure fantasy at this point.) It would make little sense to use the land for mining or ranching even in this case. Given the infrastructure in place and the relative closeness to a major metropolitan area, the lands in and around the Park are likely far more lucrative for recreational purposes than for mining or ranching. 

  There is little doubt, however, that much of the controversy over the site will be framed like this: on one side are the conscientious environmentalists and others who want to preserve these pristine lands from destruction. On the other side are oil executives who want to strip-mine the land.

  The real debate here, however, isn't over strip mining vs. conservation. It's about whether or not a president thousands of miles away can — with the stroke of a pen — dictate how millions of acres in a faraway state can be used, and do so over the protestations of the state legislature.

  Nor can it be demonstrated that federal agencies are better custodians of lands than are states. Indeed, the federal government has routinely been more inclined to allow overgrazing on federal lands while subsidizing ranchers at taxpayer expense. It is the states that have demonstrated more prudent stewardship of resources.

  Moreover, The Denver post in a 2014 editorial noted other cases in which the federal government hapless mismanaged fish and wildlife issues:

  One has only to look at the great elk management debacle in Rocky Mountain National Park. When populations grew out of control in the park, federal decision-makers chose to pay significant sums to bring in contract killers to thin the herd. A proposal by Colorado wildlife managers to use well-trained hunters and donate the meat to struggling families was cast aside.

  We could further examine the sad case of game fish being electrocuted and buried on the Yampa River in northwest Colorado at the insistence of the U.S. Fish and Wildlife Service to preserve the pikeminnow, while the same pikeminnows are slaughtered and dumped in Washington state to preserve the wild salmon. All of this, in a never-ending nightmare of bureaucratic red tape with no firmly stated goals or objective in sight, by design.

  Moreover, federal lands can be manipulated for political purposes putting local communities at risk.

  Perhaps the most memorable recent example of this occurred in 2013 when the federal government shut down national parks and other federal lands as part of the usual "government shutdown" ploy. The federal government dispatched federal agents armed with assault rifles who forcibly ejected visitors from the allegedly “public lands.” Meanwhile, nearby towns that rely on tourists for the local economy were powerless to open the parks themselves. State officials, who are far more sensitive to local economic needs than members of Congress or the White House, were also powerless to do anything.

  Eventually, after much political pressure was applied, the federal government kindly allowed states to pay millions to the federal government to open the parks again.

  These are just some of the reasons why Utahns of various interests have opposed greater federal power over lands in their states. 

  Federal Lands Are the Problem

  This Obama Administration's move with Bear Ears is the latest "screw-you" to Utah in an ongoing effort by the State of Utah to exercise more control over federal lands. For years now, the Utah legislature and the state's delegation in Congress have been exploring ways to limit federal control over lands within the borders of Utah.

  What is steadfastly ignored in the debate however, is the questionable legitimacy of federal control over so many immense swaths of land. 

  Today, the feds control 640 million acres (not counting the far larger federally-owned areas of coastal sea floor). And in most Western states, the Federal government owns more than a third of all the land. In the case of Utah and Nevada, where the two new monuments are created, the federal government owns 65 percent and 85 percent of all land, respectively.

  

  This means that these lands are ultimately controlled by politicians thousands of miles away who are not citizens of those states. In the case of Utah, for example, federal lands are controlled by executive-branch bureaucrats — few of whom are from Utah — or they are controlled by Congressional laws passed by a Congress composed of 529 non-Utahns and 6 Utahns.

  The fact that lands in Utah should be largely controlled by Californians, Texans, and New Yorkers — many of whom have never even set foot in Utah — should strike reasonable people as both objectionable and bizarre.

  At the same time, if those lands are truly sacred sites, as some groups contend, then those sites should be Tribal lands and neither federal or state lands. (See "Why Indian-Tribe Sovereignty Is Important.")

  Repeal the Antiquities Act?

  Other observers of the Obama Administration's many executive orders on federal lands have called for the abolition of the Antiquities Act of 1906 which empowers the president to designate federal lands as National Monuments. The Act allows presidents to act unilaterally without any consent from Congress as to how these lands might be designated. Moreover, as critics of the Act note, the Act was supposed to protect small areas of archeological or geographical interest. But, the Act has been abused in order to make many thousands of acres into areas similar to National Parks. 

  Repealing the acts would be a step in the right direction, but it fails to tackle the larger problem of federal lands. After all, if federal lands were not so expansive to begin with, the Antiquities Act would be far more limited in its scope. And, even if Congress were the body designating Monument status, that would only be a tiny improvement. It's true that giving a single person in the Oval office the ability to control lands in faraway states is a problem. However, giving that same control to 535 people in a building down the street form the Oval Office isn't exactly a significant improvement.

   

  

  

• China Prepares For Trade War With Trump

  Having warned U.S. President-elect Donald Trump yesterday, through Chinese state media, that he’ll be met with "big sticks" if he tries to ignite a trade war or further strain ties, China’s central government has reportedly "compiled possible countermeasures" against "well-known U.S. companies or ones that have large Chinese operations."

  

  As Bloomberg reports, China is prepared to step up its scrutiny of U.S. companies in the event President-elect Donald Trump takes punitive measures against Chinese goods and triggers a trade war between the world’s two biggest economies after he takes office, according to people familiar with the matter.

  The options include subjecting well-known U.S. companies or ones that have large Chinese operations to tax or antitrust probes, the people said, asking not to be identified because the matter isn’t public. Other possible measures include the launch of anti-dumping investigations and scaling back government purchases of American products, according to the people.

   

  The move illustrates how the fallout from escalating tensions between the two nations could spread to companies. Trump has made China a frequent target of his attacks and nominated trade-related officials that the Communist Party’s Global Times newspaper said would form an "iron curtain" of protectionism.

   

  While specific details of China’s options weren’t immediately clear, the retaliatory measures could affect companies related to agriculture, pharmaceuticals, technology and consumer industries, according to the people.

   

  China’s central government compiled the possible countermeasures after collecting opinions from various departments, the people said. The punitive steps would only be carried out if the U.S. acts first and after senior Chinese leaders sign off on them, they said.

   

  Representatives at China’s Ministry of Commerce, National Development and Reform Commission, State Administration of Taxation and General Administration of Customs either didn’t respond or couldn’t immediately comment to Bloomberg queries.

   

  Representatives at Trump’s transition team didn’t respond to a request for comment.

  Today's comments were much more directly aimed than yesterday's more prosaic langauge…

  "There are flowers around the gate of China’s Ministry of Commerce, but there are also big sticks hidden inside the door — they both await Americans," the Communist Party’s Global Times newspaper wrote in an editorial Thursday in response to Trump’s plans to nominate lawyer Robert Lighthizer, who has criticized Beijing’s trade practices, as U.S. trade representative.

  For now China appears to have fallen off Trump's radar (as maybe he is letting them blow themselves up with massive spikes in Yuan and overnight depoist rates as liquidity freezes), and instead over the past few days the president-elect has been focusing on the ongoing Russian hacking fiasco, crashing the Mexican peso, and slamming "head clown" Chuck Schumer for the mess that is Obamacare.

  

  

• Rand Paul Goes Off On Republican Party Over New Budget Resolution

  Submitted by Joseph Jankowski via PlanetFreeWill.com,

  

  On Wednesday afternoon, one day after reintroducing his Federal Reserve Transparency Act, Senator Rand Paul (R-KY) took to the Senate floor to slam his fellow Republicans for the $9.7 trillion of debt that a newly introduced budget resolution will tack on to the country's already out of control debt total.

  Senate Budget Committee Chair Michael Enzi (R-WY) introduced a budget resolution on Tuesday that is being touted as the first step the newly sworn in congress is taking to repealing Obamacare. The legislation includes “reconciliation instructions” that would allow congress to dismantle the health care law as part of reconciling taxes and spending with the budget blueprint.

  According to Paul, “there is a time and a place to debate Obamacare” but this new piece of legislation is a budget and he is unwilling to support the debt it will accumulate.

  What will the first order of business be for the new Republican majority? To pass a budget that never balances. pic.twitter.com/DEBquJvK7P

  — Senator Rand Paul (@RandPaul) January 4, 2017

  “Republicans won the White House. Republicans control the Senate. Republicans control the House. And what will the first order of business be for the new Republican majority?” Paul asked.

   

  “To pass a budget that never balances,” the Kentucky Senator answered his own question. “To pass a budget that will add $9.7 trillion dollars of new debt in tens years.”

  “Is that really what we campaigned on?” Paul asked on. “Is that really what the Republican party represents?”

  After stating that he is with his fellow Republicans for the repeal of Obamacare, Senator Paul went on to ask “why should we vote on a budget that doesn’t represent our conservative view?”

  I will put forward a budget that freezes spending and balances the budget over a 5 year period. pic.twitter.com/nWRxeefFFz

  — Senator Rand Paul (@RandPaul) January 4, 2017

  “I’m not for it,” Paul said of the potential new debt. “That’s not why I ran for office. That’s not why I’m here. That’s not why I spend time away from my family and from my medical practice. It’s because debt is consuming our country.”

   

  “There is a time and place to debate Obamacare, and I’m more than willing to debate that but this is a budget,” Paul exclaimed.

  The Senator from Kentucky said he will put forth an opposition to the Republican majority’s resolution with his own budget that will freeze spending and create balance over a 5 year period.

  I will put forward a conservative vision for the country, a vision of a balanced budget that balances within 5 years pic.twitter.com/OWTISquSyN

  — Senator Rand Paul (@RandPaul) January 4, 2017

  “I will continue to bring up to the American people that it is important not to add more debt,” Paul said.

   

  “At the appropriate time, I will introduce an amendment that will strike and replace this budget and in it’s place I will put forward a conservative vision for the country,” the Senator said. “A vision of a balanced budget that balances within 5 years.”

  I will put forward a conservative vision for the country, a vision of a balanced budget that balances within 5 years pic.twitter.com/OWTISquSyN

  — Senator Rand Paul (@RandPaul) January 4, 2017

  Senator Paul has not only made headlines for his opposition to Obamacare as of late, he has also been stirring things up with his recent reintroduction of his Federal Reserve Transparency Act, widely known as the ‘Audit the Fed’ bill.

   

  “No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve,” Paul said on Wednesday, “yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives.” 

  “The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress.”

  

  

• California Farmers Fret Over Labor Shortages As Trump Vows To Deport Their Work Force

  Unbeknownst to most Americans, the Central Valley of California is an agricultural powerhouse producing nearly 50% of all fruits and vegetables grown in the United States, including over 90% of popular items like almonds, carrots and table grapes.  But producing all those fruits and vegetables is extremely labor intensive requiring up to nearly 500,000 laborers each year.  The problem is that those jobs are extremely seasonal (see chart below) and extremely difficult requiring hours of back-breaking work in the 100-degree California sun.

  

   

  Needless to say, America’s snowflakes have no interest in such “back-breaking” work and so California farmers have grown reliant on migrant labor from Mexico to grow and harvest their crops.  Which is why Trump’s deportation vows have California’s farmers a bit concerned.

  As one farm labor contractor told the Associated Press, farmers are growing increasingly concerned that there won’t be enough labor for the 2017 season.

  “Our workers are scared,” said Joe Garcia, a farm labor contractor who hires up to 4,000 people each year to pick grapes from Napa to Bakersfield and along the Central Coast. “If they’re concerned, we’re concerned.”

   

  Since Election Day, Garcia’s crews throughout the state have been asking what will happen to them when Trump takes office. Farmers also are calling to see if they’ll need to pay more to attract people to prune the vines, he said.

   

  Garcia tells farmers not to panic. They’ll learn how many return from Mexico after the holidays. “We’ll plan around what we have,” he tells them. “That’s all we can do.”

  But some farmers are planning for the worst and investing additional capital now to make their operations more labor efficient.  Fresno farmer Kevin Herman said he’s heard too many stories of workers that don’t plan to return from their holiday trips to Mexico for the 2017 ag season.

  Days after Donald Trump won the White House vowing to deport millions of people in the country illegally and fortify the Mexican border, California farmer Kevin Herman ordered nearly $600,000 in new equipment, cutting the number of workers he’ll need starting with the next harvest.

   

  Herman, who grows figs, persimmons and almonds in the nation’s most productive farming state, said Trump’s comments pushed him to make the purchase, larger than he would have otherwise.

   

  Plus, Herman said, he’s heard too many workers question whether they’ll return from their holiday trips to Mexico. “It’s stories like that that have motivated me to become efficient and upgrade my equipment,” Herman said.

   

  “No doubt about it,” Herman said. “I probably wouldn’t have spent as much or bought as much machinery as I did.”

  Of course, there is a clearing labor price for America’s snowflakes to take these jobs provided Americans are willing to pay double for their tomatoes and carrots.  That said, we suspect moving production to Mexico and importing food to U.S. supermarkets, even with Trump’s 35% tariff, is the more economical solution.

  

  

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• Chinese Cruise Ship With 2,000 Passengers Stuck At Sea For Two Days Due To Smog

  Beijing’s pollution problem is getting worse by the day.

  On Wednesday, the Chinese capital issued its highest “red fog alert” for only the second day in history, keeping highways closed in and around the city which is already under a smog alert after weeks of choking winter pollution. China’s weather bureau warned of visibility of less than 50 meters in some areas, leading many airports to cancel flights.

  The heavily polluted Hebei province, which surrounds most of Beijing, said on Tuesday it had ordered all polluting firms in Tangshan, China’s biggest steel-producing city to the east of Beijing, to shut down which likely means that China is in for a substantial “manufacturing” shock in the coming months. 

  Hebei, which was home to seven of China’s 10 smoggiest cities in 2015, will build the world’s biggest dust prevention barrier, stretching nearly two miles, at the major coal port of Qinhuangdao in a bid to cut pollution, state media said on Wednesday.

  For now, however, China is very much defenseless against the toxic byproduct of its rapid industrialization, which also happens to be a major factor permitting the Chinese economy to grow at the goalseeked 6-7% level or somewhere thereabouts. Unfortunately for Beijing, it’s a choice of either stable manufacturing growth or clean air: the two are mutually exclusive.

  And nowhere was that more visible today, so to speak, than near the port of Tianjin, where according to the Beijing Evening News, a large cruise ship with more than 2,000 people on board was stuck at sea for two days because it was unable to dock in the heavy smog that has enveloped much of northern China. The vessel finally returned to the Port of Tianjin on Monday afternoon after drifting for two days at sea. The thick air pollution had earlier made it impossible to safely berth the vessel, according to the article

  A passenger was quoted as saying that the ship was scheduled to return on New Year’s Eve after traveling to South Korea and Japan. But she was told by the crew that the ship could not dock as visibility was severely compromised by the smog. She said the passengers had been unsure how long they would be stuck at sea but were grateful there was plenty of entertainment on board to kill time.

  “Unlike passengers who are stuck at some public facilities like an airport, we got to use the pool and the gym to keep ourselves busy,” she said.

  As Reuters adds, poor visibility prompted three major northern ports to suspend the loading of ships on Tuesday, maritime safety agencies said.

  Unless Beijing’s leadership is willing to take draconian measures to curb smog production, which inevitably means an economic slowdown, expect scenes such as the ones shown below to continue.

  It’s started snowing in Beijing. What do you call smoggy snow? Smow? Snog? pic.twitter.com/BKWGYufidu

  — Chris Buckley ??? (@ChuBailiang) January 5, 2017

  Beijing out my window – the air has taste and texture today. pic.twitter.com/QoZWH20f4E

  — Chris Hadfield (@Cmdr_Hadfield) January 5, 2017

  Beijing from the air as smog blankets the city. Just otherworldly – and alarming pic.twitter.com/P8oTLRFomR

  — Jim Sciutto (@jimsciutto) January 4, 2017

  

  

• Washington Post Is Richly Rewarded For False News About Russia Threat While Public Is Deceived

  Authored by Glenn Greenwald, originally posted at The Intercept,

  In the past six weeks, the Washington Post published two blockbuster stories about the Russian threat that went viral: one on how Russia is behind a massive explosion of “fake news,” the other on how it invaded the U.S. electric grid. Both articles were fundamentally false. Each now bears a humiliating editor’s note grudgingly acknowledging that the core claims of the story were fiction: The first note was posted a full two weeks later to the top of the original article; the other was buried the following day at the bottom.

  The second story on the electric grid turned out to be far worse than I realized when I wrote about it on Saturday, when it became clear that there was no “penetration of the U.S. electricity grid” as the Post had claimed. In addition to the editor’s note, the Russia-hacked-our-electric-grid story now has a full-scale retraction in the form of a separate article admitting that “the incident is not linked to any Russian government effort to target or hack the utility” and there may not even have been malware at all on this laptop.

  But while these debacles are embarrassing for the paper, they are also richly rewarding. That’s because journalists — including those at the Post — aggressively hype and promote the original, sensationalistic false stories, ensuring that they go viral, generating massive traffic for the Post (the paper’s executive editor, Marty Baron, recently boasted about how profitable the paper has become).

  After spreading the falsehoods far and wide, raising fear levels and manipulating U.S. political discourse in the process (both Russia stories were widely hyped on cable news), journalists who spread the false claims subsequently note the retraction or corrections only in the most muted way possible, and often not at all. As a result, only a tiny fraction of people who were exposed to the original false story end up learning of the retractions.

  Baron himself, editorial leader of the Post, is a perfect case study in this irresponsible tactic. It was Baron who went to Twitter on the evening of November 24 to announce the Post’s exposé of the enormous reach of Russia’s fake news operation, based on what he heralded as the findings of “independent researchers.” Baron’s tweet went all over the place; to date, it has been re-tweeted more than 3,000 times, including by many journalists with their own large followings:

  Russian propaganda effort helped spread fake news during election, say independent researchers https://t.co/3ETVXWw16Q

  — Marty Baron (@PostBaron) November 25, 2016

  But after that story faced a barrage of intense criticism — from Adrian Chen in the New Yorker (“propaganda about Russia propaganda”), Matt Taibbi in Rolling Stone (“shameful, disgusting”), my own article, and many others — including legal threats from the sites smeared as Russian propaganda outlets by the Post’s “independent researchers” — the Post finally added its lengthy editor’s note distancing itself from the anonymous group that provided the key claims of its story (“The Post … does not itself vouch for the validity of PropOrNot’s findings” and “since publication of the Post’s story, PropOrNot has removed some sites from its list”).

  What did Baron tell his followers about this editor’s note that gutted the key claims of the story he hyped? Nothing. Not a word. To date, he has been publicly silent about these revisions. Having spread the original claims to tens of thousands of people, if not more, he took no steps to ensure that any of them heard about the major walk back on the article’s most significant, inflammatory claims. He did, however, ironically find the time to promote a different Post story about how terrible and damaging Fake News is:

  ‘Pizzagate’ shows how fake news hurts real people https://t.co/cOh7RZ4RqK

  — Marty Baron (@PostBaron) November 26, 2016

   Whether the Post’s false stories here can be distinguished from what is commonly called “Fake News” is, at this point, a semantic dispute, particularly since “Fake News” has no cogent definition.  Defenders of Fake News as a distinct category typically emphasize intent in order to differentiate it from bad journalism. That’s really just a way of defining Fake News so as to make it definitionally impossible for mainstream media outlets like the Post ever to be guilty of it (much the way terrorism is defined to ensure that the U.S. government and its allies cannot, by definition, ever commit it).

  But what was the Post’s motive in publishing two false stories about Russia that, very predictably, generated massive attention, traffic, and political impact? Was it ideological and political — namely, devotion to the D.C. agenda of elevating Russia into a grave threat to U.S. security? Was it to please its audience — knowing that its readers, in the wake of Trump’s victory, want to be fed stories about Russian treachery? Was it access and source servitude — proving it will serve as a loyal and uncritical repository for any propaganda intelligence officials want disseminated? Was it profit — to generate revenue through sensationalistic click-bait headlines with a reckless disregard to whether its stories are true? In an institution as large as the Post, with numerous reporters and editors participating in these stories, it’s impossible to identify any one motive as definitive.

  Whatever the motives, the effects of these false stories are exactly the same as those of whatever one regards as Fake News. The false claims travel all over the internet, deceiving huge numbers into believing them. The propagators of the falsehoods receive ample profit from their false, viral “news.” And there is no accountability of the kind that would disincentivize a repeat of the behavior. (That the Post ultimately corrects its false story does not distinguish it from classic Fake News sites, which also sometimes do the same.)

  And while it’s true that all media outlets make mistakes, and that even the most careful journalism sometimes errs, those facts do not remotely mitigate the Post’s behavior here. In these cases, they did not make good faith mistakes after engaging in careful journalism. With both stories, they were reckless (at best) from the start, and the glaring deficiencies in the reporting were immediately self-evident (which is why both stories were widely attacked upon publication).

  As this excellent timeline by Kalev Leetaru documents, the Post did not even bother to contact the utility companies in question — the most elementary step of journalistic responsibility — until after the story was published. Intelligence officials insisting on anonymity — so as to ensure no accountability — whispered to them that this happened, and despite how significant the consequences would be, they rushed to print it with no verification at all. This is not a case of good journalism producing inaccurate reporting; it is the case of a media outlet publishing a story that it knew would produce massive benefits and consequences without the slightest due diligence or care.

  The most ironic aspect of all this is that it is mainstream journalists — the very people who have become obsessed with the crusade against Fake News — who play the key role in enabling and fueling this dissemination of false stories. They do so not only by uncritically spreading them, but also by taking little or no steps to notify the public of their falsity.

  The Post’s epic debacle this weekend regarding its electric grid fiction vividly illustrates this dynamic. As I noted on Saturday, many journalists reacted to this story the same way they do every story about Russia: They instantly click and re-tweet and share the story without the slightest critical scrutiny. That these claims are constantly based on the whispers of anonymous officials and accompanied by no evidence whatsoever gives those journalists no pause at all; any official claim that Russia and Putin are behind some global evil is instantly treated as Truth. That’s a significant reason papers like the Post are incentivized to recklessly publish stories of this kind. They know they will be praised and rewarded no matter the accuracy or reliability because their Cause — the agenda — is the right one.

  On Friday night, immediately after the Post’s story was published, one of the most dramatic pronouncements came from the New York Times’s editorial writer Brent Staples, who said this:

  

  Now that this story has collapsed and been fully retracted, what has Staples done to note that this tweet was false? Just like Baron, absolutely nothing. Actually, that’s not quite accurate, as he did do something: At some point after Friday night, he quietly deleted his tweet without comment. He has not uttered a word about the fact that the story he promoted has collapsed, and that what he told his 16,000-plus followers — along with the countless number of people who re-tweeted the dramatic claim of this prominent journalist — turned out to be totally false in every respect.

  

  Even more instructive is the case of MSNBC’s Kyle Griffin, a prolific and skilled social media user who has seen his following explode this year with a constant stream of anti-Trump content. On Friday night, when the Post story was published, Griffin hyped it with a series of tweets designed to make the story seem as menacing and consequential as possible. That included hysterical statements from Vermont officials — who believed the Post’s false claim — that in retrospect are unbelievably embarrassing.

  VT Gov. Peter Shumlin on Russian hacking attempt: 'One of the world's leading thugs, Putin, has been attempting to hack our electric grid.' pic.twitter.com/liJbVLdT5A

  — Kyle Griffin (@kylegriffin1) December 31, 2016

  That tweet from Griffin — convincing people that Putin was endangering the health and safety of Vermonters — was re-tweeted more than 1,000 times. His other similar tweets — such as this one featuring Vermont Sen. Patrick Leahy’s warning that Putin was trying to “shut down [the grid] in the middle of winter” — were also widely spread.

  But the next day, the crux of the story collapsed — the Post’s editor’s note acknowledged that “there is no indication” that “Russian hackers had penetrated the electricity grid” — and Griffin said nothing. Indeed, he said nothing further on any of this until yesterday — four days after his series of widely shared tweets — in which he simply re-tweeted a Post reporter noting an “update” that the story was false without providing any comment himself:

  

  In contrast to Griffin’s original inflammatory tweets about the Russian menace, which were widely and enthusiastically spread, this after-the-fact correction has a paltry 289 re-tweets. Thus, a small fraction of those who were exposed to Griffin’s sensationalistic hyping of this story ended up learning that all of it was false.

  I genuinely do not mean to single out these individual journalists for scorn. They are just illustrative of a very common dynamic: Any story that bolsters the prevailing D.C. orthodoxy on the Russia Threat, no matter how dubious, is spread far and wide. And then, as has happened so often, when the story turns out to be false or misleading, little or nothing is done to correct the deceitful effects. And, most amazingly of all, these are the same people constantly decrying the threat posed by Fake News.

  A very common dynamic is driving all of this: media groupthink, greatly exacerbated (as I described on Saturday) by the incentive scheme of Twitter. As the grand media failure of 2002 demonstrated, American journalists are highly susceptible to fueling and leading the parade in demonizing a new Foreign Enemy rather than exerting restraint and skepticism in evaluating the true nature of that threat.

  It is no coincidence that many of the most embarrassing journalistic debacles of this year involve the Russia Threat, and they all involve this same dynamic. Perhaps the worst one was the facially ridiculous, pre-election Slate story — which multiple outlets (including The Intercept) had been offered but passed on — alleging that Trump had created a secret server to communicate with a Russian bank; that story was so widely shared that even the Clinton campaign ended up hyping it — a tweet that, by itself, was re-tweeted almost 12,000 times.

  Computer scientists have apparently uncovered a covert server linking the Trump Organization to a Russian-based bank. pic.twitter.com/8f8n9xMzUU

  — Hillary Clinton (@HillaryClinton) November 1, 2016

  But only a small percentage of those who heard of it ended up hearing of the major walk back and debunking from other outlets. The same is true of The Guardian story from last week on WikiLeaks and Putin that ended up going viral, only to have its retraction barely noticed because most of the journalists who spread the story did not bother to note it.

  Beyond the journalistic tendency to echo anonymous officials on whatever Scary Foreign Threat they are hyping at the moment, there is an independent incentive scheme sustaining all of this. That Russia is a Grave Menace attacking the U.S. has — for obvious reasons — become a critical narrative for Democrats and other Trump opponents who dominate elite media circles on social media and elsewhere. They reward and herald anyone who bolsters that narrative, while viciously attacking anyone who questions it.

  Indeed, in my 10-plus years of writing about politics on an endless number of polarizing issues — including the Snowden reporting — nothing remotely compares to the smear campaign that has been launched as a result of the work I’ve done questioning and challenging claims about Russian hacking and the threat posed by that country generally. This is being engineered not by random, fringe accounts, but by the most prominent Democratic pundits with the largest media followings.

  I’ve been transformed, overnight, into an early adherent of alt-right ideology, an avid fan of Breitbart, an enthusiastic Trump supporter, and — needless to say  — a Kremlin operative. That’s literally the explicit script they’re now using, often with outright fabrications of what I say (see here for one particularly glaring example).

  They, of course, know all of this is false. A primary focus of the last 10 years of my journalism has been a defense of the civil liberties of Muslims. I wrote an entire book on the racism and inequality inherent in the U.S. justice system. My legal career involved numerous representations of victims of racial discrimination. I was one of the first journalists to condemn the misleadingly “neutral” approach to reporting on Trump and to call for more explicit condemnations of his extremism and lies. I was one of the few to defend Jorge Ramos from widespread media attacks when he challenged Trump’s immigration extremism. Along with many others, I tried to warn Democrats that nominating a candidate as unpopular as Hillary Clinton risked a Trump victory. And as someone who is very publicly in a same-sex, inter-racial marriage — with someone just elected to public office as a socialist — I make for a very unlikely alt-right leader, to put that mildly.

  The malice of this campaign is exceeded only by its blatant stupidity. Even having to dignify it with a defense is depressing, though once it becomes this widespread, one has little choice.

  But this is the climate Democrats have successfully cultivated — where anyone dissenting or even expressing skepticism about their deeply self-serving Russia narrative is the target of coordinated and potent smears; where, as The Nation’s James Carden documented yesterday, skepticism is literally equated with treason. And the converse is equally true: Those who disseminate claims and stories that bolster this narrative — no matter how divorced from reason and evidence they are — receive an array of benefits and rewards.

  That the story ends up being completely discredited matters little. The damage is done, and the benefits received. Fake News in the narrow sense of that term is certainly something worth worrying about. But whatever one wants to call this type of behavior from the Post, it is a much greater menace given how far the reach is of the institutions that engage in it.

  

  

• Mexico Panics As Trump's Leverage "Far Greater Than What Mexican Elites Thought"

  Earlier this morning we noted that the Mexican Peso was plunging once again – very close to all-time record lows – as fears spread that Ford’s decision yesterday to cancel a $1.6 billion plant may become the norm following president-elect Trump’s tweet that “this is just the beginning.”

  Thank you to Ford for scrapping a new plant in Mexico and creating 700 new jobs in the U.S. This is just the beginning – much more to follow

  — Donald J. Trump (@realDonaldTrump) January 4, 2017

   

  And here is the peso:

  

   

  And while many senior politicians within the Mexican government dismissed Trump’s campaign speeches as empty rhetoric, per the Associated Press, Ford’s cancellation of it’s $1.6 billion auto plant has served as a “much needed wake-up call” that shows that Trump has far greater leverage “than what Mexican elites thought until recently.”

  “Trump leaves Mexico without 3,600 jobs,” read the headline on El Universal. “Ford’s braking jolts the peso,” said Reforma, referring to the Mexican currency’s nearly 1 percent slump following the news.

   

  Two weeks before inauguration, the scuttling of the planned Ford factory and Trump’s pressure on General Motors should be a “much-needed wake-up call,” said Mexico analyst Alejandro Hope.

   

  It shows “how much actual leverage Trump has within specific companies, which is far greater than what Mexican elites thought until recently,” Hope said. “They claimed that at the end of the day economic interests would prevail over political messaging. That’s clearly not the case.”

  All of which has caused some level of panic within the Mexican political and media spheres from the elites who are slowly realizing that when Trump says he wants to disrupt the status quo by renegotiating NAFTA and building a border wall, “he means it”….as completely shocking as it may be that a politcian might actually mean what he says. 

  In an editorial, El Universal also recalled the deal Trump struck in December with Carrier to keep 800 of 1,300 jobs at an Indiana furnace factory from being sent to Mexico, in return for millions of dollars in tax incentives. It also implicitly criticized the Mexican government’s response to the incoming administration.

   

  “Mexico loses thousands of jobs with no word on a clear strategy for confronting the next U.S. government which has presented itself as protectionist and, especially, anti-Mexican,” the paper wrote. “Trump will try to recover as many U.S. companies that have set up in Mexico as possible. He will try to make them return at whatever cost, through threats or using public resources.”

   

  “Ford’s decision is indicative of what awaits the economies of both countries,” the daily La Jornada said. “For ours a severe decrease in investment from our neighboring country, and for the U.S. a notable increase in their production costs.”

   

  Hope said more decisions like Ford’s are likely to come. And while the loss of a single planned plant probably does not fundamentally change the U.S.-Mexico economic relationship, “it certainly shows that the idea that the status quo was entrenched was false.”

   

  “This should put us on notice that when he says that he wants to renegotiate NAFTA, he means it,” Hope said.

  As we pointed out a few days ago, with Trump scoring new victories with every passing day, the question no longer seems to be whether or not Vicente Fox will pay for the “f**king wall,” but rather, how he’ll pay for it…cash or credit, Mr. Fox?

  

  

• Let’s Play FOMC Bingo: Minutes Show 15 Instances of Uncertainty

  Submitted by Mish Shedlock of MishTalk

  The Fed released Minutes of the December 13-14, 2016 FOMC Meeting today.

  Let’s dive into the minutes to dissect the amount of Fed uncertainty.

  1. Market-based measures of uncertainty regarding monetary policy at horizons beyond one year moved up, suggesting that some of the firming in OIS rates could reflect a rise in term premiums.
  2. The declines in EME currencies and risky asset prices were reportedly driven by higher U.S. yields as well as by uncertainty about possible changes in U.S. trade policies.
  3. The staff viewed the uncertainty around its projections for real GDP growth, the unemployment rate, and inflation as similar to the average of the past 20 years. The risks to the forecast for real GDP were seen as tilted to the downside, reflecting the staff’s assessment that monetary policy appeared to be better positioned to offset large positive shocks than substantial adverse ones. In addition, the staff continued to see the risks to the forecast from developments abroad as skewed to the downside.
  4. In their discussion of their economic forecasts, participants emphasized their considerable uncertainty about the timing, size, and composition of any future fiscal and other economic policy initiatives as well as about how those polices might affect aggregate demand and supply.
  5. Many participants underscored the need to continue to weigh other risks and uncertainties attending the economic outlook. In that regard, several noted upside risks to U.S. economic activity from the potential for better-than-expected economic growth abroad or an acceleration of domestic business investment. Among the downside risks cited were the possibility of additional appreciation of the foreign exchange value of the dollar, financial vulnerabilities in some foreign economies, and the proximity of the federal funds rate to the effective lower bound.
  6. Several participants also commented on the uncertainty about the outlook for productivity growth or about the potential effects of tight labor markets on labor supply and inflation.
  7. Some contacts thought that their businesses could benefit from possible changes in federal spending, tax, and regulatory policies, while others were uncertain about the outlook for significant government policy changes or were concerned that their businesses might be adversely affected by some of the proposals under discussion.
  8. A few added that continued gradual strengthening in labor markets would help return inflation to the Committee’s 2 percent objective. But some other participants were uncertain that a period of tight labor utilization would yield lasting labor market benefits or were concerned that it risked a buildup of inflationary pressures.
  9. A few participants noted the uncertainty surrounding real?time estimates of the longer-run normal rate of unemployment, and it was pointed out that geographic variation in labor market conditions contributed to that uncertainty.
  10. Many participants expressed the need for caution in evaluating the implications of recent financial market developments for the economic outlook, in light of the uncertainty about how federal spending, tax, and regulatory policies might unfold and how global economic and financial conditions will evolve.
  11. While viewing a gradual approach to policy firming as likely to be appropriate, participants emphasized the need to adjust the policy path as economic conditions evolved. They pointed to a number of risks that, if realized, might call for a different path of policy than they currently expected. Moreover, uncertainty regarding fiscal and other economic policies had increased.
  12. Moreover, many participants emphasized that the greater uncertainty about these policies made it more challenging to communicate to the public about the likely path of the federal funds rate.
  13. Participants noted that, in the circumstances of heightened uncertainty, it was especially important that the Committee continue to underscore in its communications that monetary policy would continue to be set to promote attainment of the Committee’s statutory objectives of maximum employment and price stability.
  14. Members agreed that there was heightened uncertainty about possible changes in fiscal and other economic policies as well as their effects.

  Uncertainty Scorecard

  • 15 instances of derivations of “uncertainty”
  • 2 instances of “heightened uncertainty“
  • 2 instances of “uncertain“
  • 1 instance of a sentence with with the word “uncertainty” used twice
  • 1 instance of “greater uncertainty“
  • 1 instance of “considerable uncertainty“
  • 1 instance of “uncertainties” plural

  FOMC Minutes Bingo

  

  In FOMC Bingo you have to get every box filled. There were better cards. Wizard was a killer. Otherwise, I had a chance.

  Fed Uncertainty Principle

  Let’s review the Fed Uncertainty Principle and its corollaries  as I wrote them on April 3, 2008, before the crash.

  Fed Uncertainty Principle:

   

  The fed, by its very existence, has completely distorted the market via self reinforcing observer/participant feedback loops. Thus, it is fatally flawed logic to suggest the Fed is simply following the market, therefore the market is to blame for the Fed’s actions. There would not be a Fed in a free market, and by implication there would not be observer/participant feedback loops either.

   

  Corollary Number One:

   

  The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn’t know (much more than it wants to admit), particularly in times of economic stress.

   

  Corollary Number Two:

   

  The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

   

  Corollary Number Three:

   

  Don’t expect the Fed to learn from past mistakes. Instead, expect the Fed to repeat them with bigger and bigger doses of exactly what created the initial problem.

   

  Corollary Number Four:

   

  The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it’s easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.

  Economists Predict Uncertainty to Clear Up

  If and when the economists are ever “certain” about the economy, I am certain they will be wrong.

  Back in August, I noted Economists Expect “Mount Everest” of Uncertainty to Clear Up by December

  What happened?

  Attempts by the Fed and economists to measure uncertainty are certainly ridiculous.

  

  

• Rand Paul Introduces Bill to Audit the Fed, Says it Has Trump Support

  Literally nothing is going to happen here. Let’s not pretend Congress will actually pass a Rand Paul bill that simply requests for the Federal Reserve to be audited. After all, they’re the central bank for the world now, rigging markets and fixing rates almost on demand. There are a lot of people with a lot of questions for the Fed — an entity who presides over an unlimited balance sheet and the power to both print fiat currency at will and to increase the amount of interest it charges the U.S. government.

  Any person or entity under the auspices of the SEC or FINRA is forced to undergo routine audits, just to make sure everything is kosher. Why isn’t the same standard used for the Fed?

  Rand Paul wants to change that and he says it has the support of President elect Trump.
   

  On Tuesday, U.S. Senator Rand Paul reintroduced his Federal Reserve Transparency Act, widely known as the “Audit the Fed” bill, to prevent the Federal Reserve from concealing vital information on its operations from Congress. Eight cosponsors joined Senator Paul on the legislation.
   
  Representative Thomas Massie (KY-4) has introduced companion legislation, H.R. 24, in the U.S. House.
   
  “No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve,” said Sen. Paul, “yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives.”
   
  “The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress.”
   
  “The American public deserves more insight into the practices of the Federal Reserve,” said Rep. Massie. “Behind closed doors, the Fed crafts monetary policy that will continue to devalue our currency, slow economic growth, and make life harder for the poor and middle class. It is time to force the Federal Reserve to operate by the same standards of transparency and accountability to the taxpayers that we should demand of all government agencies.”
   
  On January 12, 2016, a bipartisan Senate majority voted 53-44 in support of Audit the Fed.
   
  S. 16 would require the nonpartisan, independent Government Accountability Office (GAO) to conduct a thorough audit of the Federal Reserve’s Board of Governors and reserve banks within one year of the bill’s passage and to report back to Congress within 90 days of completing the audit.
   
  Audit the Fed would amend section 714b of Title 31 of the U.S. Code to allow the GAO to fully audit:
   
  transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
   
  deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
   
  transactions made under the direction of the Federal Open Market Committee; or
   
  a part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.

  

  Isn’t anyone interested in learning how this happened and how they intend to unwind it?

  

   

   

  

• It's The "Most Volatile" Year For Political Risk Since World War II

  "In 2017 we enter a period of geopolitical recession," warns Eurasia Group president Ian Bremmer, adding that international war or "the breakdown of major central government institutions" isn't inevitable, though "such an outcome is now thinkable." In the company's 19th annual outlook, Eurasia fears that U.S. unilateralism under Donald Trump, China’s growing assertiveness and a weakened German Chancellor Angela Merkel will make 2017 the "most volatile" year for political risk since World War II.

   

  This is the most volatile year for political risk since World War II, @EurasiaGroup says https://t.co/7EfzqhH11p pic.twitter.com/E7XwVa5VkP

  — Bloomberg (@business) January 3, 2017

   

  As Bloomberg reports, the warning is a reminder of the range of threats to stability in 2017, from elections in Germany, France and the Netherlands and Britain’s planned exit from the European Union to setbacks in emerging nations such as Brazil and refugee crises.

  With Trump’s ascent to the presidency on an America First platform, the global economy can’t count on the U.S. to provide “guardrails” anymore, according to Eurasia, which advises investors on political risk. Trump’s signals of a thaw with Russia, skepticism toward the North Atlantic Treaty Organization and his “alignment” with European anti-establishment parties such as France’s National Front could weaken the main postwar alliance protecting the global order, according to the report released Tuesday.

   

  “You could see an environment that geopolitically is by far the worst that we’ve experienced in decades in 2017 and yet the investment into the U.S. markets and the strength of the American dollar is going to grow,” he said in a Bloomberg Television interview.

  In China, a scheduled leadership transition makes it likely that President Xi Jinping will be “more likely than ever to respond forcefully to foreign policy challenges,” potentially leading to spikes in U.S.-China tensions, according to Eurasia. To maintain domestic stability, Xi might “overreact” to any sign of economic trouble, leading to a risk of new asset bubbles or capital controls, Eurasia said.

  Merkel, who is seeking re-election in the fall, faces likely disputes over Brexit, Greece’s simmering debt crisis and an “increasingly authoritarian” Turkish President Recep Tayyip Erdogan, threatening a refugee accord between the EU and Turkey.

  “Despite just how wrong the polls have been in recent major electoral contests across the developed world, Merkel will win a fourth consecutive term,” the report said. “But the need to appease domestic critics this year will leave her a diminished figure, impacting the quality of her leadership both at home and in the EU.”

  Other risks cited by Eurasia include:

  • Lack of economic reforms, with only China on a “positive trajectory” among 14 major nations and Italy, Russia, Saudi Arabia, South Africa, Turkey and the U.K. declining.

  

  • Politicians blaming central banks, including the Federal Reserve, for economic woes. Such attacks mark “a risk to global markets in 2017 by threatening to upend central banks’ roles as technocratic institutions that provide financial and economic stability.”
  • A “witch hunt” against parts of the opposition in Turkey, even tighter control over government and the media by Erdogan, and pressure on the Turkish central bank to keep rates low and rely increasingly on fiscal stimulus to offset slowing growth.
  • North Korea’s nuclear program, which may yield some 20 nuclear weapons, combined with technological advances allowing strikes at the U.S. west coast in the future.
  • National Front leader Marine Le Pen winning the French presidential election is the biggest political risk in Europe, where EU ties and the euro area are “in a process of gradual, slow-motion disintegration,” New York University economics professor Nouriel Roubini said on Bloomberg Television. “If Le Pen comes to power in France, if an anti-euro party comes to power in Italy, this could be the beginning of the end of Europe and the euro zone,” he said.

  Eurasia concludes…

  This year marks the most volatile political risk environment in the postwar period, at least as important to global markets as the economic recession of 2008. It needn’t develop into a geopolitical depression that triggers major interstate military conflict and/or the breakdown of major central government institutions. But such an outcome is now thinkable, a tail risk from the weakening of international security and economic architecture and deepening mistrust among the world’s most powerful governments.

  Full Eurasia Group Report below…

  

  

• Manhattan Apartment Prices Collapse Most In Four Years

  When Douglas Eilliman released their 3Q 2016 recap of Manhattan real estate sales, it basically showed that pricing held up during the quarter as sellers refused to lower their asks but the number of closings collapsed as buyers started to back away from a market that was starting to look bubbly.  Here was our conclusion at the end of 3Q:

  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.

  Well, it seems as though sellers took note and decided to slash asking prices in 4Q.  With median prices dropping 6.3% year-ove-year, 4Q 2016 marked the biggest quarterly decline in Manhattan real estate prices in 4 years, according to a note from Bloomberg.

  

   

  After being forced to slash his asking price twice in two months on a property in Chelsea, Rex Gonsalves notes that “This isn’t a market where you go into a bidding war.”

  Rex Gonsalves, a broker with Halstead Property, thought $715,000 was a fair price for a one-bedroom co-op apartment in Chelsea with an outdoor patio. But after one month on the market, the best offers that came in were about 30 percent lower, he said.

   

  The sellers agreed to cut the price twice in two months, bringing it down to $649,000. That attracted two offers — one below the asking price and one above it, Gonsalves said. The 16th Street apartment sold in December for the higher price, $659,000.

   

  “This isn’t a market where you go into a bidding war,” he said. “When we got this offer over ask, the sellers said, ‘This is great.’ It really helps to have savvy sellers, who understand the market.”

  Meanwhile, after scrapping a lot of deals in 3Q 2016 due to unrealistic asking prices, Jonathan Miller, of brokerage Miller Samuel, told Bloomberg that sellers are slowly coming to terms with the reality that prices need to come down if they actually want to sell their apartments rather than just pretend.

  “Maybe we’re heading out of the period when there was no shame in overpricing your home,” Jonathan Miller, president of Miller Samuel, said in an interview. “We’re moving away from that and into something more pragmatic: Do you want to actually sell your property or do you want to pretend? Part of selling is pricing correctly or being more negotiable.”

   

  Buyers agreed to pay more than the asking price in just 13 percent of all sales that closed in the quarter, down from 29 percent a year earlier, the firms said. They also are taking longer to make a decision: Previously owned properties that sold in the period spent an average of 80 days on the market, up from 71 days a year earlier. Manhattan resale deals totaled 2,385, a decline of 1.5 percent.

   

  “We saw buyers acting a lot more aggressively with their bidding,” said Pamela Liebman, chief executive officer of brokerage Corcoran Group, which released its own report Wednesday that showed a decrease in sales for the quarter. “They didn’t hesitate to come in and make low offers. A lot of sellers remained unrealistic throughout the year, and that killed a lot of deals.”

  With the floodgates open, the only question now is how low will prices have to drop to clear the massive inventory overhang on the New York market?  Once fear grips that market, the race to the bottom can be quick and painful.

  

  

• Second Video Emerges Of Same Chicago Teens Assaulting Another Trump Supporter – Chicago PD Responds

  

  UPDATE: Chicago PD Press Conference reveals that the four suspects in custody are all adults, and the victim who is special needs, had been with the perpetrators for 24-48 hours. Charges should be forthcoming. Officals aren’t willing to call it a hate crime at this point.

  As reported earlier on this site, four Chicago teens are in custody after a they live streamed what appears to be the kidnapping, beating, and mutilation of a white Trump supporter (scroll down for footage). In the profanity-laced video, the victim is seen bound and gagged in a corner while the thugs alternate between striking the man, cutting him, and threatening his life with anti-white / anti-Trump hate speech. This is apparently the second time these assailants have done this to a Trump supporter, as further investigation has uncovered a second prior video of a similar attack.

  “F*ck Donald Trump, F*ck white people”

  “There’s gonna be a murder. Pop pop pop”

  “We gonna put this bitch in the trunk, put a brick on the gas, like aaaaaaaaah”

  “Pistol whip his ass, fool“

   

  Currently in custody: 

    

  The woman who recorded the attack showed no remorse in the video’s comments section (which has been deleted):

  

  More Facebook reactions:

  

  And the full 28 minute disturbing video of the incident (NSFW):

  The victim is currently being treated for his injuries at a local hospital.

  Meanwhile, an earlier look through the suspect’s Facebook feed led to another video of the same assailants abusing another Trump supporter in a similar attack. During the attack, the victim is made to kiss the floor and say “F*ck Donald Trump” at knifepoint. 

  As a wise man named Chuck once said

  “This can’t be real. Nobody is that stupid.”

  Content originally generated at iBankCoin.com

  

• Trump Is Working On A Plan To Restructure, Pare Back The CIA And America's Top Spy Agency

  Just in case the accusations that president-elect Donald Trump is a puppet of the Kremlin, intent on destabilizing and weakening the US weren’t loud enough, moments ago the WSJ assured these would hit an unprecedented level with a report that Trump, a harsh critic of U.S. intelligence agencies, is working with top advisers on a plan that would restructure and pare back the nation’s top spy agency, the Office of the Director of National Intelligence, prompted by a belief that it has “become bloated and politicized.”

  The Office of the Director of National Intelligence, or ODNI, was established in 2004 in large part to boost coordination between intelligence agencies following the Sept. 11, 2001 terror attacks.

  The planning comes in a time of turbulence between Trump and American intelligence agencies: the president-elect has leveled a series of social media attacks in recent months and the past few days against the U.S. intelligence apparatus, at times dismissing and mocking their assessment – perhaps with cause, after all there is still no evidence – that the Russian government hacked emails of Democratic groups and John Podesta and then leaked them to WikiLeaks and others in an effort to help Trump win the White House.

  According to the Journal, among those helping lead Mr. Trump’s plan to restructure the intelligence agencies is his national security adviser, Lt. Gen. Michael Flynn, who had served as director of the Defense Intelligence Agency until he was pushed out by DNI James Clapper and others in 2013. Also involved in the planning is Rep. Mike Pompeo (R., Kan.), who Mr. Trump selected to be his CIA director.

  It’s not just the ODNI: one of the people familiar with Trump’s planning told the WSJ his advisors also are working on a plan to restructure the Central Intelligence Agency, cutting back on staffing at its Virginia headquarters and pushing more people out into field posts around the world. The CIA declined to comment on the plan.

  

  “The view from the Trump team is the intelligence world [is] becoming completely politicized,” said the individual, who is close to the Trump transition operation. “They all need to be slimmed down. The focus will be on restructuring the agencies and how they interact.”

  Trump may have a point: after all it was the Democrats who accused the FBI of being so politicized that Comey’s reopening of the Clinton email server case is what cost her the presidency. Alternatively, Trump has listed his reasons to allege that the CIA is likewise “politicized”, however in the other direction.

  To be sure, he has been quite open about his feelings on the subject. In one of his Wednesday tweets, Trump referenced an interview that WikiLeaks editor in chief Julian Assange gave to Fox News in which he denied Russia had been his source for the thousands of hacked Podesta and DNC emails. As reported earlier, Trump tweeted: “Julian Assange said ‘a 14 year old could have hacked Podesta’—why was DNC so careless? Also said Russians did not give him the info!”

  In response, Trump was criticized by both Democratic and Republican lawmakers and from intelligence and law-enforcement officials for praising Russian President Vladimir Putin, for attacking American intelligence agencies, and for embracing Mr. Assange, long viewed with disdain by government officials and lawmakers.

  “We have two choices: some guy living in an embassy on the run from the law…who has a history of undermining American democracy and releasing classified information to put our troops at risk, or the 17 intelligence agencies sworn to defend us,” said Sen. Lindsey Graham. “I’m going with them.”

  Additionally, Trump’s advisers say he has long been skeptical of the CIA’s accuracy, and the president-elect often mentions faulty intelligence in 2002 and 2003 concerning Iraq’s weapons programs. But he has focused his skepticism of the agencies squarely on their Russia assessments, which has jarred analysts who are accustomed to more cohesion with the White House.

  The rest of the story is largely familiar: here is the rundown from the WSJ

  Top officials at U.S. intelligence agencies, as well as Republican and Democratic leaders in Congress, have said Russia orchestrated the computer attacks that hacked and leaked Democratic Party emails last year. President Barack Obama ordered the intelligence agencies to produce a report on the hacking operation, and he is expected to presented with the findings on Thursday.Russia has long denied any involvement in the hacking operation, though Mr. Putin has said releasing the stolen emails served a public service.

   

  The heads of the CIA, Federal Bureau of Investigation, and Director of National Intelligence James Clapper are scheduled to brief Mr. Trump on the findings on Friday. Mr. Trump tweeted late Tuesday that this meeting had been delayed and suggested that the agencies still needed time to “build a case” against Russia.

   

  White House officials said Mr. Trump will be briefed on the hacking report as soon as it is ready. White House officials have been increasingly frustrated by Mr. Trump’s confrontations with intelligence officials.

   

  “It’s appalling,” the official said. “No president has ever taken on the CIA and come out looking good.”

  * * *

  In what some may see as a preemptive counter-coup against unfriendly elements, the WSJ notes that Trump shares the view of Flynn and Pompeo that the intelligence community’s position that Russians tried to help his campaign is an attempt to undermine his victory or say he didn’t win, the official close to the transition said.

  Flynn will lead the White House’s National Security Council, giving him broad influence in military and intelligence decisions throughout the government. He is also a believer in rotating senior intelligence agencies into the field and reducing headquarters staff.

  Meanwhile, current and former intelligence and law-enforcement officials have reacted with a mix of bafflement and outrage to Mr. Trump’s continuing series of jabs at U.S. spies. “They are furious about it,” said one former senior intelligence official, adding that a retinue of senior officials who thought they would be staying on in a Hillary Clinton administration now are re-evaluating their plans following Mr. Trump’s election.

  Additionally, current and former officials said it was particularly striking to see Trump quote Assange in tweets. “It’s pretty horrifying to me that he’s siding with Assange over the intelligence agencies,’’ said one former law-enforcement official.

  And that may explain why Trump has decided to overhaul the entire US security apparatus from the ground up.

  Paul Pillar, a 28-year veteran of the CIA who retired in 2005, said he was disturbed by Trump’s tweets and feared much of the intelligence community’s assessments could be filtered through Lt. Gen. Flynn, chosen by Mr. Trump as his national security adviser.

  “I’m rather pessimistic,” he said. “This is indeed disturbing that the president should come in with this negative view of the agencies coupled with his habits on how he absorbs information and so on that don’t provide a lot of hope for change.”

  As a result of Trump’s unprecedented overhaul of the US intelligence apparatus, we expect that to soon hear the loudest calls for Trump committing treason yet.

  

  

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• The Titanic Sails At Dawn: Warning Signs Point To Danger Ahead In 2017

  Submitted by John Whitehead via The Rutherford Institute,

  “When did the future switch from being a promise to being a threat?” ? Chuck Palahniuk, Invisible Monsters

  Despite our best efforts, we in the American police state seem to be stuck on repeat, reliving the same set of circumstances over and over and over again: egregious surveillance, strip searches, police shootings of unarmed citizens, government spying, censorship, retaliatory arrests, the criminalization of lawful activities, warmongering, indefinite detentions, SWAT team raids, asset forfeiture, etc.

  Unfortunately, as a nation we’ve become so desensitized to the government’s acts of violence, so accustomed to reports of government corruption, and so anesthetized to the sights and sounds of Corporate America marching in lockstep with the police state that few seem to pay heed to the warning signs blaring out the message: Danger Ahead.

  Remember, the Titanic received at least four warnings from other ships about the presence of icebergs in its path, with the last warning issued an hour before disaster struck. All four warnings were ignored.

  Like the Titanic, we’re plowing full steam ahead into a future riddled with hidden and not-so-hidden dangers. We too have been given ample warnings, only to have them drowned out by a carefully choreographed cacophony of political noise, cultural distractions and entertainment news—what the Romans termed “bread and circuses”—aimed at keeping the American people polarized, pacified and easily manipulated.

  However, there is still danger ahead. The peril to our republic remains the same.

  As long as a permanent, unelected bureaucracy—a.k.a. the shadow government— continues to call the shots in the halls of power and the reach of the police state continues to expand, the crisis has not been averted.

  Here’s a glimpse of some of the nefarious government programs we’ll be encountering on our journey through the treacherous waters of 2017.

  Mandatory quarantines without due process or informed consent: Under a new rule proposed by the Centers for Disease Control and Prevention, government agents will be empowered to indefinitely detain any traveler they suspect of posing a medical risk to others without providing an explanation, subject them to medical tests without their consent, and carry out such detentions and quarantines without any kind of due process or judicial review.

   

  Mental health assessments by non-medical personnel: As a result of a nationwide push to train a broad spectrum of so-called gatekeepers such as pastors, teachers, hair stylists, bartenders, police officers and EMTs in mental health first-aid training, more Americans are going to run the risk of being reported by non-medical personnel and detained for having mental health issues.

   

  Tracking chips for citizens: Momentum is building for the government to be able to track citizens, whether through the use of RFID chips embedded in a national ID card or through microscopic chips embedded in one’s skin. In December 2016, the House of Representatives overwhelmingly approved legislation allowing police to track individuals suffering from some form of mental disability such as Alzheimer’s or autism by way of implanted chips.

   

  Military training to deal with anti-establishment movements in megacities: The future, according to a Pentagon training video, will be militaristic, dystopian and far from friendly to freedom. Indeed, if this government propaganda-piece that is being used to train special forces is to be believed, the only thing that can save the world from outright anarchy—in the eyes of the government, at least—is the military working in conjunction with local police. The video confirms what I’ve been warning about for so long: in the eyes of the U.S. government and its henchmen, the battlefield of the future is the American home front.

   

  Government censorship of anything it classifies as disinformation: This year’s National Defense Authorization Act, which allocates $619 billion for war and military spending, not only allows the military to indefinitely detain American citizens by placing them beyond the reach of the Constitution, but it also directs the State Department to establish a national anti-propaganda center to “counter disinformation and propaganda.” Translation: the government plans to crack down on anyone attempting to exercise their First Amendment rights by exposing government wrongdoing, while persisting in peddling its own brand of fake news.

   

  Threat assessments: Government agents—with the help of automated eyes and ears, a growing arsenal of high-tech software, hardware and techniques, government propaganda urging Americans to turn into spies and snitches, as well as social media and behavior sensing software—are spinning a sticky spider-web of threat assessments, behavioral sensing warnings, flagged “words,” and “suspicious” activity reports aimed at snaring potential enemies of the state. It’s the American police state rolled up into one oppressive pre-crime and pre-thought crime package.

   

  War on cash: The government and its corporate partners are engaged in a concerted campaign to do away with large bills such as $20s, $50s, $100s and shift consumers towards a digital mode of commerce that can easily be monitored, tracked, tabulated, mined for data, hacked, hijacked and confiscated when convenient. As economist Steve Forbes concludes, “The real reason for this war on cash—start with the big bills and then work your way down—is an ugly power grab by Big Government. People will have less privacy: Electronic commerce makes it easier for Big Brother to see what we’re doing, thereby making it simpler to bar activities it doesn’t like, such as purchasing salt, sugar, big bottles of soda and Big Macs.”

   

  Expansive surveillance: Whether you’re walking through a store, driving your car, checking email, or talking to friends and family on the phone, you can be sure that some government agency, whether the NSA or some other entity, will still be listening in and tracking your behavior. This doesn’t even begin to touch on the corporate trackers who work with the government to monitor your purchases, web browsing, Facebook posts and other activities taking place in the cyber sphere. In such an environment, we are all suspects to be spied on, searched, scanned, frisked, monitored, tracked and treated as if we’re potentially guilty of some wrongdoing or other.

   

  Militarized police: Americans are finding their once-peaceful communities transformed into military outposts, complete with tanks, weaponry, and other equipment designed for the battlefield. Now, the Department of Homeland Security, the Justice Department and the FBI are preparing to turn the nation’s police officers into techno-warriors, complete with iris scanners, body scanners, thermal imaging Doppler radar devices, facial recognition programs, license plate readers, cell phone extraction software, Stingray devices and so much more.

   

  Police shootings of unarmed citizens: Owing in large part to the militarization of local law enforcement agencies, not a week goes by without more reports of hair-raising incidents by police imbued with a take-no-prisoners attitude and a battlefield approach to the communities in which they serve. Indeed, as a special report by The Washington Post reveals, despite heightened awareness of police misconduct, the number of fatal shootings by officers in 2016 remained virtually unchanged from the year before.

   

  False flags and terrorist attacks: Despite the government’s endless propaganda about the threat of terrorism, statistics show that you are 17,600 times more likely to die from heart disease than from a terrorist attack. You are 11,000 times more likely to die from an airplane accident than from a terrorist plot involving an airplane. You are 1,048 times more likely to die from a car accident than a terrorist attack. You are 404 times more likely to die in a fall than from a terrorist attack. And you are 8 times more likely to be killed by a police officer than by a terrorist.

   

  Endless wars to keep America’s military’s empire employed: The military industrial complex that has advocated that the U.S. remain at war, year after year, is the very entity that will continue to profit the most from America’s expanding military empire. The U.S. Department of Defense is the world’s largest employer, with more than 3.2 million employees. Thus far, the U.S. taxpayer has been made to shell out more than $1.6 trillion to wage wars in Afghanistan and Iraq. When you add in military efforts in Pakistan, as well as the lifetime price of health care for disabled veterans and interest on the national debt, that cost rises to $4.4 trillion.

   

  Attempts by the government to identify, target and punish so-called domestic “extremists”: The government’s anti-extremism program will, in many cases, be utilized to render otherwise lawful, nonviolent activities as potentially extremist. To this end, police will identify, monitor and deter individuals who exhibit, express or engage in anything that could be construed as extremist before they can become actual threats. This is pre-crime on an ideological scale.

   

  SWAT team raids: More than 80% of American communities have their own SWAT teams, with more than 80,000 of these paramilitary raids are carried out every year. That translates to more than 200 SWAT team raids every day in which police crash through doors, damage private property, kill citizens, terrorize adults and children alike, kill family pets, assault or shoot anyone that is perceived as threatening—and most often in the pursuit of someone merely suspected of a crime, usually some small amount of drugs.

   

  Erosions of private property: Private property means little at a time when SWAT teams and other government agents can invade your home, break down your doors, kill your dog, wound or kill you, damage your furnishings and terrorize your family. Likewise, if government officials can fine and arrest you for growing vegetables in your front yard, praying with friends in your living room, installing solar panels on your roof, and raising chickens in your backyard, you’re no longer the owner of your property.

   

  Overcriminalization: The government’s tendency towards militarization and overcriminalization, in which routine, everyday behaviors become targets of regulation and prohibition, has resulted in Americans getting arrested for making and selling unpasteurized goat cheese, cultivating certain types of orchids, feeding a whale, holding Bible studies in their homes, and picking their kids up from school.

   

  Strip searches and the denigration of bodily integrity: Court rulings undermining the Fourth Amendment and justifying invasive strip searches have left us powerless against police empowered to forcefully draw our blood, forcibly take our DNA, strip search us, and probe us intimately. Accounts are on the rise of individuals—men and women alike—being subjected to what is essentially government-sanctioned rape by police in the course of “routine” traffic stops.

   

  Drones: As corporations and government agencies alike prepare for their part in the coming drone invasion—it is expected that at least 30,000 drones will occupy U.S. airspace by 2020, ushering in a $30 billion per year industry—it won’t be long before American citizens find themselves to be the target of these devices. Drones—unmanned aerial vehicles—will come in all shapes and sizes, from nano-sized drones as small as a grain of sand that can do everything from conducting surveillance to detonating explosive charges, to middle-sized copter drones that can deliver pizzas to massive “hunter/killer” Predator warships that unleash firepower from on high.

   

  Prisons: America’s prisons, housing the largest number of inmates in the world and still growing, have become money-making enterprises for private corporations that manage the prisons in exchange for the states agreeing to maintain a 90% occupancy rate for at least 20 years. And how do you keep the prisons full? By passing laws aimed at increasing the prison population, including the imposition of life sentences on people who commit minor or nonviolent crimes such as siphoning gasoline.

   

  Censorship: First Amendment activities are being pummeled, punched, kicked, choked, chained and generally gagged all across the country. Free speech zones, bubble zones, trespass zones, anti-bullying legislation, zero tolerance policies, hate crime laws and a host of other legalistic maladies dreamed up by politicians and prosecutors have conspired to corrode our core freedoms. The reasons for such censorship vary widely from political correctness, safety concerns and bullying to national security and hate crimes but the end result remains the same: the complete eradication of what Benjamin Franklin referred to as the “principal pillar of a free government.”

   

  Fascism: As a Princeton University survey indicates, our elected officials, especially those in the nation’s capital, represent the interests of the rich and powerful rather than the average citizen. We are no longer a representative republic. With Big Business and Big Government having fused into a corporate state, the president and his state counterparts—the governors—have become little more than CEOs of the Corporate State, which day by day is assuming more government control over our lives. Never before have average Americans had so little say in the workings of their government and even less access to their so-called representatives.

  James Madison, the father of the Constitution, put it best when he warned: “Take alarm at the first experiment with liberties.” Anyone with even a casual knowledge about current events knows that the first experiment on our freedoms happened long ago.

  We are fast moving past the point of no return when it comes to restoring our freedoms. Worse, as I make clear in my book Battlefield America: The War on the American People, we can barely see the old America with its revolutionary principles and value for independence in the rear view mirror. The only reality emerging generations will know is the one constructed for them by the powers-that-be, and you can rest assured that it will not be a reality that favors individuality, liberty or anything or anyone who challenges the status quo.

  As a senior advisor to George W. Bush observed, “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors . . . and you, all of you, will be left to just study what we do.”

  In other words, the government has been operating ten steps ahead for quite some time now, and we have yet to catch up, let alone catch our breath as the tides of change swirl around us.

  You’d better tighten your seatbelts, folks, because we could be in for a rough ride in 2017.

  

  

• Morgan Stanley Warns to Sell the Inauguration While Greatly Increasing 2018 Earnings Forecast

  Morgan Stanley is out with a helter skelter note of caution on markets, warning investors to sell the Trump inauguration while upping earnings estimates by 18% for 2018 — citing material upside in earnings and multiple contraction.
   
  Plainly, if what Morgan Stanley says comes to fruition, stocks should trade higher on the backs of buybacks, fiscal stimulus, and big corporate tax cuts. However, the sages at Morgan are worried about the recent scale of the rally, coupled with Fed hike fever risks, European uncertainty and of course a rising dollar.
   
  They see no near term catalyst to drive shares after the inauguration and suggest investors start to think about getting out.

  U.S. stocks have rallied since the election, but it’s time for investors to start thinking about getting out, possibly timed for President-elect Donald Trump’s inauguration, Morgan Stanley said.
   
  “We are worried that there is arrogance in telling people that they should be worried, but to stay bullish for now,” Morgan Stanley said in a note dated Tuesday.
   
  “Part of us thinks we should just sell the inauguration. After all, what incrementally positive and exciting outcomes could be produced in the first few weeks after that?”
   
  “To us, it is WHEN, not IF we should fade this recent reflation trade,” it said.
   
  Morgan Stanley set its base-case target for the S&P 500 at 2300 at end-2017, marking 16.2 times its 2018 earnings forecast, compared with Tuesday’s close at 2257.83.
   
  “We can’t help but think that the Republican sweep has created a more uncertain and volatile outlook for the economy and corporate earnings growth,” it said, citing risks from a more hawkish Federal Reserve, China’s economic slowdown, a much stronger dollar and European political uncertainty.
   
  Morgan Stanley said there was clearly a lot of earnings uncertainty ahead, but it still forecast that the S&P 500 earnings would be about 18 percent higher in 2018 than in 2016.
   
  But it noted that the biggest driver of that increase – more than 50 percent of it — would come from Trump’s promised corporate tax cut to 20 percent from 35 percent. Another 30 percent of the earnings rise over the next two years would likely come from fiscal stimulus and nearly 27 percent from acceleration in share buybacks, it added.

   
  One final note of weariness by Morgan is the possibility that companies might pass on cost savings to consumers following Trump’s tax cuts. This abhorrent specter of ‘competing away’ savings is hateful to Morgan and they feel that could pose as a potential pitfall for markets.
   
  God willing, our valiant and industrious corporations will continue to gouge us and take said tax savings to increase corporate bonuses for C level executives and execute superfluous share buybacks to further enhance their standing at their local country clubs.

  Content originally generated at iBankCoin.com

  

• There's A Massive Restaurant Bubble, And It's About To Burst

  In January 2009, just three days after his inauguration, an arrogant President Obama, a “community organizer” and one-term senator from Illinois, proclaimed to then Republican Whip Eric Cantor that “elections have consequences, and at the end of the day, I won.”  Unfortunately, he was absolutely right and the consequences of Obama’s election, having already crushed the coal industry, are about to bring the restaurant industry crashing down as well.

  To be fair, Obama hasn’t crushed the restaurant industry single-handedly.  While Obamacare went a long way toward destroying the industry, it’s demise would not have been certain without a little help from leftist state legislators that have passed a slew of egregious minimum wage hikes in recent years (not that Obama didn’t try and fail twice to accomplish the same thing at the federal level).  Add to that a multi-year run of near 0% interest rates that have driven commercial real estate soaring and a dash of “hope” from culinary grads looking to become America’s next  famous celebrity chef and it’s easy to see that you’ve had a recipe for disaster simmering on low heat for years.

  And while he avoided the political attributions we note above, a recent Thrillist article by Keven Alexander highlights the demise of one independently owned restaurant in San Francisco, AQ, that will be shutting down later this month for all the same reasons. 

  When it comes to minimum wage, Alexander highlights that just a $1 per hour minimum wage increase can reduce an independent restaurant’s already thin profit margins by $20,000, or 10%.  So we imagine the $5 minimum wage hike that California just passed is probably slightly less than optimal for companies like AQ in San Francisco.

  I should say before I go any further that all of the restaurant owners and chefs I’ve talked to are compassionate humans who support better coverage and livable wages, and seem on the whole progressive by nature, but restaurant margins are already slim as hell. There are no political agendas here — they’re just genuinely worried about how to afford to pay extra without radically changing the way they do business.

   

  Let’s start with the minimum wage. According to the Bureau of Labor Statistics, of the 2.6 million people earning around the minimum wage in 2015, the highest percentage came from service jobs in the food industry. Though the Obama administration’s attempt to increase the federal minimum wage above $7.25 failed, 21 states and 22 cities have raised the minimum wage starting this year, including Washington, DC ($12.50 an hour), Massachusetts ($11), New York ($9.70), and Arkansas ($8.50).

   

  Considering that hour-wage workers are usually the lowest earners and the increase is essential to ensure they earn an actual living, this is the least controversial of the newer expenses and something almost everyone in the industry supports, in theory, but it doesn’t change the fact that it’s an additional cost that must be factored in. If you have 10 hourly employees working eight-hour shifts, five days a week and you raise the wages a dollar an hour, that comes out to a nearly $20K increase on the year. In AQ’s best year — a phenomenal year by restaurant standards — that would have been nearly 10% of profits.

  And while California is certainly the poster child for misinformed liberal policies, as the Wall Street Journal recently pointed out, they’re hardly alone in their implementation of a massive minimum wage hike in 2017.

  

   

  Meanwhile, when it comes to Obamacare, Alexander notes that AQ was hit with an incremental $72,000 of annual expenses in 2015 that didn’t exist in 2012, which eroded another ~30% of the company’s peak net income.

  Then there’s health care. For the better part of its history, the restaurant business was a health care-free zone, which is ironic, given this Bureau of Labor Statistics’ description of the back-of-house work environment: “Kitchens are usually crowded and filled with potential dangers.” With the introduction of Obamacare, most restaurant workers finally got the coverage they’ve needed for years through the employer mandate, but critics often talk about the strain it puts on small-business owners due to a puzzling and controversial element that defines “full time” as 30 hours per week, and not the 40-hour workweek used almost everywhere else (the Save American Workers Act proposes to move this back to 40 hours).

   

  Though this mainly affects bigger restaurants with staffs of 50 or more full-time workers, independent sit-down restaurants still need to provide suitable coverage (meaning it has to be affordable, less than 9.5% of the employee’s income) or face fees of $2K per employee. Consider AQ. Semmelhack told me that in 2012 they paid $14,400 for health care costs. In 2015, they paid $86,400. That’s an increase of $72K MORE per year than 2012, or 29% of their best year’s profit.

  Then there are those pesky rental rates which have been driven ever higher by nearly a decade of 0% interest rates that have resulted in artificially high demand for “yieldy” commercial real estate.
  

  In the restaurant world, rent always sucks. Unless you manage to play it perfectly, as a restaurant owner you’re either moving into a sketchy or “emerging” neighborhood where the rent is cheap but few want to go there, or you’re overpaying for an established ‘hood and need to be a runaway success from day one. And even if you do manage to make it in the former type of neighborhood, your success often ends up pricing you out of the ‘hood you helped revitalize.

   

  In Miami, Michelle Bernstein’s Cena by Michy helped rebirth the MiMo historic district but was forced to close this year, after the landlord attempted to triple the rent. And even Danny Meyer had to close and move Union Square Cafe in New York, which, since 1985, had served as one of America’s culinary landmarks, when he couldn’t rationalize paying the huge rent hike the landlord proposed.

  For all the reasons above, Alexander notes that “AQ will serve its last meal sometime in January, 2017″…an inconvenient fact that we’re sure the liberal politicians in Sacramento will promptly ignore. 

  And while the publicly-traded restaurant companies have potentially started to take note of some of the risks above…

  

  …the broader markets, which are also exposed to the same risks albeit to varying degrees, couldn’t seem to care less.

  

  

• Are Chinese Philosopher Kings Losing Their Yuan FX Religion?

  Submitted by Eugen von Bohm-Bawerk via Bawerk.net,

  It took a while, but the world are slowly coming to grips with the simple fact that the red-suzerains in Beijing are not the infallible leaders en route to a new superior economic model as they thought they were. All the craze that emanated from the spurious work of Joshua Cooper Ramo, which eventually led to works like “How China’s Authoritarian Model Will Dominate the Twenty-First Century,” are slowly catching up to reality. We never bought into it and our prediction for 2017 is that most of the pundits commenting on the red Dragon will realize how bad the situation in China really is.  That being said, there were still Japan-bulls in the late 1990s that still believed Japan would eventually become the largest economy on the planet and dominate the world. If we are right, the heliocentric worldview China apparently is taking will quickly turn geocentric, just as it is about to do in the western world. Domestic problems will engulf the leadership in Beijing, and there will be less time to squabble over petty reefs in the South China Sea. The danger is obviously that the political establishment in China will be in dire need to distract the hordes of angry masses that are about to lose their life savings.

  Champions of authoritarian rule saw in China a way to Kallipolis, whereby the platonic Philosopher Kings finally get to rule the world. Not few times have we debated the “China Model” with Chief Economists, Ph.Ds. and other “serious” people, and in just as many times have we been surprised to discover the passionate disdain for so-called lower classes and the unabashed need to guide these fully grown-up children onto the righteous path. A small tax tweak here, a subsidy there and people can allegedly be incentivized to do the “right” thing. Right, obviously, is whatever the philosopher kings deem it to be.  China epitomized Kallipolis for all the kings out there, which is probably why criticism of the system felt personal to them. The China Model has thus been embraced wholeheartedly by the Western elite and explains why China’s many faults have not been addressed properly.

  Another reason for the kings to be a bit evasive is that the China model is, as aforementioned, exactly what they want, but they cannot really say that. China, as we all know, is extremely simple. The lowest platonic classes, the laboring classes, are unbalanced in the sense that greed and foolishness rule these people, therefore they can, and should, be used as lowly paid slaves to the betterment of the whole. The savings they accumulate are controlled and directed as the kings see fit. By plowing enormous amounts of savings back into the system, the economy, as measured by GDP, “grows” and the kings can point to all wonders they are able to create.

  There is a great downside to this system though. The hapless laboring classes cannot afford to live the life their output from production would suggest they should. Since the kings set both wages and return on savings, a mismatch is created between domestic purchasing power and domestic output.

  In their infinite wisdom, the kings decided to rectify this little glitch by sending excess production abroad through heavy-handed exchange rate manipulation. Should foreigners not spend enough though, then the politburo could always resort to domestic boondoggles as convenient safety valves. After the financial crisis of 2008 and 2009 this is exactly what happened on a scale never ever witnessed before.

  However, in the period leading up to the great financial crisis foreigners bloated on credit were more than happy to indulge themselves with cheap Chinese goods. The Chinese on their side had to adjust their monetary policy to subsidies exports and penalize imports through a low valued Yuan.  In order to do so the PBoC were forced to buy billions of dollars and other FX flowing into mainland China. Despite raising banks’ reserve requirements, printing up RMBs at this pace led to a massive inflationary boom in the Chinese economy. In other words, the Chinese monetary policy was extremely pro-cyclical as they essentially were forced to copy the folly conducted in the Eccles building.

  But as everyone loves the effects of inflation and the false prosperity that spreads throughout society, no one complain whilst the good time lasts. When the imbalances become too great to hide though, it all turns ugly quite quickly. The inflation correspondent with capital inflows must necessarily become deflationary when money starts to flow out. As domestic bubbles start to deflate and economic prospects turn sour, capital will flow out and the whole process reverses. Downward pressure on the exchange rate forces the PBoC to buy back legacy Yuan’s by selling FX reserves. At this stage reserve requirements are lowered in order to free up more Yuan by leveraging banks’ balance sheets, but as the inflationary boom could not be fully mitigated on the way up, the deflationary forces on the way down are impossible to control.

  

  The blue and red circles are represented with the same color code in the Yuan chart below. In the blue area the exchange rate is kept stable despite inward capital flow as the PBoC sells Yuan to buy dollars. In the red area the Yuan is falling against the dollar and the PBoC is forced to buy back Yuans with previously accumulated dollars. Since liquidity is withdrawn domestically a falling exchange rate is associated with internal deflation.

  

  We can see the abovementioned process in bank reserve requirements and FX reserves. Reserve requirements, in blue below, are lifted as FX reserves increases and in red we see the reverse process as reserve requirements are lowered alongside falling FX reserves.  These are coordinated in order to mitigate negative effects from changes in the domestic money supply.

  

  The problem for PBoC is that their task is impossible to pull off. The enormous amount of waste embedded in the system as a result of years of inflationary policies has left the Chinese economy riddled with bad debt and probably trillions in non-performing loans. Consequently, investors believe further exchange rate depreciation will be needed and the offshore (CNH) forward market price in the typical Chinese approach of incremental change. As long as FX reserves are plentiful, complacency will be the name of the game, but that will leave a lot of people exposed to a rude awakening.

  

  With the PBoC fighting to defend the Yuan they will certainly create trouble in domestic money markets. Draining banks for Yuans as dollars flow abroad; in times when debt-funded boondoggles must roll-over credit lines is a recipe for financial crisis. Banks will be forced to scale back, the infamous Chinese shadow system is under regulatory attack and in any case, debt funding costs will be more expensive for the thousands upon thousands of companies with restricted cash-flows.

  

  

  In conclusion, the Chinese miracle is built on a pile of debt with only an unconstrained printing press to support it.  As use of the printing press now is heavily restricted, the balancing act of supporting the Yuan and supplying enough money to local markets, will be nigh on impossible. Some argue that there will not be a funding crisis in China, simply because the PBoC can always fund a highly centralized credit system. The problem with this line of thinking is that the exchange rate target will have to be abandoned if they do. Either there will be large scale devaluation or alternatively a domestic financial crisis.

  All this does not necessarily mean a Lehman-moment, where everything crashes overnight, but rather a “managed” transition whereby further credit creation is hamstrung by the lack of real capital funding available. In short, China will evolve more like Japan, with something close to zero growth for years, if not decades, as the legacy of credit fuelled “growth” is never properly dealt with.

  The question of whether to let the exchange rate or the banking system take the hit seems to be a question up for debate, even among the red kings in Beijing. Late 2014 it seemed like they wanted the domestic banking system, and hence “growth” adjust. The PBoC decided to put the brakes on and slow the economy down. Commodity prices collapsed as the China Miracle probably grinded to a halt. The fantasy GDP numbers obviously did not reflect an economy at a standstill, but neither money flows nor commodity prices do lie in that regard. Inclusion into the SDR basket was probably so important that they were willing to sacrifice short-term growth.

  However, from mid-2016 it seems Beijing panicked and with the SDR inclusion secured, the PBoC seem hell-bent on stimulating the economy again. As they crank up the printing press once more, further Yuan depreciation will be the way forward. That being said, internal inconsistencies have grown so large that the printing press might not do much good meaning they will end up with a weaker Yuan and no ultimately no growth.

  

  

  

• Julian Assange Talks To Sean Hannity: "Big Powerful Actors Want Revenge" – Full Fox News Interview

  As previewed yesterday, today at 10pm ET, WikiLeaks’ Julian Assange would be interviewed by Fox News’ Sean Hannity, in a wide ranging discussion touching most notably on whether or not Russia provided WikiLeaks the hacked Democratic emails – as pointed out yesterday, the answer was a “1000%” no.

  For those who are unable, or unwilling to watch, Fox, here is a link to the full interview which will take place over the next hour, until 11pm ET.

  Assange’s concluding remarks were uncharacteristically emotional:

  “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.”

  Full Interview below (starting at 49:08…)
  

  

  

• China Warns May Dump Treasuries To Keep Yuan Stable, Prepares More Capital Controls

  In China, announcing new (and ever more ineffective) capital controls has become a daily thing.

  Last week, Beijing unveiled its latest set of capital controls according to which Chinese banks would be required to report all yuan-denominated cash transactions exceeding 50,000 yuan (around 7,100 US dollars) to the People’s Bank of China (PBOC), down from the current level of 200,000 yuan. Cross-border transfers more than 200,000 yuan by individuals would also be subject to the report process.

  Then, overnight, China’s currency regulator, the State Administration of Foreign Exchange (SAFE) added its own round of capital control limitations, when it announced it wanted to close loopholes exploited for purposes such as money laundering and illegally channeling money into overseas property. As a result, while the regulator kept existing quotas of $50,000 of foreign currency per person a year, citizens faced draconian new currency exchange disclosure requirements, requiring foreign currency buyers to indicate how they plan to use the money and when they plan to spend it. Additionally, mainlanders would be restricted from using the FX proceeds to buy overseas property, securities, life insurance or other investment-style insurance products. In fact, among the list of approved uses of funds are tourism, schooling, business travel and medical care. Which means any offshore asset purchases have been effectively limited.

  What made the above capital controls especially amusing is that as Xinhua reported over the weekend, “the policy stoked worries that the government is trying to impose capital control in a disguised form.” And since the official admission of capital controls would only lead to even more panicked outflows, PBOC economist Ma Jun intervened, saying that the new cash transaction rules, i.e. capital controls, are “not capital control at all.”

  We leave it up to readers to decide what that means.

  Then, fast forward two days when China, no longer bothering with euphemisms, admitted that it has “studied possible scenarios of yuan exchange rate and capital outflows in 2017 based on models, stress tests and field research, and is preparing contingency plans”, Bloomberg reported citing people familiar with the matter.

  Among the “contingency plans” are proposals recently suggested by such banana countries as Turkey and Venezuela, which include China’s government  asking state-owned enterprises to temporarily convert some foreign-currency holdings into yuan, said Bloomberg’s sources, who are clearly mostly interested in the market’s response to this particular Bloomberg-mediated trial balloon

  Bloomberg adds that financial regulators have already encouraged some SOEs to sell FX under current account.

  But most troubling is the admission that “China may further cut U.S. Treasury holdings in 2017 if needed to keep exchange rate stable; size of reduction depends on capital outflows and FX market intervention,” or in other words, the worst-case scenario which so many serious “economists” have said can not conceivably happen.

  Well, China is now actively considering it, which means that should the Yuan continues to slide, Beijing is close to implementing it.

  Not unexpectedly, as a result of this latest daily escalation in China’s capital controls, the offshore Yuan is now surging, and is back under 6.95, up nearly 200 pips on the session so far.

  

  

• It's Not Just The Russians: Ex-CIA Chief Claims "More Than One Country Involved" In US Hacks

  Following Trump's earlier Tweet, the following from current House intelligence chair and a former CIA chief seem very notable…

  "I think the possibility that there’s more than one country involved is really there," warned former CIA Director James Woolsey during a recent CNN interview, suggesting that political hacks in the U.S. could be the work of more than one foreign country.

   

  Former CIA director James Woolsey: Possibility that more than one country is involved in hacking is there. https://t.co/cxZqeyNvOI

  — New Day (@NewDay) January 3, 2017

   

  As The Hill reports, Woolsey, who endorsed President-elect Donald Trump, said:

  "I don’t think people ought to say they know for sure there’s only one. I don’t think they’re likely to be proven correct. It shouldn’t be portrayed as one guilty party,"

   

  “It’s much more complicated than that. This is not an organized operation that is hacking into a target. It’s more like a bunch of jackals at the carcass of an antelope.”

   

  Woolsey suggested China and Iran could be behind cyber breaches in the U.S.

   

  “Is it Russian? Probably some,” he said. "Is it Chinese and Iranian? Maybe. We may find out more from Mr. Trump coming up today.”

  This follows Trump's comments on Sunday hinting he would reveal new information about alleged Russian hacking during a New Year’s Eve celebration at his Mar-a-Lago resort in Palm Beach, Fla.

  “[I know] things that other people don’t know,” he said. "I just want them to be sure because it’s a pretty serious charge. I think it’s unfair if they don’t know.”

  Additionally, House Intelligence chairman Devin Nunes (R-Calif.) says there is no evidence Russia assisted President-elect Donald Trump in winning the White House. (via The Hill)

  "There’s no proof that we have from intelligence sources that I’ve seen that show that the Russians were directly trying to help Trump,” he said in a Washington Examiner interview published Tuesday.

   

  

   

  “We have been screaming here in the House of Representatives for many years that the Russians, Chinese, Iranians, North Koreans and other bad actors, every day, were attacking every imaginable place that you could think of, whether it be political parties, to the United States Congress, to the Department of Defense, to our intelligence agencies, to our financial institutions,” he said.

   

  “Specifically, I’ve always said Russia was the most sophisticated actor in this arena,” Nunes added. "This is something that [Democratic presidential nominee] Hillary Clinton knew damn well when she got her private server, that the Russians could have the capability to get in there.”

   

  “I know, every day, that the Russians likely have the capability to try to listen to my phone calls or read my emails and I just have to make the assumption that they do – or the Chinese or other bad actors.”

  Trump has vehemently denied Russia helped him win the White House, and incoming White House press secretary Sean Spicer on Monday said “zero evidence” exists for Moscow’s interference.

  

  

• Trump Reveals "Very Strange" Delay In Russian Intelligence Briefing

  The tweet storm continues into the night as President-elect Trump reveals that the intelligence briefing he is supposed to receive on the alleged Russian hacking has now been delayed until Friday…

  The “Intelligence” briefing on so-called “Russian hacking” was delayed until Friday, perhaps more time needed to build a case. Very strange!

  — Donald J. Trump (@realDonaldTrump) January 4, 2017

  A few things jump out immediately:

  First, we are sure opposition members will feel the need to comment on Trump’s revelation on the timing of the briefing (was it confidential?);

   

  Second, the use of quotes around “intelligence” is a not so subtle stab at the current agencies (all 17 of them);

   

  Third, calling the hacking “so-called” makes it clear Trump remains unconvinced, and that is reinforced by the comment that they need more time to build the case; and

   

  Fourth, describing the delay as “very strange” seesm to strongly implies ‘CIA plot’.

  We await the ‘shock’ from The White House at Trump’s tweet.

   

  

  

• Luxury Apartment Bust Spreads To Main Street

  For months we’ve warned about the impending collapse of the luxury real estate markets in New York and San Francisco amid tepid demand and a supply glut that is getting ready to flood the market with new capacity (see here, here and here).  Of course, one of the first signs of excess capacity comes in the form of rent concessions, which as we pointed out over the summer, have been relatively easy to find in the large metro markets.

  “Listings that once rented in just two to three weeks can now take two to three months to rent,” explains Paul Hwang, principal broker at Skybox Realty, a San Francisco-based real estate agency.

   

  At least four new apartment buildings have opened within a three-block radius of one another during the last 18 months in San Francisco’s thriving South of Market neighborhood, which is home to major tech companies like Airbnb, Pinterest and Yelp (YELP).

   

  Those four buildings — Jasper, 340 Fremont, 399 Fremont and Solaire — frequently offer some sort of bargain for prospective renters. 340 Fremont is offering six weeks of free rent; Solaire is pitching four weeks of free rent, free on-site storage and $1,000 discounts to renters who work at tech companies like Apple (AAPL), Facebook (FB) and Yahoo (YHOO). Meanwhile, another building, 399 Fremont, even tried giving away free bikes one weekend.

  But new buildings weren’t the only ones offering incentives.  Craigslist was also flooded with listings like the one below offering free rent and a $500 gift card to interested renters.

  

   

  Unfortunately, as the Wall Street Journal points out, NYC and San Francisco aren’t the only cities across the country that are about to get flooded with new luxury apartments.  In 2017 alone, 378,000 new apartments are expected to be completed across the country, or roughly 35% more than the 20-year average. 

  Developers in New York are already offering up to three months of free rent on some projects. In Los Angeles, some landlords are offering six months of free parking, and some in Houston are waiving security deposits. Meanwhile, MPF Vice President Jay Parsons said he expects little or no rent growth in urban rental markets this year.

   

  “This will be a very challenged leasing environment almost everywhere,” Mr. Parsons said.

   

  The slowdown, he said, is being driven not by a pullback in demand but rather a flood of new apartments. Demand for urban properties jumped after the housing bust as young, high-earning professionals eschewed homeownership and flocked to big cities. Developers responded by focusing most of their efforts on high-end properties.

   

  Now, though, the number of upscale apartments coming onto the market appear to be outpacing the number of renters able to move into them: More than 50,000 new units were rented by tenants in the fourth quarter in the U.S., six times the number in the year-earlier period. But that demand was overwhelmed by the 88,000 new units that were completed in the quarter, the most since the mid-1980s, according to MPF.

   

  That gap looks set to widen in 2017. More than 378,000 new apartments are expected to be completed across the country this year, almost 35% more than the 20-year average, according to real estate tracker Axiometrics Inc.

  And smaller cities like Dallas, Atlanta and Nashville are expecting some of the largest supply gluts.

  The sluggishness is expected to spread across the U.S., hitting markets from Nashville, Tenn., and Dallas to Los Angeles and Atlanta.

   

  Dallas is expected to see nearly 25,000 new apartments delivered, compared with the long-term average of roughly 9,000 new apartments a year, according to Axiometrics. Los Angeles is expected to get roughly 13,000 new apartments, nearly double the historical average.

   

  Nashville could see some 8,500 new apartments, more than triple the typical 2,400 apartments completed annually.

   

  John Tirrill, managing partner at SWH Partners, an Atlanta developer that has several projects under way in the Nashville area, is leasing a new five-story property with a fitness center, yoga and barre studio and swimming pool. He has lowered rents from $2.25 a square foot to $2.10 a square foot—a $150 discount on a 1,000-square-foot apartment—and is offering one to two months of free rent.

  

   

  Meanwhile, as Wolf Street notes, rent concessions have become fairly pervasive across the country.

  

   

  And, banks are starting to get just a little worried that they financed a few too many luxury skyscrapers.

  Banks are pulling back on lending, which could help slow the pace of construction starting in late 2018.

   

  “We’re just being really selective,” said John Cannon, a senior vice president at Pinnacle Financial Partners, a Nashville-based financial-services company that has increased its focus on multifamily lending in the last couple of years. “Multifamily has a large number of units on the ground that they really have to demonstrate some absorption.”

  We vaguely recall seeing the single-family version of this movie a few years ago…

  

  

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• Chinese Interbank Lending Freezes; Government Bond Trading Halted After Massive PBOC Liquidity Drain

  Earlier today, we were surprised to note that having aggressively drained liquidity from the interbank funding market, on the first trading day of 2017, the PBOC not only fixed the Yuan well lower (sy 6.9498 vs 6.9370 on the last day of 2016, even if this was well stronger than the Offshore Yuan), but the People’s Bank of China withdrew even more liquidity. It did that by injecting CNY20 billion via 7-day reverse repos and another CNY20 billion via 14-day reverse repos in its open-market operations Tuesday, according to traders, while continuing to skip 28-day reverse repos.

  The move resulted in a net drain of CNY155 billion for the day, and followed a substantial drain of a net CNY245 billion last week – the first removal of liquidity in three weeks. We promptly followed up with a warning:

  PBOC drains a net CNY155 billion for the day. Keep an eye on overnight SHIBOR/ HIBOR/ Repo

  — zerohedge (@zerohedge) January 3, 2017

  Just over an hour later, it appears our warning was warranted, because according to the latest daily fixing of the Treasury Market Association, as a result of the PBOC’s massive liquidity drain which soaked up a nearly a third of a trillion Yuan in the past two weeks, the interbank market is freezing again as follows:

  • 1-month yuan interbank rate in Hong Kong rises 1.16ppts to 13.01%,
  • 3-month CNH Hibor +89bps to 10.02%;

  

  Most importantly, the overnight CNH Hibor rate soared 4.95% to 17.76%, the highest since September, andconfirming of yet another daily freeze in interbank lending simply so that the PBOC can punish all those who are still short the Yuan. 

  

  The good news: at least the UCDCNH tumbled by as much as 200 pips on the session. The bad news, it is unclear how much more of this daily volatile punishment Chinese and Hong Kong banks can take.

  But wait, because the interbank freeze was not all, and in a repeat of two weeks ago when China’s halted the trading of its government bond future, the Shanghai Stock Exchange announced that Shanghai halted trading of the 3.99% government bond due May 2065 after “abnormal fluctuations.”  It was not exactly clear what that particular phrase meant aside from “aggressive selling” as per the chart below.

  

  According to a statement, trading was set to resume at 11:06 am after being halted at 10:36am, but not before the exchange called on investors to “remain rational and reminded them of trading risks.” In other words, please don’t sell, especially when the central bank just yanked a near record amount of liquidity from the market.

  

  

• Why Donald Trump Is Spot-On About The Russians And The Election

  Submitted by John Reed Stark via LinkedIn.com,

  President-elect Donald Trump has recently questioned: 1) President Obama's finger pointing at the Russians for election-related cyberattacks; and 2) the current media and pundit frenzy alleging a Russian cyber-strike targeting Secretary Hillary Clinton in order to assure a Trump presidency. President-elect Trump plans to press U.S. intelligence agencies to defend their conclusions, stating,

  “I know a lot about hacking. And hacking is a very hard thing to prove. So it could be somebody else. And I also know things that other people don’t know, and so they cannot be sure of the situation.”

  Having worked since 1995 as a first-responder to cyber-attacks, including serving 11 years as Chief of the SEC's Office of Internet Enforcement, I whole-heartedly agree with President-elect Trump. His skepticism is not only appropriate and warranted — it's spot-on.

  Official U.S. Statements About Russian Hacking of U.S. Election

  Despite countless inflammatory headlines about Russian election hacking, there exist only two official U.S. statements specifically addressing the facts of recent election-related hacking incidents. The first is the October 7, 2016 Joint Statement from the Department of Homeland Security and Office of the Director of National Intelligence on Election Security (the "Joint Statement"). The second is the December 29, 2016 Joint Analysis Report of the Department of Homeland Security and the Federal Bureau of Investigation, entitled, "GRIZZLY STEPPE – Russian Malicious Cyber Activity" (the "JAR").

  Both government statements are curt, vague, opaque and miles away from being concrete — and both also beg far more questions than answers.

  The Joint Statement

  The Joint Statement adopts a cautionary approach to any sort of attribution or motive behind who "directed the recent compromises of e-mails from U.S. persons and institutions, including from US political organizations." The Joint Statement states that the hacks:

  “. . . are consistent with the methods and motivations of Russian-directed efforts. These thefts and disclosures are intended to interfere with the US election process. Such activity is not new to Moscow — the Russians have used similar tactics and techniques across Europe and Eurasia, for example, to influence public opinion there. We believe, based on the scope and sensitivity of these efforts, that only Russia’s senior-most officials could have authorized these activities.” 

  Announcing that we think the hacks “are consistent with the methods and motivations of Russian-directed efforts” falls far short of a legitimate prosecutorial conclusion based upon actual evidence of Russian culpability and attribution. The Joint Statement's authors are clearly hedging their bets, which is exactly what any reasonable cyber-investigator would do under the circumstances.

  After all, attributing disparate attack vectors to the same culprit is always speculative. The entire virtual criminal design could all be a ruse, where one country’s cyber gang coopts the techniques of another country’s cyber gang, to confuse or disassemble.

  Moreover, even in its most favorable light, the Joint Statement does not support the conclusion that the Russians were trying to help Trump and hurt Hillary — as opposed to just doing what most hackers do i.e. rummaging voraciously and randomly through whatever data they can access, and leaving it to their patrons to determine what is, and is not, of use. 

  Interfering with the election process is only one of many possible motives behind cyber-attacks. Financial crime, insider trading, intellectual property thievery, trade secret pilfering, extortion, ransomware, governmental disruption, market manipulation (just to name a few) are all potential goals at the outset of a hack.

  Cyber-attackers invade systems and networks, frantically grab every data-file they can and then continue mounting their virtual crime sprees wherever that stolen data may lead them — disrupting organizations, causing damage and wreaking havoc all along the way. Make no mistake — the 21st Century hacker's mantra is to shoot first and ask questions later.

  The JAR

  Though more than half of the JAR is just a list of suggested preventive cybersecurity measures, the JAR is still an important report and a critical resource for any analysis of the Russian election rigging allegations — both for what it does say and for what it doesn't say. Here is a play-by-play of its deconstruction:

  1. Attribution. The JAR is the first official government statement attributing certain politically-related malicious cyber activity to specific countries or threat actors, specifically, "to Russian government and civilian intelligent agencies."
  2. The DNC Cyber-Attacks. The cyber-attacks upon the Democratic National Committee ("DNC") apparently began with a 2015 cyber-attack upon the U.S. government. This is typical of cyber-attacks — where the sole goal/motive is data exfiltration, leaving it until afterwards to determine how to take advantage of, or profit from, that exfiltrated data. Specifically, the JAR notes that in the summer of 2015, what looks like a Russian spear-phishing campaign targeting over 1,000 recipients, including U.S. government employees. Apparently, at least a few of these spear-phishing attacks hit pay dirt and in the course of that campaign, somehow "successfully compromised a "U.S. Political Party." (The JAR does not identify the "Political Party" to be the DNC.)
  3. Multiple Attacks Continue." The JAR describes a second attack upon the same "U.S. Political Party," which occurred in the Spring of 2015 and states that, "Actors likely associated with [Russia] are continuing to engage in spear-phishing campaigns, including one launched as recently as November 2016, just days after the U.S. election."
  4. APT Attacks. The JAR acknowledges the lengthy history of state-sponsored Advanced Persistent Threat or so-called APT attacks against every type of U.S. entity, including a range of foreign governments initiating "spear-phishing campaigns targeting government organizations, critical infrastructure entities, think tanks, universities, political organizations, and corporations." Given certain common indicators of compromise identified by the DHS and FBI, the JAR concludes that the perpetrators of the hacks upon the "U.S. Political Party" employed the same modus operandi used by purported Russian groups that have "historically targeted government organizations, think tanks, universities, and corporations around the world."
  5. The Leaks of Exfiltrated Emails and Other Data. The JAR ambiguously and blithely states that, "The U.S. Government assesses that information was leaked to the press and publicly disclosed." The JAR (whether clumsily or intentionally) employs the passive voice to describe the leak — and does not state who leaked the information; how the information was leaked; or any other inculpatory details.
  6. The Podesta Emails. The JAR does not address or infer that the attacks upon the "U.S. Political Party" were perpetrated by the same attackers who somehow obtained the emails of Clinton campaign head John Podesta. In fact, the JAR makes no specific mention of the Podesta hacks.
  7. Trump Over Clinton. Like the Joint Statement, the JAR provides no evidence and makes no mention of any plot, effort or other scheme to steal the election from Hillary Clinton and favor Donald Trump. Rather, the JAR cites only the usual over-arching objective behind most state-sponsored APT attacks i.e. to disrupt and/or damage U.S. institutions and organizations.

  Cybersecurity Experts Disagree (Often)

  Like medical experts who disagree about a diagnosis or treatment, Cybersecurity experts are notorious for disagreeing about attribution conclusions gleaned from digital forensic remnants, residue, fragments and artifacts.

  For instance, the firm investigating the DNC cyber-attacks, CrowdStrike, a highly reputable and well-respected data breach response firm, believes that "Fancy Bear," a hacking group with purported ties to the Russian government, likely orchestrated the DNC hack — and therefore the DNC hack was orchestrated by the Russians.

  Like most digital forensic experts, CrowdStrike seems to have based its conclusions upon technological correlations and shared modus operandi of hacker techniques, a common investigative method employed by digital forensic investigators to identify online intruders. Along those lines, on December 22, 2017, the Washington Post reported that:

  The firm CrowdStrike linked malware used in the DNC intrusion to malware used to hack and track an Android phone app used by the Ukrainian army in its battle against pro-Russia separatists in eastern Ukraine from late 2014 through 2016.

  CrowdStrike found that a variant of the Fancy Bear malware that was used to penetrate the DNC’s network in April 2016 was also used to hack an Android app developed by the Ukrainian army to help artillery troops more efficiently train their antiquated howitzers on targets.

  The Washington Post reports further details about Fancy Bear:

  While CrowdStrike, which was hired by the DNC to investigate the intrusions and whose findings are described in a new report, had always suspected that one of the two hacker groups that struck the DNC was the GRU, Russia’s military intelligence agency, it had only medium confidence. Now, said CrowdStrike co-founder Dmitri Alperovitch, “we have high confidence” it was a unit of the GRU. CrowdStrike had dubbed that unit “Fancy Bear.”

  However, other cybersecurity experts would disagree with CrowdStrike. Security researcher Jeffrey Carr recently pointed out that a 2014 FireEye report on Fancy Bear, which links Fancy Bear to the Russian government, has significant credibility issues:

  'To my surprise, the report’s authors declared that they deliberately excluded evidence that didn’t support their judgment that the Russian government was responsible for [Fancy Bear’s] activities:

  '[Fancy Bear] has targeted a variety of organizations that fall outside of the three themes we highlighted above. However, we are not profiling all of [Fancy Bear’s] targets with the same detail because they are not particularly indicative of a specific sponsor’s interests.” (emphasis added)

  That is the very definition of confirmation bias. Had FireEye published a detailed picture of Fancy Bear’s activities including all of their known targets, other theories regarding this group could have emerged; for example, that the malware developers and the operators of that malware were not the same or even necessarily affiliated.

  The notion that [Fancy Bear] has a narrow focus on U.S. political targets is also undermined in a SecureWorks research paper, which shows that the [Fancy Bear] hackers have a wide variety of interests: 10 percent of their targets are nongovernment organizations, 22 percent are journalists, 4 percent are aerospace researchers, and 8 percent are within the “government's supply chain.” SecureWorks concludes that only 8 percent of Fancy Bear’s targets are “government personnel” of any nationality.

  According to Carr, “it’s an old assumption going back years to when any attack against a non-financial target was attributed to a state actor.” Without that premise, the only logical conclusion is that some email accounts at the DNC appear to have been broken into by someone, and perhaps they speak Russian. Left ignored is the mammoth difference between Russians and Russia.

  Some experts even go so far as to pit themselves directly against the JAR. Take famed data security pioneer John McAfee, the developer of the first commercial antivirus program. McAfee has been a major player in the cybersecurity industry for the past 50 years and does not believe that the Russians were behind the hacks on the DNC, John Podesta’s emails and the Hillary Clinton presidential campaign.

  McAfee notes that the JAR contains an appendix that lists hundreds of IP addresses that were supposedly “used by Russian civilian and military intelligence services,” but notes that,

  "While some of those IP addresses are from Russia, the majority are from all over the world, which means that the hackers constantly faked their location . . . if it looks like the Russians did it, then I can guarantee you it was not the Russians . . . [The JAR] is a fallacy . . . hackers can fake their location, their language, and any markers that could lead back to them. Any hacker who had the skills to hack into the DNC would also be able to hide their tracks . . ."

  The entire election hacking activities could also be some sort of "false flag" operation by someone else with extremely deep pockets and a political agenda. Along these lines, McAfee derides recent investigative techniques behind conclusions of Russian attribution, stating:

  "If I was the Chinese and I wanted to make it look like the Russians did it, I would use Russian language within the code, I would use Russian techniques of breaking into the organization . . . in the end, there simply is no way to assign a source for any attack.”

  Meanwhile, WikiLeaks' founder Julian Assange has insisted that the Russian government is not the source of the Podesta and DNC e-mails, implying that the source is instead a disgruntled DNC or other Democratic operative. 

  Fancy Bear, What will You Wear

  What does the public know for certain about Fancy Bear, or any of its other dozen names assigned by researchers such as APT 28, Tsar Team, Sofacy, Strontium and Pawn Storm? Not much.

  Despite being one of the most reported-on groups of active hackers, there is very little any researcher can say with absolute certainty about Fancy Bear. No one knows, for instance, how many hackers are working regularly within Fancy Bear, or how they organize their hacking squads. No one even knows if Fancy Bear is based in one city or scattered in various locations across Russia or the world. They don’t even know what they call themselves.

  No confirmed Fancy Bear hacker has ever actually gotten caught. Fancy Bear has evolved into a modern-day bogeyman — powerful and ubiquitous, nowhere and everywhere.

  A Quick Review of Reported Digital Forensic Evidence (in Plain English)

  Some of the cited circumstantial digital evidence relating to the DNC hacks while important and useful, also raises some fairly obvious caveats and questions, including:

  • The attacker or attackers registered a deliberately misspelled domain name used for email phishing attacks against DNC employees, connected to an IP address associated with Fancy Bear. (But aren't misspelled domains a cornerstone of phishing attacks all over the world?);
  • The actual clock times of the phishing schemes correlated with "business hours" in Russia and St. Petersburg time zones. (But couldn't Russian hackers just as easily orchestrate their schemes from a different time zone or digitally forge time-stamps? Also, don't hackers notoriously work at all hours of the day and night from any location they prefer?);
  • Malware found on the DNC computers was programmed to communicate with an IP address associated with Fancy Bear. (But would a sophisticated state sponsor of cyber-attacks be so incompetent as to use an IP address tracing back to their homeland?);
  • The DCLeaks.com domain was registered by a person using the same email service as the person who registered a misspelled domain used to send phishing emails to DNC employees. (But are the poor spelling habits of foreign spies truly evidence of their culpability and motive?);
  • Based on some sort of linguistic analysis, experts believe that Guccifer 2.0, the purported Romanian hacker who loudly and boldly claimed responsibility for the DNC hacks, was actually a Russian agent, posing as a Romanian in order to cover up Russian's own hack and spread disinformation. (But other experts disagree, including M.J. Connolly, a professor of Slavic and Eastern European linguistics at Boston College, who says that many of Guccifer 2.0’s language traits are not Russian and that Guccifer 2.0 was more likely Moldovan. Whatever the origins of Guccifer 2.0, isn't this evidence better suited for a Robert Ludlum spy novel or bad episode of The Americans, rather than a bona-fide government intelligence conclusion?)
  • The code in malware and tools of the DNC hacks appears to have been regularly and professionally updated and maintained while utilizing a sophisticated platform, suggesting a Russian operation funded to provide long-term data espionage and information warfare capabilities. (But isn't it common practice for hacking coders to update their software and tool kits as defenses change i.e. isn't that a prerequisite for all kinds of successful hacking?)
  • Metadata in a file leaked by “Guccifer 2.0″ shows it was modified by a user called, “Felix Edmundovich,” a reference to the founder of a Soviet-era secret police force. Another document contained Cyrillic metadata indicating it had been edited on a document with Russian language settings. (But is this how a sophisticated government spy ring behaves — sloppily leaving behind blatant, inculpatory evidence in plain view?);
  • Spear-phishing, the original hacking method used against the DNC, is the same method Fancy Bear uses to initiate its hacking operations. (But spear-phishing is used in some form by just about every hacking group, because it is proven to be the most effective way to inject malware on to a network in order to obtain command and control capabilities.)
  • Some of the phishing emails were sent using Yandex, a Moscow-based webmail provider, which indicates Russian involvement. (But Yandex is the Russian equivalent of Google — is its use in the DNC hack truly that compelling?); and
  • A bit.ly link believed to have been used by Fancy Bear in the past was also used in the spear-phishing scheme that purportedly tricked John Podesta into giving up his Gmail password. (But does Fancy Bear own some sort of criminal patent on their malware, so other hackers cannot ever use their tools and techniques?)

  Final Thoughts

  It is now widely accepted that despite government claims to the contrary: 1) Saddam Hussein was never building weapons of mass destruction (as initially asserted by the Bush Administration); and 2) the Benghazi embassy attack was not because of a YouTube video (as initially asserted by the Obama administration). Whether based upon sophisticated guesswork, concrete intelligence sources or a little of both, experts in each U.S. administration simply got it wrong.  

  Let's also not be naive. Recalibrating raw intelligence data for political purposes has always been tempting for Republicans and Democrats alike. Even if made entirely in good faith, political and ideological motives undoubtedly lurked in the shadows of the WMD and Benghazi intelligence findings.

  In the end, the Obama administration may be right about the Russians cyber-attack of election-related organizations. Russian-sponsored cyber-terrorism and data thievery is a major global problem — and has been for years. Indeed, legions of soldiers from countries across the globe, including Russian cyber-troops, wake up each morning with the sole objective to break into American computer systems and steal data.

  But for the time being, given the inherent subjectivity of intelligence regarding cyber-attacks and the differing interpretations of malware reverse engineering and other circumstantial digital evidence, a healthy dose of skepticism about Russian attribution still makes sense.

  As to whether the Russians somehow cyber-hijacked the election from Hillary Clinton to prop up Donald Trump — that is a completely different story. There is not a scintilla of official government evidence to support such an outrageous claim. It is a wholly unsubstantiated theory and my take is that mere skepticism is not enough. Flat out rejection may be in order.

  Under any circumstance, President-elect Donald Trump is quite right to engage in his own de novo review of government intelligence analytics regarding Russian hacking. It is what Americans expect every Commander-in-Chief to do before making major foreign policy decisions and escalating military tensions. In fact, President-elect Trump's approach is not only smart, courageous, logical and scientific — it is above all else, highly presidential.

  

  

• 2017 Stock Market Predictions: Trump Slump in January for Stocks

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

  

  I begin my 2017 stock market predictions with a recap of last year’s predictions. In an article back in 2015 titled “The Epocalypse: What Will D-Day Look Like?” I predicted the Fed would raise rates on December 16th, 2015, and the US stock market would crash immediately. Counterintuitively, I said it would crash by shooting upward for a few days; then it would round off, and then, in a short time, it would plunge off a cliff. (In all not a pattern you’d likely find anyone else predicting.)

  I said the stock market would crash by going up because everyone would look around after the long-dreaded day of the Fed’s first rate hike and see that the sky didn’t fall. That would turn them all smarmy and euphoric over how right they were about the recovery and about the bull market. That would, in turn, give rise to their hopes of a bull market forever and never ceasing. However, parties lead to hangovers. Once you recover from the hangover, reality sets in. That’s when they would begin to panic as they looked around, saw all the bottles and underwear and said, “Oh, my gosh, what did we do last night?”

   

  How my 2015/2016 stock market predictions did

   

  That is EXACTLY what happened (perhaps even including the underwear). January became the worst opening month in stock-market history. Now, to be fair, I also said that globally 2016 would turn into the “Year of the Epocalypse,” and it didn’t. (More on that in my next article of 2017 economic predictions, but you have to admit it was one darn weird year, which I think was only the warm-up act for this year.) However, as part of the economic apocalypse I predicted for 2016, I described the following blowup:

   

  Movement from bond funds to stocks will accelerate the bond implosion, wiping out billions in paper wealth on the high-yield bond side. Unfortunately for the market bulls, such mega-bond crashes almost always lead directly into stock-market crashes.

   

  The bond implosion took a lot longer to begin last year than I thought, but it finally got up to speed after Trump’s election, from which point it wiped out more than $13 billion from US bond funds (over $60 billion lost for the whole year) and surprising $1 trillion from all global bond markets (if CNBC’s numbers are right):

   

  ‘Trump Thump’ whacks bond market for $1 trillion loss

  Donald Trump’s stunning victory for the White House may mark the long-awaited end to the more than 30-year-old bull run in bonds…. A two-day thumping wiped out more than $1 trillion across global bond markets…. “We’ve had a sentiment shift in the bond market. People have already started reallocating out of bonds and into stocks, said Jeffrey Gundlach, chief executive officer of Los Angeles-based DoubleLine Capital, which has more than $106 billion in assets. (CNBC)

   

  As I predicted last year, 2016 would be the year when billions would flow out of US bond funds and into stocks because “the money needs somewhere soft to land.” As I mentioned a week or so ago, the Trump rally has less to do with enthusiasm over the Trump plan and more to do with near-panic in the bond market sending a lot of bond money into stocks.

  If this flight from bond funds does become an complete bursting of the bond bubble, that is ultimately going to hurt everything, including stocks; so it is not the salvation of the stock market, other than temporarily.

  Many were not certain the Fed would raise rates on December 16, 2015, but I was because the Fed would have lost too much public confidence if it did not. It had been telegraphing its first interest increase all year long plus half of the year before that. To not raise interest at all during 2015 would have been a disaster. By revealing the Fed had no faith in its recovery, it would have deflated the Fed’s whole hope balloon, filled with nothing but hot air anyway.

  It was easy for me to see the stock market would fall at the end of 2015 and into 2016 because the first interest-rate increase in years would change the sick dynamic in the market where bad news was good news because it always resulted in hope of more Fed free (or cheap-and-easy) money. With QE ended and interest rates starting to rise, bad news would finally start to become just bad news … and there was a lot more bad news in the pipeline than good.

  It was also easy to see that pent-up emotions would burst into euphoria once we made it past the long-dreaded day of the first increase, and it was easy to see there was no underlying strength in the economy and no new plan for the economy, so no reason for the stock market to rise, other than that euphoria. Thus, fall it did. No surprise here.

   

  My 2017 stock market predictions: The Trump slump

   

  This year is not as easy. Things are much more complicated now. Trumphoria has run even higher than last year’s “irrational exuberance” (as Greenspan termed it), but it comes with a new plan that is vastly different than all preceding years, which could give some serious temporary economic boost. (It doesn’t resolve ANY of our underlying economic problems, though, and it makes the biggest of those problems (national debt) far worse; but it has also too much mojo to be ignored.) It is an enormous tax plan, and an economic change like that always creates a lot of money movement. So, there will be many shells in this game moving in many directions, making it harder to see where the peanut ends up (if the peanut you’re trying to watch is 2017 stock market predictions).

  Partially due to the Trump plan, the Dow Jones Industrial Average saw one of its fastest rates of rise in history during the weeks that followed Trump’s victory at the polls. The victory was a great surprise to many, but I had been saying on my blog that, if anyone had closet voters that the pollsters couldn’t see, it would certainly be Trump; so, I wouldn’t be surprised by a Trump victory. I was, however, as surprised as anyone by the Trump stock-market rally. I hadn’t predicted the stock market would immediately crash after the election, but I certainly didn’t expect it to soar because I figured Fed support for the market would wane.

  Prior to the Fed’s rate increase this December, which everyone else was as certain of this year as I was, I predicted the opposite effect from last year’s first hike. I said the Federal Reserve’s interest increase would be irrelevant, and it was! The stock market paid little attention this time because bond interest had already been rising, and it didn’t rise any faster after the rate increase. Mortgage rates had already been rising, too. In short, the markets were already pushing interest up faster than anything the Fed is doing anyway.

  If anything, this indicates the Fed is losing its grip on interest rates as market forces overwhelm them. The Fed could, of course, re-establish that grip with another massive stimulus program, but that is something they are loath to do. They have no desire to show their recovery has failed by scrambling to save it. They have no interest in helping Trump who has only badmouthed them (deservedly). If their recover is going to fail, they’d probably rather it fails at the start of Trump’s watch to cast a hex over everything he does. Besides, the interest hikes they have wanted to make but couldn’t are now an easy rise for them, which is why they’ve comfortably slated extra increases this year because they are just pricing into what the market is already doing.

   

  How easily can euphoria give way to a 2017 stock market crash?

   

  In my recent article, “Irrational Exuberance in US Stock Market Grasps at 20K for Dow,” I described how the Trump rally looks like exactly the kind of euphoric rise that is typically seen before a major stock market crash — rapid rate of rise fueled by emotions (joy/relief among Trump supporters), premised only on speculative hopes (a Trump plan that faces numerous obstacles before becoming reality) while having no basis in economic improvements or corporate earnings, stocks already being at a very heady CAPE (Cyclicly Adjusted Price-Earnings) ratio, the economy statistically overdue for a recession, and the fact that the Dow, in particular, was grasping for an extremely high milestone of 20K. Like the irrational rallies just before major crashes in recent history, it also came with a huge increase in trading volume, meaning a lot more people were suddenly jumping in to trade. A record-setting rally in the face of all that has “irrational exuberance” written all over it.

  But the one thing that made the Trump rally fit the irrational exuberance that precedes a major stock market crash more than any other factor was the fact that almost no one was predicting this bull run would end. (At first; a few are now.) Consumer confidence hit an all-time high, too. So, optimism suddenly burst like fireworks everywhere but it’s all in the same old muddy economy. Nothing has actually changed yet. Obama is even still president.

  When the stock market soars with no evidence of fear, that’s when it is most vulnerable to a crash because markets only crash big when almost no one sees the crash coming. (If they saw it coming, they wouldn’t be running up the slope like lemmings in lock step.) The absence of fear creates surprise when the market turns, and surprise can easily become panic. It’s a manic-depressive kind of cycle.

  One other thing I pointed out in that article was that pushing up to or even through a major milestone along any index doesn’t mean anything bullish. Many times in history, the market has fainted as it neared a major milestone and settled back down, not to reach toward that milestone again for many years. When the market has passed a milestone, it has sometimes continued a month or two and then crashed. Sometimes it keeps climbing.

  So, the stock market could well faint away before it hits 20,000, not to return to such heights for years to come (as has happened many times), or it could gather up some more steam and push right past — making everyone think the bull is charging on — only to get dizzy in the new rarified atmosphere and fall dead away. Although there are many reasons laid out here for thinking the stock market will come down in January, I have only one reason for thinking it will. Ironically, that is Trump’s own plan, which caused it to soar in the first place.

  If there is one thing that holds true for rapid rallies, it’s the huge desire to sell the top and realize some profit from the easy-money gains of recent weeks. The market has clearly rounded off from its rise and even slipped downward like a roller coaster cresting the first big hill. So, there is a hint that investors are about to do some profit taking, but a hint in the form of the market catching its breath doesn’t bear a conclusion by itself, especially this time of year. The market always tends to cool from Christmas week through the New Year as people disengage and go spend time with families and on vacations. Tomorrow the investors get back to “work.”

  And tomorrow (Tuesday, January 3, 2017) means everything. One very important thing changes for the market on Tuesday morning: We enter the trading year in which Donald Trump promises a maximum capital-gains tax cut on short-term investments. (Taxes on assets like stocks held less than a year.) That’s the kind of holdings a big speculative trader is going to have. If you were a big speculative trader who benefited hugely from buying stocks during the Trump rally, would you sell some of your stocks in late December to pocket the profit, or would you wait a few days so that you could realize an instant and rather substantial tax savings, too? I don’t think I need to answer that for you.

  So, ironically Trump’s infrastructure spending plan caused the rally before the plan has even been presented to congress, but Trump’s tax plan could be the rally’s undoing before that plan is sent to congress.

   

  Other factors that could let the hot air out of the Trump stock market rally

   

  • Any benefit from infrastructure spending is far down the road because of how long it takes to plan and approve projects.
  • Trump and his cabinet members have already started backing away from the infrastructure stimulus plan, saying it will not happen until the end of his term. It is not their top priority.
  • We already saw Obama’s “shovel-ready” plan fail to gain any enthusiasm among municipalities, counties and states and the federal government, so it failed.
  • It’s time to get real. You can promise anything, but then there is congress. Trump has lined up a solid wall of enemies among the Democrats, but he also faces many Republican defectors who openly stated they would not only vote with the Dems in the election but would vote for one of the worst Democratic candidates ever fielded, rather than vote for Trump. Do you think these Pubs would be so brazen about voting with the Dems for Hillary and then hesitate to side with them on the house or senate floors? Getting a majority may be hard for Trump may be hard, and he doesn’t have a solid mandate because he lost the popular vote by a large amount.
  • In the very least, the reality that gets approved in congress is always a compromise from the promise.
  • The plan is so big, were it to happen, it would drive up the cost of its own financing like a forest fire creates its own wind. That means it will drive up the cost of the entire existing national debt, which has to be regularly refinanced. And that means the real cost in interest for the government will be astronomical because of what the federal government will have to pay on the entire debt, not just on the plan
  • President Obama’s scorched-earth policies seem intent upon creating as much global chaos as he can before Trump takes over.

   

  Will the stock market crash in 2017?

   

  That it will slump in January, I’m fairly sure — not certain but fairly sure. I am not certain that will be an immediate plunge on Tuesday, but I think profit taking and numerous other concerns will take over before the inauguration.

  As I say, Obama is doing so many chaotic things right now that he looks like he’s losing his mind in a temper tantrum. Protests may become riots leading up to and especially during the inauguration as desperate people continue to do everything they can to thwart Trump’s election. The entire world is descending into chaos due to outlandish immigration polices, old wars and new wars and, in the US, due to rage over Trump’s victory. All of these things will make the market uneasy as they grow in intensity, which they appear likely to do.

  Trump, on the other hand, has promised massive tax changes, which will certainly move money all over the place, particularly back into the US. A lot of that may go into stocks, especially repatriated corporate savings and anticipated corporate income-tax savings. (Where there are people selling to take profits there have to be buyers, so selling doesn’t necessarily drive the price of stocks down; if there are enough new buyers jumping in to take up the offerings.)

  All this movement of money will increase the velocity of money in many directions and should heat up the economy as intended, but increasing the velocity of trillions of fiat dollars that have been parked in stocks and bonds for years is a kind of event we’ve never seen. Some say it will create huge inflation as it moves that money into the Main-Street economy. On the other hand, the wipe out of stocks and bonds if the bond market crashes first could evaporate so much fiat money back out of the monetary system that we see hyper deflation.

  So, I think a stock market slump at the start of the year is fairly sure because some profit taking is bound to happen, and many investors are likely to take pause with so much happening to wait and see how Trump’s plans start to shape up in congress before running things up any higher. This market may slouch toward its fall. A 2017 stock market crash (maybe at the start of the year but probably not) seems likely because the stock market enters 2017 looking like a jinga puzzle balancing on one stick at the bottom of the stack; but Trump is also standing over it like a levitating magician with invisible strings of hope descending from his fingers to hold the pieces up; and a lot of other falling things like bonds may choose stocks as their last resort.

  So, I have no idea how so many major countervailing forces will play out in the short term; i.e., which will hit first or hardest. What I am sure of is one very chaotic year that makes 2016 look like an opening act because the forces that oppose Trump are not going to retreat, and similar anti-establishment forces in other countries aren’t going to either. In the US, the forces opposed to Trump are greater in size (raw vote count) than the forces that put him in power, so they are also not going to retreat. When the winning side has the least actual supporters, you can probably expect a pretty fierce and weird battle from the opposition.

  It would take a miracle from a power higher than Donald Trump to keep all of that from breaking up, and God hasn’t told me if he’s going to intervene. What I see is spreading chaos throughout the world with no one who can pull it together. I was certainly right about growing chaos last year, and this year looks as though the global breakup will continue to spread like fracture lines on a frozen pond under the weight of a fighting crowd. The US stock market is only one of those lines while more and more crowds are coming onto the ice to enter the fray. The ice could break up cataclysmically as the weight increases all over the pond and plunge everyone into the ice water, or it may only break here and there, a few at a time. The only certain thing is growing chaos.

  If you have to be out on the ice, stand near the shore, and bring ropes.

   

  Read also: Irrational Exuberance in US Stock Market Grasps at 20K for Dow

  

• Assange To Hannity: "Our Source Is Not The Russian Government"

  It won’t be the first time Julian Assange was interviewed and asked whether the source of the hacked DNC and Podesta emails was Russia; however, it will be the first time everyone pays attention to his answer. Recall that the first such interview of Assange – when the question of who had sourced Wikileaks with the hacked emails came up – took place exactly two months ago, on November 3. Back then, in an interview televized by RT, John Pilger explicitly asked Asange where the emails in question had come from.

  Assange’s response was straightforward: “The Clinton camp has been able to project a neo-McCarthyist hysteria that Russia is responsible for everything. Hillary Clinton has stated multiple times, falsely, that 17 US intelligence agencies had assessed that Russia was the source of our publications. That’s false – we can say that the Russian government is not the source.”

  That particular interview took place when Trump has losing badly in the polls, and as such few people paid attention: after all, what difference did it make who had leaked the Podesta emails: Hillary Clinton was assured to win (with a 90%+ probability according to the NYT and other “non-fake news” outlets).

  Needless to say, the issue of Russian hacking has since come back with a vengeance, and culminated last week with Obama expelling 35 Russian diplomats in the greatest diplomatic escalation between the US and Russia in decades; an action which took place based on a flimsy 13-page DHS/FBI report which demonstrated that anyone could have hacked the DNC emails if only they spent a few dollars to purchase a piece of Ukranian PHP malware.

  Which is why many more will pay attention to Assange’s next interview with Sean Hannity, which will air Tuesday on Fox News. According to a Fox News release, the two will discuss Russian hacking, the 2016 presidential election, and both the Obama and upcoming Trump administrations. It will air at 10 p.m. on Jan. 3, with additional portions of the interview airing throughout the week. As Variety adds, The interview will mark Assange’s first face-to-face cable news appearance. It is not, however, the first time he’s spoken publicly to Hannity. Most recently, in December, Assange called into Hannity’s radio show, in which the host gushed to Assange that “you’ve done us a favor” in exposing gaps in U.S. cybersecurity.

  And while what Assange would say was rather predictable, as he would simply reiterate what he has said previously, courtesy of Real Clear Politics, we have an advance glimpse into the punchline, to wit:

  HANNITY: Can you say to the American people, unequivocally, that you did not get this information about the DNC, John Podesta’s emails, can you tell the American people 1,000 percent that you did not get it from Russia or anybody associated with Russia?

   

  ASSANGE: Yes. We can say, we have said, repeatedly that over the last two months that our source is not the Russian government and it is not a state party… Obama is trying to say that President-elect Trump is not a legitimate President.

  When asked if  WikiLeaks changed the outcome of the election, Assange replied “Who knows, it’s impossible to tell” but, he added, “if it did, the accusation is that the true statements of Hillary Clinton and her campaign manager, John Podesta, and the DNC head Debbie Wasserman Schultz, their true statements is what changed the election.”

  Which is correct, however admitting as much would shift the blame away from the “Russians” and back to the failures of the Clinton campaign and the shortcoming of the Democrats, and the whole point of this scapegoating campaign is precisely the opposite.

  As the Hill adds, Assange said there’s an “obvious” reason the Obama administration has focused on Russia’s alleged role in Democratic hacks leading up to Donald Trump’s electoral win.

  “They’re trying to delegitimize the Trump administration as it goes into the White House.”

  He then added that “our publications had wide uptake by the American people, they’re all true,” Assange continued. “But that’s not the allegation that’s being presented by the Obama White House.”

  However, as we said previously, since at the end of the day it is Assange’s word – unless Wikileaks does actually reveal its source, which would be professional suicide – against the word of Obama and 17 agenices who back him up, despite still having provided no actual evidence in the ongoing, and quite bizarre attempt to force a deterioration of US-Russian relations in the final days of the Obama administration, just so Trump can inherit a complete diplomatic mess and make closer relations with Putin more complicated, this latest interview with Assange will likewise resolve absolutely nothing.

  

  

• Syrian Refugee Arrested After Seeking €180,000 From ISIS To Drive Truck Bombs Into European Crowds

  Two weeks after a Tunisian man, Anis Amri, whose German asylum request had been rejected, rammed a truck into a Berlin Christmas market and was later shot dead by Italian police, the German state prosuector’s office said on Monday that a Syrian migrant who arrived in Germany two years ago was arrested on suspicion of seeking money from the Islamic State, to drive truck bombs into crowds.

  Saarbruecken prosecutor Christoph Rebmann said the 38-year-old Syrian was detained on Saturday in his apartment in Germany’s Saarland State, and an arrest warrant was issued on Sunday on suspicion that he was trying to raise 180,000 euros ($189,000) to fund an attack. Rebmann said the man, whom he did not name, was suspected of seeking the money from Islamic State in Syria to buy trucks and load 400-500 kg (880-1,100 pounds) of explosives into each of them. “He is suspected of … requesting 180,000 euros from a contact person in Syria on his cell phone from Saarbruecken in December, 2016 so that he could acquire vehicles to pack with explosives and drive them into a crowd,” Rebmann said.  It was not clear if the Islamic State in Syria, which has been facing a severe liquidity shortage since its oil operation was virtually eliminated by Putin, had that kind of spare change.

  
  The truck which ploughed into a crowded Christmas market in Berlin, on
  December 19, 2016.

  According to a separate statement by Saarland police, the Syrian suspect asked for the ISIS money to finance an “unspecified terrorist attack” in “Germany, France, Belgium and the Netherlands.” 

  Saarland Deputy Police Commissioner Hugo Muller said that the Syrian man planned to repaint the vehicles as police cars. “In his respective communications with contacts linked to IS, he [the suspect] offered or suggested to repaint cars to make them look similar to police cars, load them with explosives, position them in a crowd of people and then detonate them,” Muller said.

  The Prosecutor’s office announced that the suspicion of plotting a terrorist attack are based on a chat in the online messenger Telegram, which was found in the telephone of the suspect during a search of his house. “So far the investigation has found no evidence that the suspect had already prepared [booby trapped] cars to carry out the attacks,” authorities noted though. The man admitted to making contact with the Islamic State, but has denied he had any plans to stage an attack.

  “He said he wanted the money from ISIS to support his family back in Syria,” Rebmann told Reuters, adding that the Syrian had said he wanted to fool the jihadist group into sending him the money.

  The Syrian came to Germany on Dec. 5, 2014, just before a wave of more than 1.1 million asylum-seekers arrived from the Middle East, Africa and Asia in 2015. He was given permission to stay in Germany on Jan. 12, 2015, and originates from the Syrian is from the city of Raqqa, the Islamic State’s de factor capital. According to Reuters, the prosecutor’s office in Saarbruecken, near the French border, had been alerted to his activities by the BKA federal crime office.

  Suggesting a shift in Germany’s “Open Door”approach to refugees, Interior Minister Thomas de Maiziere said that failed asylum seekers who are regarded as a danger should be detained until they can be deported. He made the suggestion in a guest column in Tuesday’s edition of the Frankfurter Allgemeine newspaper.

  Both he and Merkel have plenty of reasons for concern: political analysts, conservative allies and diplomats have said a major terrorist attack in the coming months could damage Merkel’s hopes of winning a fourth term in September’s election. The far-right Alternative for Germany (AfD) party has blamed her policies for the Dec. 19 Berlin attack as well as previous terrorist attacks on German soil.

  

  

• A Biased 2017 Forecast, Part 2

  Submitted by Jim Quinn via The Burning Platform blog,

  In Part One of this article I discussed the failure of our brains to think rationally due to our biases and the relentless propaganda flogged by our Deep State ruling class. Viewing the future through the looking glass of the Fourth Turning keeps you focused on the three catalysts which will drive all events in 2017 and beyond. I’ve addressed my 2017 Debt forecast in Part One. Now I will make some guesses about what might happen in 2017 related to Civic Decay and Global Disorder.

  Civic Decay Forecast

  “Our comforting conviction that the world makes sense rests on a secure foundation: our almost unlimited ability to ignore our ignorance.” – Daniel Kahneman, Thinking, Fast and Slow

  

  The presidential election and its aftermath tell you everything you need to know about the level of civic decay overtaking this country. The country is as divided as it was after the election of Abraham Lincoln in 1860. There is virtually no common ground between liberals and conservatives. The pure hatred and contempt between the winners and losers in the recent election does not bode well for the country over the next four to eight years.

  The social fabric of the country has been torn asunder. The Clinton supporters believe anyone not on their side is deplorable, racist, misogynist, and fans of Hitler. Trump supporters believe anyone not on their side is low IQ, Muslim loving, deceitful, math challenged, and fans of a criminal. The gulf between the two sides is unbridgeable.

  Barack Obama, the well-dressed, polished, articulate, empty suit, who has occupied the White House for the last eight years serving as the front man for the Deep State, has done more to destroy race relations and sense of community than any president in history. His divisive rhetoric and actions over the last eight years created the atmosphere for the acrimonious election and the violent protests that followed.

  His failure to quell the Soros funded Black Lives Matter terrorist organization has resulted in the slaughter of police across the country. Meanwhile, his hometown of Chicago has seen 800 homicides and over 4,400 shootings in 2016 – with over 90% blacks killing blacks. His legacy is one of complete and utter failure, but his hubris knows no bounds, and he actually believes his eight year reign of error was a resounding success. Facts be damned.

  

  “A person who has not made peace with his losses is likely to accept gambles that would be unacceptable to him otherwise.” – Daniel Kahneman, Thinking, Fast and Slow

  Obama fears his legacy will go up in flames. When you govern through executive orders, bypassing Congress, and flaunting the Constitution, your actions can be overturned with the stroke of a pen. When your crowning achievement – Obamacare – is derided by virtually everyone in the country as an epic failure and will be repealed and replaced in short order, you realize your entire presidency was a sham and a national disgrace.

  Obama is flailing about in his final weeks desperately trying to keep the attention focused upon him. He is gambling with the lives of his countrymen by doing everything in his power to provoke World War III with Russia and to inflame the Middle East with his UN engineered snub of Israel. Obama doesn’t like to lose and he is acting like a churlish spoiled brat as his time runs out. He has become a laughingstock around the world. He will fan the flames of discontent in this country until he is ushered out of the White House.

  Here are a few suppositions about what will happen next:

  • Obama trying to sow discord between the U.S. and Russia will fail, as Trump and Putin will meet and find common ground in the Middle East, the Ukraine, and Turkey. Republican neo-cons like McCain and Graham will be outraged. Liberal warmongers who once protested Bush’s wars will also be outraged. The mainstream media will continue to try and fan the flames of war.
  • Before leaving office Obama will poke a final stick in the eye of Trump and his supporters by pardoning Hillary Clinton for all possible wrongdoing. This will infuriate the right. Trump will do everything in his power to investigate the Clinton foundation and any issues which could incriminate Bill, Holder, Lynch or Obama. The peaceful transition of power has not been observed by the left, so all bets are off once Trump takes office.
  • Well-funded (by Soros) domestic agitators, including BLM and various femi-nazi groups, will attempt to disrupt the inauguration ceremonies. There will be violence, conflicts with Trump supporters, and police confrontations. This will further widen the divide in this country. The left have proven to be those who promote violence and will continue to do so. If they venture outside of their urban safe zones, they will be met with a white heavily armed populace.
  • The left wing mainstream media will not be deterred in their efforts to bring down the Trump presidency. They will fire away on a daily basis as their ratings drop lower and lower. Their railing against “fake news” has backfired, driving more people to alternative media sites where they will not be inundated with Deep State approved propaganda. The press will do their utmost to agitate the masses, creating and promoting conflict. Trump will continue to bypass and scorn the media outlets by taking his message directly to the people.
  • Building the wall, shutting off the immigration pipeline of Muslim refugees, defunding sanctuary cities, and fully supporting local police across the country will trigger snowflakes, BLM terrorists, illegal immigrants, and various Soros funded radical groups to stage violent protests in the liberal urban enclaves. They are waiting for their next high profile police shooting to pounce. The civil chaos and violent protests will increase as the year progresses.
  • Whoever Trump nominates as his Supreme Court justice will face enormous scrutiny. The left wing media will stop at nothing to destroy the nominee. The hearings in Congress will be nasty, rude, and vitriolic. The animosity between the opposing sides will reach epic proportions. Both sides know the Supreme Court is of vital importance to the future course of the country.
  • With Obama failing to fade into the sunset and his enormous ego and arrogance spurring him to agitate the left wingers, there will be no de-intensifying of the rhetoric between the right and the left. As we’ve seen, the left are the proponents of violence as their chief weapon. An attempt on the life of Trump is a distinct possibility in his first year in office. A successful or unsuccessful attempt would have far reaching consequences that could lead to civil chaos.

  Global Disorder Forecast

  “We focus on our goal, anchor on our plan, and neglect relevant base rates, exposing ourselves to the planning fallacy. We focus on what we want to do and can do, neglecting the plans and skills of others. Both in explaining the past and in predicting the future, we focus on the causal role of skill and neglect the role of luck. We are therefore prone to an illusion of control. We focus on what we know and neglect what we do not know, which makes us overly confident in our beliefs.” – Daniel Kahneman, Thinking, Fast and Slow

  

  The level of global disorder hasn’t been this high since the 1930s. There are dozens of potential flash points capable of producing a cascading crisis which could blow up the world. The highly touted establishment mantra of globalization has produced an interconnected web of trillions in global debt, with one quadrillion dollars of indecipherable derivatives layered on top, all dependent upon the sustenance of insolvent mega-banks and bankrupt nation states. The only thing keeping this global Ponzi scheme alive is the unfounded belief in the brilliance of central bankers and corrupt politicians.

  The detonator for these interwoven financial weapons of mass destruction is rising global interest rates. The global financial system will be blown sky high by a sustained high volume sovereign bond selloff. The bond market is always the canary in the coal mine. Bonds will sell-off before stocks and real estate. Bond markets have begun to sell-off in a relatively orderly manner over the last three months, with long term Treasuries falling 13%. Bill Gross recently described the growing risk:

  “Global yields lowest in 500 years of recorded history. $10 trillion of neg. rate bonds. This is a supernova that will explode one day.”

  Will that day happen in 2017? No one knows for sure, but the probability is much higher than biased “experts” believe. The substantial concentration of cognitive biases clouding the judgement of the supposed wise men ruling the world has blinded them to the tragic consequences of what happens when the mother of all bubbles explodes like a supernova.

  The complacency of those in charge and the trusting masses will eventually be dealt a death blow when the high frequency trading computers run amuck and wipe out trillions of faux paper wealth in a matter of minutes. The powers that be will declare no one could have seen it coming, when in actuality anyone with a basic understanding of math could have seen it coming from a mile away. Most have chosen to remain blind to reality, because dealing with it is too painful to consider.

  “We can be blind to the obvious, and we are also blind to our blindness.” – Daniel Kahneman, Thinking, Fast and Slow

  Let’s get to a few prognostications regarding global events in 2017:

  • Obama, in a despicable act of trying to fence Trump in, has introduced further sanctions against Russia and Putin based upon no solid evidence other than the opinions of the same people who were sure there were WMD in Iraq. The MSM and the neo-con faction of his party are all on Obama’s side. I expect Trump to override Obama’s childish display of antagonism, while showing the neo-cons there is a new sheriff in town, by developing a working relationship with Putin and lowering the tensions between the two countries.
  • Trump and Putin will come to an agreement regarding keeping Assad in power in Syria while turning both nations’ attention to obliterating ISIS and the so called “moderate” Al Qaeda terrorists in the Middle East. General Mattis and Trump’s team of rational thinkers will develop a feasible plan to destroy ISIS once and for all. Safe zones will jointly be created in Syria and Iraq by the U.S. and Russia to stem the tide of refugees pouring into the EU and U.S.
  • The U.S. dependency on Saudi oil will continue to decrease, further reducing their influence on U.S. policy in the Middle East. Saudi failure in Syria, Yemen and keeping Iran contained will lead to further discontent in the kingdom. Financial woes, declining oil output and religious tensions will fray the fabric of their insular society and lead to a religious uprising and civil war.
  • Turkey has been pushed into the Russian sphere of influence by U.S. meddling. The country is falling apart. A civil war on par with the Syrian conflict is likely to breakout. Russia would likely support the dictator Erdogan against rebel forces supported by NATO. Religious and sectarian violence will tear the country apart and create further tensions between Russia and the U.S.
  • Israel will pre-emptively take action either covertly or overtly to damage the Iranian nuclear program without informing the U.S. of its actions in advance. This will be supported by the neo-con factions in the U.S. government, but will strain relations between Netanyahu and Trump.
  • The crackpot efforts at demonetization by Modi in India will destroy the Indian economy and cause societal upheaval among his 1.25 billion mostly poor citizens. With the eighth largest economy on the planet imploding, the economic reverberations across Southeast Asia will be enormous, possibly being the trigger for the next step down in this ongoing global recession. India’s weakness could spur their enemy Pakistan to take aggressive border actions which could lead to military conflict.
  • With the fourth largest economy in the world in near permanent recession for the last twenty years, Japan’s debt to GDP ratio of 230% portends financial collapse. In the midst of a demographic implosion, with negative interest rates, and a central bank buying all the newly issued debt and billions in stocks, Japan is a bug seeking a windshield. When this Ponzi economy crashes, the worldwide impact will be significant. If Japan doesn’t trigger the global eruption, it will be a major contributor as the detonation spreads around the world.
  • China continues to steadily devalue the yuan against the USD and has eliminated all the gains since 2010. At the same time they have reduced their foreign reserves by over 20% since mid-2014. China’s third largest economy in the world is slowing rapidly as more bad debt builds up in their system. They have a real estate bubble that makes the U.S. bubble seem like a pimple on the ass of a fly. A trade war initiated by Donald Trump would be the pin bursting the Chinese debt bubble. The situation could intensify into a bond selloff and panic. If derivative positions of over-leveraged or poorly-hedged globally systemic banks begin to unravel, cascading losses could lead to a vicious cycle and a tragic outcome.
  • Potential military conflict between China and Japan/U.S. over the islands in the South China Sea ramps up by the day. No one wants a war, but all it would take is a careless stupid act by a low level military officer to create a crisis. China is already bent out of shape by Trump acknowledging the existence of Taiwan. China is still essentially a dictatorship. The country is racked by corruption. An economic collapse could be met with distracting the public through a military adventure against Taiwan. These scenarios are unlikely in 2017, but not out of the question.
  • The most likely and potentially most dire event which could affect the world in 2017 is the disintegration of the EU. Greece is still a basket case. Italy is on the brink. The EU area economy barely registers positive after years of negative interest rates and debt issuance. Unemployment rates, excluding Germany, range between 10% and 25%. Brexit and Trump’s victory portend a further shift to the right in the EU. The right wing party will win the French presidency. Merkel will be defeated in the upcoming elections. France and Italy are likely to have a referendum on leaving the EU. The departure of either will end the failed experiment. The insolvent Italian, French and German banks, specifically Deutsche Bank, will collapse in an EU disintegration scenario.
  • The influx of Muslims into Europe is destroying their culture and leading to violence, terrorism, bloodshed, and now retribution. The left wingers have made a dreadful mistake in allowing hordes of Muslims to invade their countries. Their already fraying social welfare states are now completely bankrupt and citizens are afraid to go into the streets for fear of being attacked by members of the religion of peace. With the right gaining power in France, Germany and Italy, the blowback against Muslims will be violent and bloody. European cities will be rocked with violence throughout 2017.

  “Confidence is a feeling, which reflects the coherence of the information and the cognitive ease of processing it. It is wise to take admissions of uncertainty seriously, but declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true.”  – Daniel Kahneman, Thinking, Fast and Slow

  

  I think it is pretty obvious my pessimism bias may have skewed my predictions for 2017. I’ve been pessimistic for the last eight years and the stock market is up 200%. I try to assess the world from a logical fact based frame of mind, but for the last eight years the world has been kept afloat by a combination of debt, delusions and denial.

  The Deep State propaganda machine has convinced the masses we are living in normal times, despite the fact the Fed printed $3.5 trillion out of thin air and handed it to the criminal Wall Street banks, interest rates have been kept at or near zero for eight years, revelations from Snowden that we truly live in a surveillance state far exceeding Orwell’s dystopian vision, the national debt doubling to $20 trillion, proof that all financial markets are rigged, undeclared wars being waged across the globe, and a reality TV star defeating a criminal to be president of the United States. Sounds pretty normal to me.

  My confidence level in my predictions is quite low. But, if one or two of the low probability events comes to fruition, the financial and/or human devastation will make 2008 look like a walk in the park. I don’t have an agenda in putting forth these predictions. I’m not selling anything or hawking stocks, bonds, or gold. I don’t tout myself as an expert like the over-confident, arrogant pricks on CNBC, CNN, MSNBC, or FOX. I’m just trying to understand what is happening in this crazy universe. We live in an uncertain world. I believe an unbiased appreciation of uncertainty is the cornerstone of rationality and reason. Not acknowledging the role of luck or chance in the course of human events is setting you up for a fall.

  Our countries, central banks, financial complex, military industrial complex, sick care complex, global mega-corporations, and government bureaucracies are ruled by men whose hubris, arrogance, greed and hunger for power has warped our world, producing unfathomable ill-gotten profits for the financial class who can abuse justice with impunity while the average man is bullied, pillaged and abused with disregard.

  These well dressed, highly educated, sophisticated, soulless barbarians hide their evil deeds behind the trappings of culture, but they are revealed by their grotesque schemes, murderous policies, and war profits soaked in blood. When they lose control of this global Ponzi scheme, I hope they pay the ultimate price for their traitorous deeds. Will it happen in 2017? I don’t know. But it will happen before this Fourth Turning climaxes.

  “The risk of catastrophe will be very high. The nation could erupt into insurrection or civil violence, crack up geographically, or succumb to authoritarian rule. If there is a war, it is likely to be one of maximum risk and effort – in other words, a total war. Every Fourth Turning has registered an upward ratchet in the technology of destruction, and in mankind’s willingness to use it.” – Strauss & Howe – The Fourth Turning

  

  

• Dramatic Time-Lapse Video Captures Arrival Of Beijing Smog Cloud

  The following dramatic time-lapse video, shows a wall of toxic smog rolling into Beijing over a 20-minute period collapsed into a 10 second video; it gives a glimpse of the pollution problem in China’s capital city. Chas Pope, a British engineering consultant working in Beijing, shot the video.

  An air-quality index released by China’s municipal environmental protection bureau, which measures potentially hazardous particles in the air, hit 482 on Sunday, almost touching the 500 mark where the scale tops out, and far beyond the point deemed hazardous to health, according to the South China Morning Post.

  “Everyone should avoid all physical activity outdoors,” a warning accompanying the reading warns. “People with heart or lung disease, older adults, and children should remain indoors and keep activity levels low.”

  As a result of the heavy smog to hit much of northern China on Sunday, hundreds of flights were canceled and highways shut, disrupting the first day of the New Year holiday. The latest smog incident to hit Beijing, and which forced local authorities to extend an “orange alert” – the second highest level for air pollution until Jan. 4 – followed a similar hazardous smog alert in mid-December, leading authorities to order hundreds of factories to close and to restrict motorists to cut emissions.

  The latest bout of air pollution began on Friday and is expected to persist until Thursday, although it will ease slightly on Monday, the last day of the New Year holiday according to ABC.

  In Beijing, 126 flights were canceled at the city’s main airport and all buses from there to neighboring cities suspended, state news agency Xinhua said.

  Average concentrations of small breathable particles known as PM2.5 were higher than 500 micrograms per cubic meter in Beijing – 50 times higher than World Health Organization recommendations.

  In Tianjin, Beijing’s next door metropolis, the smog was not as serious but visibility much worse, with more than 300 flights canceled at Tianjin airport and conditions not expected to improve in the near term, the city government said. Xinhua said highways into and out of the city were also closed.

  In Shijiazhuang, the capital of Hebei province that surrounds most of Beijing, about two dozen flights were canceled and eight flights diverted to other airports because of the smog, the People’s Daily said on its website.

  A total of 24 Chinese cities have issued red alerts for the current round of pollution, which mandate measures like limiting car usage and closing factories, while 21 have issued orange alerts, including Beijing and Tianjin.

  As Reuters notes, Pollution alerts are common in northern China, especially during winter when energy demand, much of it met by coal, soars. The country’s northern provinces mostly rely on the burning of hundreds of millions of tonnes of coal each year for heating during northern China’s bitterly cold winters.

  China began a “war on pollution” in 2014 amid concerns its heavy industrial past was tarnishing its global reputation and holding back its future development, but it has struggled to effectively tackle the problem.

  Unfortunately for China’s residents, the “war” is lost every time Chinese production goes into overdrive, forcing the government to order manufacturing to halt output, leading to an economic slowdown, and forcing a sharp restart several weeks to months later, usually as a result of more trillions in credit injections, which then send the credit impulse propagating around the globe.

  In other words, the global economy is now held hostage by the level of toxic particullate matter in northern China: any time this goes off the chart, manufacturing in China is halted, leading to significant downstream effects around the entire world.

  

  

• Yuan Dumps, Bitcoin Jumps As China Researchers Suggest "One-Off Devaluation" & Capital Controls

  As we have detailed numerous times recently, the recent move in Bitcoin has been strongly suggesting increasing fears of capital controls and/or expectations of a looming (and quite notable) devaluation of the Yuan against the US Dollar. Tonight saw China's largest nationalist tabloid suggesting that China should consider one-off yuan devaluation to keep the currency stable at equilibrium level. Offshore Yuan is tumbling – to new record lows.

  As we noted earlier, a quick look at the uncanny correlation between the decline in the Yuan and the rise in the bitcoin, confirms that the digital currency has indeed been largely used to evade capital controls. 

  

  Based on this chart alone, the recent surge in Bitcoin would imply that a substantial devaluation of the yuan is looming. That, or even more aggressive capital controls.

  And tonight, researchers with State Information Center led by Zhu Baoliang wrote in an article published on Shanghai Securities News, that China should consider one-off yuan devaluation to keep the currency stable at equilibrium level and suggest capital controls and as well as what seems like a reference to "virtual currency"…

  …the effect of monetary policy continues to weaken. After repeatedly cut interest rates, lowering after registration, our short futures money market interest rates have dropped to about 2.2%, in the history of a relatively low level. Money supply growth rate far exceeds the rate of economic growth, social capital is abundant. But because of the lack of investment opportunities, more funds through the state-owned enterprises and financing platform to invest in less efficient infrastructure, or real estate, or idle in the virtual economy. Capital continues to off real to the virtual, will breed all kinds of asset bubbles, a huge impact on financial stability. At the same time, state-owned enterprises, financing platforms, real estate and other sectors and industries a large number of financing, but also pushed up the financing costs of financial markets, private enterprises and small and medium-sized enterprises to reduce the financing cost is not large, thus out of private investment.

   

  …

   

  It is suggested that the total social financing and broad money growth should be about 12%, and maintain a reasonable and reasonable liquidity scale. The second is to further improve the RMB exchange rate market-oriented level, and enhance the flexibility of the RMB exchange rate, or even a one-time devaluation of the renminbi, so as to maintain the stability of the RMB in the equilibrium level.

   

  At the same time, the proper control of foreign exchange outflow, the state-owned enterprises in overseas real estate, antiques, teams and other non-substantive, non-technical M & A activities to be strictly limited. Third, closely tracking study American influence elected president's economic policies on China, the foreign exchange market volatility and prevent cross-border capital outflows triggered massive financial risk domestic bond market, the real estate market.

  And for now the reaction is offshore Yuan selling to record lows…

  

   

  And Bitcoin (in China) surging very close to record highs…

  

   

  7,588 Yuan per Bitcoin in the record high and volume in this most recent surge is dramatically higher. But as we noted earlier, for those buying into bitcoin here on the momentum, most of which originates in China, we urge readers to be cautious as by now the PBOC has certainly noticed that the digital currency remains one of the final, and most successful, means of bypassing capital controls in China. Should Beijing mandate that bitcoin no longer be a means to illegally transfer capital offshore, there is risk of a dramatic, and sharp, drop in its price.

  

  

• Edward Snowden Trashed In Absurd WSJ Op-Ed

  Submitted by Mike Shedlock via MishTalk.com,

  Edward Jay Epstein has an op-ed in the Wall Street journal promoting his new book “How America Lost Its Secrets: Edward Snowden, the Man and the Theft”.

  Epstein discusses the Fable of Edward Snowden

  At the forefront of Epstein’s claims is the fact that Snowden lied. “As he seeks a pardon, the NSA thief has told multiple lies about what he stole and his dealings with Russian intelligence,” says Epstein.

  

  Of all the lies that Edward Snowden has told since his massive theft of secrets from the National Security Agency and his journey to Russia via Hong Kong in 2013, none is more provocative than the claim that he never intended to engage in espionage, and was only a “whistleblower” seeking to expose the overreach of NSA’s information gathering. With the clock ticking on Mr. Snowden’s chance of a pardon, now is a good time to review what we have learned about his real mission.

   

  Mr. Snowden’s theft of America’s most closely guarded communication secrets occurred in May 2013, according to the criminal complaint filed against him by federal prosecutors the following month. At the time Mr. Snowden was a 29-year-old technologist working as an analyst-in-training for the consulting firm of Booz Allen Hamilton at the regional base of the National Security Agency (NSA) in Oahu, Hawaii. On May 20, only some six weeks after his job there began, he failed to show up for work, emailing his supervisor that he was at the hospital being tested for epilepsy.

   

  This excuse was untrue. Mr. Snowden was not even in Hawaii. He was in Hong Kong. He had flown there with a cache of secret data that he had stolen from the NSA.

  Well la-de-friggin da. The idiocy of those opening paragraphs is obvious to the world.

  What was Snowden supposed to say? “Hey guys I am not coming into work because I stole documents and I am meeting up with Greenwald?”

  So of course Snowden lied… he had to lie.

  It was not the quantity of Mr. Snowden’s theft but the quality that was most telling. Mr. Snowden’s theft put documents at risk that could reveal the NSA’s Level 3 tool kit—a reference to documents containing the NSA’s most-important sources and methods. Since the agency was created in 1952, Russia and other adversary nations had been trying to penetrate its Level-3 secrets without great success.

   

  Yet it was precisely these secrets that Mr. Snowden changed jobs to steal. In an interview in Hong Kong’s South China Morning Post on June 15, 2013, he said he sought to work on a Booz Allen contract at the CIA, even at a cut in pay, because it gave him access to secret lists of computers that the NSA was tapping into around the world.

  Snowden figured out the NSA was involved in illegal activity and he wanted to investigate the depth of it. He succeeded. Congratulations to Snowden for a job well done.

  In October 2014, he told the editor of the Nation, “I’m in exile. My government revoked my passport intentionally to leave me exiled” and “chose to keep me in Russia.” According to Mr. Snowden, the U.S. government accomplished this entrapment by suspending his passport while he was in midair after he departed Hong Kong on June 23, thus forcing him into the hands of President Vladimir Putin’s regime.

   

  None of this is true. The State Department invalidated Mr. Snowden’s passport while he was still in Hong Kong, not after he left for Moscow on June 23. The “Consul General-Hong Kong confirmed that Hong Kong authorities were notified that Mr. Snowden’s passport was revoked June 22,” according to the State Department’s senior watch officer, as reported by ABC news on June 23, 2013.

  Mercy! His passport was invalidated on June 22, not June 23. Call out the national guard. It’s treason I say.

  To provide a smokescreen for Mr. Snowden’s escape from Hong Kong, WikiLeaks (an organization that the Obama administration asserted to be a tool of Russian intelligence after the hacking of Democratic Party leaders’ email in 2016) booked a dozen or more diversionary flight reservations to other destinations for Mr. Snowden.

  Oh yes, let’s drag Obama’s stupidity into the discussion. The only thing Epstein failed to deliver was nonsense from the Washington Post. Perhaps it’s in the book.

  Nowhere did Epstein make the case Snowden was anything more than a whistle-blower.

  His op-ed is so ridiculous, one can dismiss the book as the work of a misguided fool who fails to understand what the US constitution is all about.

  @ggreenwald @snowden Edward Snowden is a genuine US hero. It's fake-patriot, book-writing fools like Epstein the US really has to fear.

  — Mike Mish Shedlock (@MishGEA) January 2, 2017

  

  

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• How A United Iran, Russia, & China Are Changing The World

  Submitted by Federico Pieraccini via Strategic-Culture.org,

  The two previous articles have focused on the various geopolitical theories, their translations into modern concepts, and practical actions that the United States has taken in recent decades to aspire to global dominance. This segment will describe how Iran, China and Russia have over the years adopted a variety of economic and military actions to repel the continual assault on their sovereignty by the West; in particular, how the American drive for global hegemony has actually accelerated the end of the 'unipolar moment' thanks to the emergence of a multipolar world.

  From the moment the Berlin Wall fell, the United States saw a unique opportunity to pursue the goal of being the sole global hegemon. With the end of the Soviet Union, Washington could undoubtedly aspire to planetary domination paying little heed to the threat of competition and especially of any consequences. America found herself the one and only global superpower, faced with the prospect of extending cultural and economic model around the planet, where necessary by military means.

  Over the past 25 years there have been numerous examples demonstrating how Washington has had little hesitation in bombing nations reluctant to kowtow to Western wishes. In other examples, an economic battering ram, based on predatory capitalism and financial speculation, has literally destroyed sovereign nations, further enriching the US and European financial elite in the process.

  Alliances to Resist

  In the course of the last two decades, the relationship between the three major powers of the Heartland, the heart of the Earth, changed radically.

  Iran, Russia and China have fully understood that union and cooperation are the only means for mutual reinforcement. The need to fight a common problem, represented by a growing American influence in domestic affairs, has forced Tehran, Beijing and Moscow to resolve their differences and embrace a unified strategy in the common interest of defending their sovereignty.

  Events such as the war in Syria, the bombing of Libya, the overthrowing of the democratic order in Ukraine, sanctions against Iran, and the direct pressure applied to Beijing in the South China Sea, have accelerated integration among nations that in the early 1990s had very little in common.

  Economic Integration

  Analyzing US economic power it is clear that supranational organizations like the World Trade Organization, International Monetary Fund and the World Bank guarantee Washington’s role as the economic leader. The pillars that support the centrality of the United States in the world economy can be attributed to the monetary policy of the Fed and the function of the dollar as a global reserve currency.

  The Fed has unlimited ability to print money to finance further economic power of the private and public sector as well as to pay the bill due for very costly wars. The US dollar plays a central role as the global reserve currency as well as being used as currency for trade. This virtually obliges each central bank to own reserves in US currency, continuing to perpetuate the importance of Washington in the global economic system.

  The introduction of the yuan into the international basket of the IMF, global agreements for the Asian Infrastructure Investment Bank (AIIB), and Beijing’s protests against its treatment by the World Trade Organization (WTO) are all alarm bells for American strategists who see the role of the American currency eroding. In Russia, the central bank decided not to accumulate dollar reserves, favoring instead foreign currency like the Indian rupee and the Chinese yuan. The rating agencies – western financial-oligarchy tools -have diminishing credibility, having become means to manipulate markets to favor specific US interests. Chinese and Russian independent rating agencies are further confirmation of Beijing and Moscow’s strategy to undermine America’s role in western economics.

  De-dollarization is occurring and proceeding rapidly, especially in areas of mutual business interest. In what is becoming increasingly routine, nations are dealing in commodities by negotiating in currencies other than the dollar. The benefit is twofold: a reduction in the role of the dollar in their sovereign affairs, and an increase in synergies between allied nations. Iran and India exchanged oil in rupees, and China and Russia trade in yuan.

  Another advantage enjoyed by the United States, intrinsically linked to the banking private sector, is the political pressure that Americans can apply through financial and banking institutions. The most striking example is seen in the exclusion of Iran from the SWIFT international system of payments, as well as the extension of sanctions, including the freezing of Tehran's assets (about 150 billion US dollars) in foreign bank deposits. While the US is trying to crack down on independent economic initiatives, nations like Iran, Russia and China are increasing their synergies. During the period of sanctions against Iran, the Russian Federation has traded with the Islamic Republic in primary commodities. China has supported Iran with the export of oil purchased in yuan. More generally, Moscow has proposed the creation of an alternative banking system to the SWIFT system.

  Private Banks, central banks, ratings agencies and supranational organizations depend in large part on the role played by the dollar and the Fed. The first goal of Iran, Russia and China is of course to make these international bodies less influential. Economic multipolarity is the first as well as the most incisive way to expand the free choice before each nation to pursue its own interests, thereby retaining its national sovereignty.

  This fictitious and corrupt financial system led to the financial crisis of 2008. Tools to accumulate wealth by the elite, artificially maintaining a zombie system (turbo capitalism) have served to cause havoc in the private and public sectors, such as with the collapse of Lehman Brothers or the crisis in the Asian markets in the late 1990s.

  The need for Russia, China and Iran to find an alternative economic system is also necessary to secure vital aspects of the domestic economy. The stock-market crash in China, the depreciation of the ruble in Russia, and the illegal sanctions imposed on Iran have played a profound role in concentrating the minds of Moscow, Tehran and Beijing. Ignoring the problem borne of the centrality of the dollar would have only increased the influence and role of Washington. Finding points of convergence instead of being divided was an absolute must and not an option.

  A perfect example, explaining the failed American economic approach, can be seen in recent years with the Trans-Pacific Partnership (TPP) and the Transatlantic Trade and Investment Partnership (TTIP), two commercial agreements that were supposed to seal the economic trade supremacy of the US. The growing economic alternatives proposed by the union of intent between Russia, China and Iran has enabled smaller nations to reject the US proposals to seek better trade deals elsewhere. In this sense, the Free Trade Area of ??the Asia Pacific (FTAAP) proposed by Beijing is increasingly appreciated in Asia as an alternative to the TPP.

  In the same way, the Eurasian Union (EAEU) and the Commonwealth of Independent States (CIS) have always been key components for Moscow. The function these institutions play was noticeably accelerated following the coup in Ukraine and the resulting need for Russia to turn east in search of new business partners. Finally, Iran, chosen by Beijing as the crossroad of land and sea transit, is a prime example of integration between powers geographically distant but with great intentions to integrate vital structures of commerce.

  The Chinese model of development, called Silk Road 2.0, poses a serious threat to American global hegemonic processes. The goal for Beijing is to reach full integration between the countries of the Heartland and Rimland, utilizing the concept of sea power and land power. With an investment of 1,000 billion US dollars over ten years, China itself becomes a link between the west, represented by Europe; the east, represented by China itself; the north, with the Eurasian economic space; the south, with India; Southeast Asia; the Persian Gulf and Middle East. The hope is that economic cooperation will lead to the resolution of discrepancies and strategic differences between countries thanks to trade agreements that are beneficiary to all sides.

  The role of Washington continues to be that of destruction rather than construction. Instead of playing the role of a global superpower that is interested in business and trade with other nations, the United States continues to consider any foreign decision in matters of integration, finance, economy and development to lie within its exclusive domain. The primary purpose of the United States is simply to exploit every economic and cultural instrument available to prevent cohesion and coexistence between nations. The military component is usually the trump card, historically used to impose this vision on the rest of the world. In recent years, thanks to de-dollarization and military integration, nations like Iran, Russia and China are less subject to Washington's unilateral decisions.

  Military deterrence

  Accompanying the important economic integration is strong military-strategic cooperation, which is much less publicized. Events such as the Middle East wars, the coup in Ukraine, and the pressure exerted in the South China Sea have forced Tehran, Moscow and Beijing to conclude that the United States represents an existential threat.

  In each of the above scenarios, China, Russia and Iran have had to make decisions by weighing the pros and cons of an opposition to the American model. The Ukraine coup d’état brought NATO to the borders of the Russian Federation, representing an existential threat to the Russia, threatening as it does its nuclear deterrent. In the Middle East, the destruction of Iraq, Libya and Syria has obliged Tehran to react against the alliance formed between Saudi Arabia, Turkey and the United States. In China, the constant pressure on South China Sea poses a serious problem in case of a trade blockade during a conflict. In all these scenarios, American imperialism has created existential threats. It is for this reason natural that cooperation and technological development, even in the military area, have received a major boost in recent years.

  In the event of an American attack on Russia, China and Iran, it is important to focus on what weapon systems would be used and how the attacked nations could respond.

  Maritime Strategy and Deterrence

  Certainly, US naval force place a serious question mark over the defense capabilities of nations like Russia, China and Iran, which strongly depend on transit via sea routes. Let us take, for example, Russia and the Arctic transit route, of great interest not only for defense purposes but also being a quick passage for transit goods. The Black Sea for these reasons has received special attention from the United States due to its strategic location. In any case, the responses have been proportional to the threat.

  Iran has significantly developed maritime capabilities in the Persian Gulf, often closely marking ships of the US Navy located in the area for the purposes of ??deterrence. China's strategy has been even more refined, with the use of dozens, if not hundreds, of fishing boats and ships of the Coast Guard to ensure safety and strengthen the naval presence in the South and East China Sea. This is all without forgetting the maritime strategy outlined by the PLA Navy to become a regional naval power over the next few years. Similar strategic decisions have been taken by the navy of the Russian Federation. In addition to having taken over ship production as in Soviet times, it has opted for the development of ships that cost less but nevertheless boast equivalent weapons systems to the Americans carrier groups.

  Iran, China and Russia make efficiency and cost containment a tactic to balance the growing aggressiveness of the Americans and the attendant cost of such a military strategy.

  The fundamental difference between the naval approach of these countries in contrast to that of the US is paramount. Washington needs to use its naval power for offensive purposes, whereas Tehran, Moscow and Beijing need naval power exclusively for defensive purposes.

  In this sense, among the greatest weapons these three recalcitrant countries possess are anti-ship, anti-aircraft and anti-ballistic systems. To put things simply, it is enough to note that Russian weapons systems such as the S-300 and S-400 air-defense systems (the S-500 will be operational in 2017) are now being adopted by China and Iran with variations developed locally. Increasingly we are witnessing an open transfer of technology to continue the work of denying (A2/AD) physical and cyberspace freedom to the United States. Stealth aircraft, carrier strike groups, ICBMs and cruise missiles are experiencing a difficult time in such an environment, finding themselves opposed by the formidable defense systems the Russians, Iranians and Chinese are presenting. The cost of an anti-ship missile fired from the Chinese coast is considerably lower than the tens of billions of dollars needed to build an aircraft carrier. This paradigm of cost and efficiency is what has shaped the military spending of China, Russia and Iran. Going toe to toe with the United States without being forced to close a huge military gap is the only viable way to achieve immediate tangible benefits of deterrence and thereby block American expansionist ambitions.

  A clear example of where the Americans have encountered military opposition at an advanced level has been in Syria. The systems deployed by Iran and Russia to protect the Syrian government presented the Americans with the prospect of facing heavy losses in the event of an attack on Damascus. The same also holds for the anti-Iranian rhetoric of certain American politicians and Israeli leaders. The only reason why Syria and Iran remain sovereign nations is because of the military cost that an invasion or bombing would have brought to their invaders. This is the essence of deterrence. Of course, this argument only takes into partial account the nuclear aspect that this author has extensively discussed in a previous article.

  The Union of the nations of the Heartland and Rimland will make the United States irrelevant

  The future for the most important area of ??the planet is already sealed. The overall integration of Beijing, Moscow and Tehran provides the necessary antibodies to foreign aggression in military and economic form. De-dollarization, coupled with an infrastructure roadmap such as the Chinese Silk Road 2.0 and the maritime trade route, offer important opportunities for developing nations that occupy the geographical space between Portugal and China. Dozens of nations have all it takes to integrate for mutually beneficial gains without having to worry too much about American threats. The economic alternative offered from Beijing provides a fairly wide safety net for resisting American assaults in the same way that the military umbrella offered by these three military powers, such as with the the SCO for example, serves to guarantee the necessary independence and strategic autonomy. More and more nations are clearly rejecting American interference, favoring instead a dialogue with Beijing, Moscow and Tehran. Duterte in the Philippines is just the latest example of this trend.

  The multipolar future has gradually reduced the role of the United States in the world, primarily in reaction to her aggression seeking to achieve global domination. The constant quest for planetary hegemony has pushed nations who were initially western partners to reassess their role in the international order, passing slowly but progressively into the opposite camp to that of Washington.

  The consequences of this process have sealed the destiny of the United States, not only as a response to her quest for supremacy but also because of her efforts to maintain her role as the sole global superpower. As noted in previous articles, during the Cold War the aim for Washington was to prevent the formation of a union between the nations of the Heartland, who could then exclude the US from the most important area of ??the globe. With the fall of the Iron Curtain, sights were set on an improbable quest to conquer the Heartland nations with the intent of dominating the whole world. The consequences of this miscalculation have led the United States to being relegated to the role of mere observer, watching the unions and integrations occurring that will revolutionize the Eurasian zone and the planet over the next 50 years. The desperate search to extend Washington's unipolar moment has paradoxically accelerated the rise of a multipolar world.

  In the next and final article, I will throw a light on what is likely to be a change in the American approach to foreign policy. Keeping in mind the first two articles that examined the approach by land theorized by MacKinder as opposed to the Maritime Mahan, we will try and outline how Trump intends to adopt a containment approach to the Rimland, limiting the damage to the US caused by a complete integration between nations such as Russia, China, Iran and India.

  

  

• U.S. Healthcare Is A Global Outlier (And Not In A Good Way)

  Historically, the United States has spent more money than any other country on healthcare.

  In the late 1990s, for example, the U.S. spent roughly 13% of GDP on healthcare, compared to about a 9.5% average for all high income countries.

  However, as Visual Capitalist's Jeff Desjardins notes, in recent years, the difference has become more stark. Last year, as Obamacare continued to roll out, costs in the U.S. reached an all-time high of 17.5% of GDP. That’s over $3 trillion spent on healthcare annually, and the rate of spending is expected accelerate over the next decade.

  HIGH COSTS, HIGH BENEFIT?

  With all that money being poured into healthcare, surely the U.S. must be getting better care in contrast to other high income countries.

  At least, that’s what one would think.

  Today’s chart comes to us from economist Max Roser (h/t @NinjaEconomics) and it shows the extreme divergence of the U.S. healthcare system using two simple stats: life expectancy vs. health expenditures per capita.

  

  Courtesy of: Visual Capitalist

   

  THE DIVERGENCE OF U.S. HEALTHCARE

  As you can see, Americans are spending more money – but they are not receiving results using the most basic metric of life expectancy. The divergence starts just before 1980, and it widens all the way to 2014.

  It’s worth noting that the 2015 statistics are not plotted on this chart. However, given that healthcare spend was 17.5% of GDP in 2015, the divergence is likely to continue to widen. U.S. spending is now closing in on $10,000 per person.

  Perhaps the most concerning revelation from this data?

  Not only is U.S. healthcare spending wildly inefficient, but it’s also relatively ineffective. It would be one thing to spend more money and get the same results, but according to the above data that is not true. In fact, Americans on average will have shorter lives people in other high income countries.

  Life expectancy in the U.S. has nearly flatlined, and it hasn’t yet crossed the 80 year threshold. Meanwhile, Chileans, Greeks, and Israelis are all outliving their American counterparts for a fraction of the associated costs.

  

  

• How George Soros Destroyed The Democratic Party

  Submitted by Daniel Greenfield via FrontPageMag.com,

  It was the end of the big year with three zeroes. The first X-Men movie had broken box office records. You couldn’t set foot in a supermarket without listening to Brittney Spears caterwauling, “Oops, I Did It Again.” And Republicans and Democrats had total control of both chambers of legislatures in the same amount of states. That was the way it was back in the distant days of the year 2000.

  In 2016, Republicans control both legislative chambers in 32 states. That’s up from 16 in 2000.

  What happened to the big donkey? Among other things, the Democrats decided to sell their base and their soul to a very bad billionaire and they got a very bad deal for both.

  It was 2004. The poncho was the hottest fashion trend, there were 5 million new cases of AIDS and a former Nazi collaborator had bought the Democrat Party using the spare change in his sofa cushions.

  

  And gone to war against the will of the people. This was what he modestly called his own “Soros Doctrine”.

  “It is the central focus of my life,” George Soros declared. It was “a matter of life and death.” He vowed that he would become poor if it meant defeating the President of the United States.

  Instead of going to the poorhouse, he threw in at least $15 million, all the spare change in the billionaire’s sofa cushions, dedicated to beating President Bush.

  In his best lisping James Bond villain accent, Soros strode into the National Press Club and declared that he had “an important message to deliver to the American Public before the election” that was contained in a pamphlet and a book that he waved in front of the camera. Despite his “I expect you to die, Mr. Bond” voice, the international villain’s delivery was underwhelming. He couldn’t have sold brownies to potheads at four in the morning. He couldn’t even sell Bush-bashing to a roomful of left-wing reporters.

  But he could certainly fund those who would. And that’s exactly what he did.

  Money poured into the fringe organizations of the left like MoveOn, which had moved on from a petition site to a PAC. In 2004, Soros was its biggest donor. He didn’t manage to bring down Bush, but he helped buy the Democratic Party as a toy for his yowling dorm room of left-wing activists to play with.

  Soros hasn’t had a great track record at buying presidential elections. The official $25 million he poured into this one bought him his worst defeat since 2004. But his money did transform the Democrat Party.

  And killed it.

  Next year the Democracy Alliance was born. A muddy river of cash from Soros and his pals flowed into the organizations of the left. Soros had helped turn Howard Dean, a Vermont politician once as obscure as this cycle’s radical Vermont Socialist, into a contender and a national figure. Dean didn’t get the nomination, but he did get to remake the DNC. Podesta’s Center for American Progress swung the Democrats even further to the left. And it would be Podesta who helped bring Hillary down.

  The Democrats became a radical left-wing organization and unviable as a national political party. The Party of Jefferson had become the Party of Soros. And only one of those was up on Mount Rushmore.

  Obama’s wins concealed the scale and scope of the disaster. Then the party woke up after Obama to realize that it had lost its old bases in the South and the Rust Belt. The left had hollowed it out and transformed it into a party of coastal urban elites, angry college crybullies and minority coalitions.

  Republicans control twice as many state legislative chambers as the Democrats. They boast 25 trifectas , controlling both legislative chambers and the governor’s mansion. Trifectas had gone from being something that wasn’t seen much outside of a few hard red states like Texas to covering much of the South, the Midwest and the West.

  The Democrats have a solid lock on the West Coast and a narrow corridor of the Northeast, and little else. The vast majority of the country’s legislatures are in Republican hands. The Democrat Governor’s Association has a membership in the teens. In former strongholds like Arkansas, Dems are going extinct. The party has gone from holding national legislative majorities to becoming a marginal movement.

  And the Democrats don’t intend to change course. The way is being cleared for Keith Ellison, the co-chair of the Congressional Progressive Caucus with an ugly racist past, to head the DNC. Pelosi will oversee the disaster in the House. And Obama will remain the party’s highest profile national figure.

  There could hardly be a clearer signal that the left intends to retain its donkey herding rights. Soros and his ilk have paid for the reins. That is why Pelosi, with her access to donors, will retain her position.

  The left had recreated the Democrat Party and marginalized it. Much of this disaster had been funded with Soros money. Like many a theatrical villain, the old monster had been undone by his own hubris. Had Soros aided the Democrats without trying to control them, he would have gained a seat at the table in a national party. Instead he spent a fortune destroying the very thing he was trying to control.

  George Soros saw America in terms of its centers of economic and political power. He didn’t care about the vast stretches of small towns and villages, of the more modest cities that he might fly over in his jet but never visit, and the people who lived in them. Like so many globalists who believe that borders shouldn’t exist because the luxury hotels and airports they pass through are interchangeable, the parts of America that mattered to him were in the glittering left-wing bubble inhabited by his fellow elitists.

  Trump’s victory, like Brexit, came because the left had left the white working class behind. Its vision of the future as glamorous multicultural city states was overturned in a single night. The idea that Soros had committed so much power and wealth to was of a struggle between populist nationalists and responsible internationalists. But, in a great irony, Bush was hardly the nationalist that Soros believed. Instead Soros spent a great deal of time and wealth to unintentionally elect a populist nationalist.

  Leftists used Soros money to focus on their own identity politics obsessions leaving the Dems with little ability to interact with white working class voters. The Ivy and urban leftists who made up the core of the left had come to exist in a narrow world with little room for anything and anyone else. 

  Soros turned over the Democrats to political fanatics least likely to be able to recognize their own errors. His protégés repeated the great self-destruction of the Soviet Union on a more limited scale

  Soros fed a political polarization while assuming, wrongly, that the centers of power mattered, and their outskirts did not. He was proven wrong in both the United States of America and in the United Kingdom. He had made many gambles that paid off. But his biggest gamble took everything with it.

  "I don’t believe in standing in the way of an avalanche," Soros complained of the Republican wave in 2010.

  But he has been trying to do just that. And failing.

  "There should be consequences for the outrageous statements and proposals that we've regularly heard from candidates Trump and Cruz," Soros threatened this time around. He predicted a Hillary landslide.

  He was wrong.

  As Soros plowed more money into the left, its escalating radicalism alienated more of the country. Each “avalanche” was a reaction to the abuses of his radicals.  It wasn't Trump or Cruz who suffered the consequences. It wasn't even his own leftists. Rather it was the conservative and eventually the moderate wings of the Democrat party who were swept away by his left-wing avalanches.

  The left did not mourn the mass destruction of the moderates. Instead it celebrated the growing purity of the Democrats as a movement of the hard left. It did not notice or care that it was no longer a political force outside a limited number of cities. It anticipated that voters would have no choice but to choose it over the "extremist" Republicans.

  It proved to be very, very wrong.

  George Soros spent a fortune to turn a national party favorable to the left into an organization that has difficulty appealing to anyone not on the left. He wanted to control a country he did not understand. And, as the left so often does, he achieved his goals and in doing so destroyed them.

  

  

• Is 2017 The Year Silicon Valley Experiences The Dark Side Of "It's Different This Time"?

  Authored by Mark St.Cyr,

  With 2016 now in the rearview mirror. The one thing that was supposed to be included in that vision was the successful resurgence of IPO’s across “The Valley”. 2016 was supposed to be “the year” of the comeback for unicorn cash-out dreams after what can only be described as a “not as advertised” 2015. For if one needs remembering: 2015 was the worst year for tech IPO’s since 2009.

  Here’s another problem nobody seems willing to discuss: 2015 may have been the high-water mark going forward when compared to 2016. Yet, not too worry we’re told! For has been reported via many a media source 2017 is shaping up be? Hint: The year it comes back.

  Here is a chart from an article just this past August titled “Tech IPO Clog Poised To Burst” To wit:

  

  The prevailing premise, once again, throughout “The Valley” is that “next year” should be the return of those unicorn dreams. After all, how could 2016 be any worse than 2015 was the premise at the beginning of year. The issue? Look at the above chart for clues. Or, as we like to say here in reality, “A whole lot worse!” For 2016 now makes not only 2008 look good. It makes 2009 look terrific in comparison.

  Yet, this hasn’t slowed down one next-in-rotation fund manager to proclaim how “social” or “tech” is just “crushing it”. The real issue is that many who have “invested” based on a lot of this trite have found their portfolios have been the ones getting crushed. Case in point: Twilio™. To wit:

  

  (Source)

  Now I’m not intentionally pointing out this company for any other reason than its IPO was proclaimed across the media and “The Valley” as to be “the” one as to show just how resilient not only the demand for IPO’s would be, but also how “worth it” their heralded valuations were. Once again, the problem? It did just that.

  I have read articles emanating from “The Valley” as late as only weeks ago where it’s touted Twillio’s share price is up over 111% since it’s IPO. Sounds great, but it’s not only disingenuous, it’s damn right shameful to use that as the sole metric for validity to the premise that IPO’s or “tech’s” resurgence when looking at the above chart. For if you are one of the unfortunate that bought shares on the open market only a few weeks after the IPO? There’s no “crushing it” gains for you – you got crushed, with probably more pain to come.

  There was also another “It’s different this time” proclamation which was supposed to prove 2016 to all the “nay-sayers” just how much people like myself “don’t get” social/tech/The Valley/etc. For it was we who needed to see the brilliance of their decision-making processes. And none was so heralded as to what 2016 was supposed to be than the resurgence of Twitter™, with its now multi-tasking CEO.

  How did all that work out? Well, as they say in “The Valley”, let’s look at another “picture” shall we?

  

  (Source)

  Again, all I’ll say to the above is this: If this is what the term “crushing it” now means in “The Valley”? I envision 2017 is going to take crushing up to 11!

  So with all the above for some context. No opinion for comparison would be complete without also including the “holy grail” of everything tech/The Valley/IPO’s, and more. Let alone all that it is said to encompass: Facebook™ (FB).

  

  (Source)

  Now one couldn’t be held for lying to state FB stock is indeed up since the end of 2015. However, would that be telling you the “truth” if one was to only state that one metric? Especially if you were trying to get a correct handle of the “health” or “potential profits” still promised in the “everything social” land of riches arguments?

  As I highlighted on the chart above: If you purchased shares on Feb 1st of 2016 after what was heralded as an earnings report that “crushed it”, and was touted as (here’s that term again) “the” earnings report to shut all the “doom-and-gloomers” up once and for all. Guess what? Hint: You’re right back where you started.

  And for those who decided 2016 was indeed the year where “tech” resurged and was caught up in the whole IPO of the afore-mentioned Twillio in July? It’s more than likely FB in 2016 is now a wash at best, a painful loss at worse. For it fell over 15% lower a mere 45-ish trading days later after those “lifetime highs” to end the year.

  However even that doesn’t really encapsulate the whole. For if one can remember (after all it was just these last few weeks) the “markets” have been on an absolute tear to make (once again) never before seen in the history of mankind highs. And what was FB’s valuation doing during all this? Hint: Look at the chart above. e.g., The exact opposite.

  Another meme that keeps getting perpetuated is the argument “There’s still so much V.C. capital just looking for investment it must surely mean these companies (i.e., The Unicorns) have legitimate ‘so worth it’ valuations for further cash-out riches. This alone proves the nay-sayers don’t know what they’re talking about.” To which I say: Really? Then let’s argue a few points shall we?

  Let me start with this one point: If I said to you, “Hey, want me to show you how to make $1.00 into millions”? You’d probably wouldn’t even dignify the response with a no, you’d just walk away for you knew (at least I hope you would) if it seems to good to be true, it probably is. Now, with that said answer this:

  How is “investing” some trifle sum (e.g., a few $Million) which instantaneously gives one the ability to claim they’re worth $Billions any different? Couple that with – the metrics for those claims are all based on “because they say so”.

  Yes, the accounting for said valuations are based on 1+1= whatever we say it is. Not anything which is based in reality as you or I may understand. Or said differently: It makes Non-GAAP accounting look down right conservative in comparison.

  This is the dirty-liitle-secret in the underbelly of all that is “unicorn” in my view. And sooner, rather than later, I believe this spurious type of accounting will someday find its way into the courts and be abolished. However, that’s for another day.

  If you want an example? Try to square-the-circle that Theranos™ (remember them?) along with its founder Elizabeth Holmes was not only said to be worth, but was proclaimed throughout the business media that she personally was worth a fortune of $4.5 BILLION dollars. While the company itself was worth some $9 BILLION based on what I found to be one of the best lines (as in the form of a question) I can remember that came back in July from a Fortune™ article. The line?

  “How on earth did it [Theranos] manage to raise $400 million in funding at a $9 billion valuation?”

  Yes indeed, it was a good question. Problem was people like myself have been asking that of unicorns since 2008. Not after one of its most proclaimed archetype’s crashes and burns where even the likes of Icarus himself might marvel.

  And speaking of “unicorns”. As 2016 has now come and gone what are we supposed to infer by the ever-increasing troubles emanating from the prized “decacorn” holding stable? (e.g., The Uber™, AirBnB™ types et al)

  It would seem with every passing day (which has now morphed into years) waiting for that “perfect” cash-out point as to IPO seems to only be met with one reglatory hurdle after another. Which could, if found the ruling/rulings go against them, eviscerate their valuation-gone-wild models/metrics that would make even a glue factory blush for efficiency.

  Uber is being sued (again) based on workers wages, classification, and more. China is now an after thought which in 2016 was supposed to be its primary goal if I’m not mistaken. And AirBnB still has its regulatory hurdles to be weeded out through the courts. If many of these go against them, then they face an all too, and very real valuation problem do they not?

  Oh, yeah, and don’t forget “decacorn” stands for a unicorn worth $10’s of BILLIONS in valuation terms. You know where “The Valley” states reality for making the argument that a so-called “glorified taxi-app” is said to be worth more than the likes of GM™, Ford™, Nissan™, Hyundai™, and others, because “Its disruptive”, so of course “It’s totally worth it” and it must be worth more.

  That’s not hyperbole on my part. You can find those exact words and arguments across the media and especially anywhere that’s Silicon Valley centric. Again, truly ponder that last statement. And if in the end you can’t shake an image of a sock-puppet  from entering your mind? Don’t worry, I believe that proves you can still think clearly and understand true reality.

  So now why has all the above happened? And why do I believe there’s far more of a “dark side” to all this “it’s different this time” fantasy world that Silicon Valley or “The Valley” as I like to say hasn’t a clue is on the horizon?

  Here’s the equation I believe will not only send shock waves, but will bring down many a valuation edifice within “The Valley” in 2017. And here it is:

  First: The Fed. And Second: Rate hikes.

  Two very short sentences containing nothing more than two words each but their implications could have exponentially explosive results. For what they portend is that “It’s different this time” may indeed be exactly that.

  What I hoped you may have noticed during this discussion is the one thing myself and very few others pointed out would happen if the hypothesis we’ve been articulating over the last few years was correct. That hypothesis has always been “Without the Fed. pumping in unlimited funds via the QE programs, and a “death-grip” to the zero bound (aka ZIRP) the first ones to show how much of a facade these “markets” where would be seen directly in the “tech” space.

  Notice anything similar in any of the above? Hint: Without QE, everything came to a screeching halt at best, and a complete reversal of fortunes for many at worst. And I believe it’s only just begun. Why?

  This past December, much like the one in 2015, the Fed. once again raised rates. However, this one in-particular is the one that may catch a lot of onlookers (especially most of the financial press) by surprise, and it’s for this reason:

  If you watched the presser (and I suggest one do just that) following the rate hike given by Ms. Yellen, one thing is very front and center: She vociferously argued, or defended the idea of not only raising, but raising more than many presumed (now the working number of hikes is up to 3 from 2) coupled with her again animated defense of possibly even raising more, and more quickly should the Fed’s assessment to anything “fiscal” coming out of congress warrants it. When only weeks before she was arguing a possible need to run a “high-pressure” economy. That in-and-of-itself is a 180 from her (e.g., The Fed’s) implied stance.

  (Just to clarify: “vociferously” and “animated” for Ms. Yellen is my assessment as I compare to her characteristic usually monotone readings or discussions at other events. Your interpretations may differ.)

  So now with the 800lb. “It’s different this time” gorilla in the room I’d like to make a hypothesis for you to consider. I’m not saying “prediction” because that’s for fools. Nobody, and mean just that no-body knows what the future holds. All we can do is “look at the charts” (i.e., teas leaves) coupled with our best assumptions of what is correlation and/or causation, filtered through any acumen we might have gained over the years, then hopefully put ourselves in the best position for either possible gain, or to sidestep harm. Nothing more.

  If we look only at the above charts to my eye one thing can be rationally inferred: Without the Fed. the “everything social” argument is D.O.A. Period.

  What can also be logically asked is this: Why did FB’s valuation begin dropping and has never recovered during which supposedly as we were all being screamed at that “They were crushing it!” in every metric or mobile assumption. Again, it was touted as “You nay-sayers just don’t get it!” And yet, their valuation kept falling? And continued in the face of a rally into year-end that’s now gone into the record books under the classification of “historic”?

  Was this in part due to a reasonable assumption that the one buyer who was buying so much stock in FB during 2016 promptly decided if the Fed. was indeed going to raise it couldn’t buy any more out of concerns of future funding costs?

  Oh, and just to clarify – that buyer was the Swiss National Bank. Second to none in its FB shareholdings. Yes, even to Mark himself.

  And if one can answer “yes” to that question in even a remote possibility, then what does that do to a whole lot of other companies within the “markets”? Hint: Here’s just one article for you to ponder coupled with the above implications. To wit:

  “Mystery” Buyer Revealed: Swiss National Bank’s US Stock Holdings Rose 50% In First Half, To Record $62BN”

  Once again I can’t make this argument more forcefully than what the “tea leaves” or “charts” imply surrounded with the rationalization that the Fed. may indeed be far more aggressive in hiking with this new administration in power than the previous. And if that has even the remotest possibilities of being true? Based on what one could reasonably infer that took place over 2016 in total?

  “It’s different this time” may take on a meaning never dreamed of within Silicon Valley, “The Valley”, and in particular, the “markets” as a whole.

  And if I’m wrong, I’ll just leave you with one last point to consider…

  If there’s so much more room to go in the “everything social” model as is professed via the media and every next-in-rotation fund manager that can elbow their way onto a television set. As one of my favorite Batman® characters was fond of saying, “Riddle me this!”

  If FB, and or the “everything social” model is still in its nascent beginnings with so much more room to grow? Then why was Mark Zuckerberg ready, and seemingly willing in 2016 to sell his shares, and leave FB with the very real possibly of having to give up control to go into politics for two years? You know – if FB is the end all, be all of the “everything social” argument?

  All I’ll say is this: “The Valley” had better be hoping – it is a whole lot different this time – than what it may end up being.

  We shall see soon enough.

  

  

• California Democrats Legalize Child Prostitution

  A couple of days ago we highlighted some of the ridiculous new state laws that will go into effect across the country starting today (see “Here Are Some Of The Ridiculous New State Laws That Will Take Effect January 1st – Happy New Year!“).  And while there was plenty of lunacy noted within the post, apparently we overlooked one of California’s finest achievements of 2016, namely the legalization of child prostitution. 

  Now, we know what you’re thinking…California’s liberal lawmakers in Sacramento are certainly well left of center and maybe a bit kooky but they would never do something quite that ridiculous.  Well, we had the same thought so we decided to track down the actual text of the legislation, Senate Bill No. 1322, and, unfortunately, they did do something that ridiculous.

  Below is the first page of SB1322 which notes that while “existing law makes it a crime to solicit or engage in any act of prostitution” SB1322 “would make the above provisions inapplicable to a child under 18 years of age.”

  

   

  Of course, as the LA Times pointed out, the bill, which was authored by Los Angeles Democrat Holly Mitchell, is founded on the premise that keeping young children out of the juvenile justice system and instead placing them in the hands of Social Services would be better for their ultimate rehabilitation. 

  Gov. Jerry Brown in 2014 signed legislation placing sex trafficking victims without legal guardians under the authority of the dependency system, which centers on caring for abused and neglected children.

   

  SB 1322 drew the support of a large coalition of advocates who said the bill was a step further in that direction, taking young victims entirely out of the juvenile justice system. But law enforcement officials oppose the move, saying the state’s child welfare system is woefully low on resources.

  And while Mitchell’s efforts may be well intentioned, it simply proves once again how completely ignorant our elected officials are to the unintended consequences resulting from the practical application of their ridiculous laws.  Certainly anyone with just a modest IQ and a touch of business sense, should be able to quickly deduce that SB 1322 provides a huge incentive for pimps and human traffickers to target underage girls rather than adults.  As Travis Allen, a rare California Republican serving in Sacramento, noted in an op-ed published by the Washington Examiner, “immunity from arrest means law enforcement can’t interfere with minors engaging in prostitution — which translates into bigger and better cash flow for the pimps.”

  Unfortunately, the reality is that the legalization of underage prostitution suffers from the fatal defect endemic to progressive-left policymaking: it ignores experience, common sense and most of all human nature — especially its darker side.

   

  The unintended but predictable consequence of how the real villains — pimps and other traffickers in human misery — will respond to this new law isn’t difficult to foresee. Pimping and pandering will still be against the law whether it involves running adult women or young girls. But legalizing child prostitution will only incentivize the increased exploitation of underage girls. Immunity from arrest means law enforcement can’t interfere with minors engaging in prostitution — which translates into bigger and better cash flow for the pimps. Simply put, more time on the street and less time in jail means more money for pimps, and more victims for them to exploit.

   

  As Alameda County District Attorney Nancy O’Malley, a national leader on human trafficking issues, told the media, “It just opens up the door for traffickers to use these kids to commit crimes and exploit them even worse.” Another prosecutor insightfully observed that if traffickers wrote legislation to protect themselves, it would read like SB 1322.

  So, congratulations on the new legislation, Ms. Mitchell.  Just like your $15 minimum wage will simply result in a whole bunch of low-income folks getting fired over the coming years, we suspect you just doomed a lot more vulnerable teenage girls to the sex trade.

  

   

  Senate Bill 1322 can be read in its entirety below:

  

  

• The Same Idiots Who Pushed the Iraq War Are Now Stirring Up Hysteria About Russia

  The propaganda about Iraq having weapons of mass destruction was one of the most blatant examples of “fake news” in American history.

  Now, many of the same idiots who pushed the Iraq war lies are stirring up hysteria about Russia.

  For example, the Washington Post’s editorial page editor Fred Hiatt cheerleaded for the Iraq war.  Now, the Washington Post under Hiatt’s leadership has been the main source of the most breathless anti-Russian hysteria.

  ABC News political analyst Matthew Dowd – chief strategist for the Bush-Cheney ’04 presidential campaign – was a big booster for the Iraq war. Now, Dowd Tweets that you’re only a patriot if you blindly accept what President Obama and the intelligence services claim without any proof.

  George W. Bush’s speechwriter David Frum – who pushed many of the biggest lies about the Iraq war – is now trying to ridicule anyone who doesn’t accept the evidence-less claims that Russia hacked the Democratic party as a Kremlin stooge.

  Similarly, Jonathan Chait championed the Iraq war. And now he’s ridiculing those asking for evidence before jumping headlong into anti-Russia hysteria.

  These guys all have a track record of pushing false stories which get us into disastrous wars … why should we listen to them now?

  Other Recent Stories: 

  • The Ultimate Market Forecaster: Martin Armstrong

  • The Same Hackers Blamed for the DNC Email Hack Were Blamed for Hacking the German Parliament … But that Ended Up Being a Leak By German Insiders, Not a Hack At All

  • Pedophilia Is Disgustingly Widespread Among Those In Positions of Power

  • When Did Democrats Turn Into McCarthyites?

  

• If There Really Was Evidence Of Russian Hacking, The NSA Would Have It

  Submitted by David Spring via TurningPointNews.org,

  On December 29, 2016, the Hill posted an article discussing a 13 page report by the FBI and DHS claiming that their 13 page report was “evidence” of Russian hacking in US elections.
  http://thehill.com/policy/national-security/312132-fbi-dhs-release-report-on-russia-hacking

  Wikileaks has repeatedly stated that the source of its leaks was a disgruntled Democratic Party insider.
  http://www.dailymail.co.uk/news/article-4034038/Ex-British-ambassador-WikiLeaks-operative-claims-Russia-did-NOT-provide-Clinton-emails-handed-D-C-park-intermediary-disgusted-Democratic-insiders.html

  However, President Obama issued a press release on December 29 2016 using the DHS-FBI report to justify increasing sanctions against Russia.
  https://www.whitehouse.gov/the-press-office/2016/12/29/statement-president-actions-response-russian-malicious-cyber-activity

  I therefore decided to see what the evidence was of Russian involvement in US Elections. The Hill article linked to this 13 page government press release as its proof of Russian hacking.
  https://www.us-cert.gov/sites/default/files/publications/JAR_16-20296.pdf

  The government press release written by DHS-FBI did not mention Wikileaks in its report. Nor did the report provide any evidence of Russian hacking in the US elections. Instead, the press release stated that “technical indicators” of Russian hacking were in the “CSV file and XML file attached with the PDF.” However, there was no CSV or XML file or link attached with the PDF. I was eventually able to find these two files at this link.
  https://www.us-cert.gov/security-publications/GRIZZLY-STEPPE-Russian-Malicious-Cyber-Activity

  To see the evidence of Russian hacking first hand, I downloaded the CSV file and converted it into a spreadsheet. The CSV file and the XML file both contained the same data. Here is the XML link to this data which can be viewed online in a web browser.
  https://www.us-cert.gov/sites/default/files/publications/JAR-16-20296.xml

  Both files provide a list of 895 “indicators” of Russian Hacking. Unfortunately, nearly all of these indicators are simply IP addresses. In other words, it is a list of 895 servers from from more than 40 countries around the world. But the list also includes a few website domain names. (Domain names are simply the name of the website such as Youtube.com). I looked up these website domain names with the the following tool which tells us who owns the domain names and where they are located:
  https://www.whois.net/

  My review of these domain names confirmed that none of these domain names have any relationship to Russian government hackers. Here are the results for four of the domain names provided by the DHS and the FBI as evidence of Russian hacking:

  ritsoperrol.ru is not in use. It is registered to a private person. The named server hosting the domain is nserver: ns0.xtremeweb.de. This is a German web hosting and consulting company whose address and phone number are publicly listed on their website. It is highly unlikely that Russian hackers would use a public German web host to register and host their domain names.

   

  littlejohnwilhap.ru is not in use and is available to be purchased. It is unlikely that Russian hackers would use a domain name like this to launch a cyber attack on the US.

   

  wilcarobbe.com is taken and is not in use. It is registered to Arsen Ramanov in Groznenskaya Russia. His address, phone number and email address are all publicly listed. It is highly unlikely that Russian hackers would use a domain name that was publicly listed. Hackers are not idiots.

   

  one2shoppee.com is taken and is registered with GoDaddy.com. It is not currently in use. But it is highly unlikely that Russian Hackers would register their domain names with GoDaddy – which is a US server. In fact, it is very unlikely that Russian hackers would ever use any US servers. They would only use their own servers.

  How did these four domain names get on a list of Russian hackers? It is possible that some unknown agents took over these domain names and may have used them for some kind of hacking activity. However, the agents could have just as easily been from the US as from Russia. In fact, it is not likely that these domain names were taken over by Russian hackers for the simple reason that Russian hackers are way to smart to be using these silly tactics.

  None of the 885 IP addresses have any confirmed relationship to Russian Government Hackers

  An IP address is simply a numerical designation for a server. The 885 IP addresses listed in the DHS – FBI CSV file were even more interesting. The IP addresses were located on servers from the US and more than 40 nations around the world including more than 30 IP addresses supposedly located in China. Here are a few of the IP addresses

  • 167.114.35.70
  • 185.12.46.178
  • 46.102.152.132
  • 178.20.55.16

  I looked up several of these IP addresses using the following tool:
  http://whatismyipaddress.com/ip-lookup

  Here are a four examples of IP addresses in the DHS-FBI report:

  167.114.35.70 is a Canadian Corporate server specializing in the promotion of Bitcoin. They are within a few miles of the US border.

   

  185.12.46.178 is a Swiss corporate server associated with the domain name leavesorus.com. The domain name leavesorus.com is currently available to be purchased. This indicates that this is a fake domain name and likely a fake corporation.

   

  46.102.152.132 is another Swiss corporate server this one specializing in emails and associated with the domain name maxsultan.xyz which is a fake domain name. This also indicates that this is another fake corporation.

   

  178.20.55.16 is a proxy server with no known location but has been used as a TOR router exit node. A proxy server is another name for a mirror or server used to bounce information from one server to another in order to hide the true location of the original server. This proxy server is associated with the domain name nos-oignons.net. This domain name was registered on December 31 2012 and is valid until December 31 2017. In other words, whoever got this domain name paid for its use for 5 years. But they did registered the domain name anonymously. The website associated with this server appears to be a group in France promoting the TOR router. They became an association in May 2013 – 5 months after getting the domain name. The group currently has 5 members and it costs one Euro to join this group. Their website was reported 9 days ago as having been infected with the Zues virus. This infection does not leave tracks on server logs. So it is difficult to tell where it came from. Removal of this virus requires a complete rebuild of the server. In short, some agency decided to take out this server and then use it to make a cyber attack on some US government agency and thus have the IP address listed on the DHS-FBI list as one of 895 indicators of Russian hacking.

  Many of the IP addresses yielded the same dead end or otherwise highly suspicious result – meaning that some very large agency is using hundreds of servers in various countries around the world as a front for hacking attacks. I recently researched a series of attacks on my personal websites from hundreds of IP addresses using hundreds of servers that were supposedly located in the Ukraine. I was able to confirm the exact location in the Ukraine that was supposedly being used to launch literally thousands of attacks on my websites. However, it is not credible that anyone in the Ukraine has the millions of dollars needed to be running hundreds of servers in a remote Ukrainian location. Nor is it likely that anyone in rural Ukraine would even have the knowledge to take care of hundreds of servers even if they did have the millions of dollars needed to plow into buying these servers. Nor are they likely to have the knowledge needed to be running very complex cyber attacks. Ukraine is just not a good location for servers. This experience convinced me that attacks were being launched from other locations and were merely being routed through Ukraine in order to mislead people about where the attacks were really coming from.

  Next, the CSV file provided by DHS-FBI listed the physical location of all 885 IP addresses. What is most ironic is that, only two of the 885 IP addresses were from servers in Russia. The most common location of the hacking servers was the United States. Over 30 of the servers were supposedly located in China. But it is known that the NSA has the ability to use satellite mirrors to hide the locations of their servers – making folks believe that the attacks are coming from China (or Ukraine or Mongolia) when in fact they are coming from servers located in the US.

  

  Here are 50 more servers. Again, no Russians:

  

  Here are 50 more servers. How can servers in the US be used as evidence of Russian hacking?

  

  Here is another batch of 50 servers. Again, no Russians.

  

  Wait a Minute… Is this the Smoking Gun???
  Actually, there were two Russian servers located on lines 259 and 261. Here are the IP addresses.

  • 93.171.203.244
  • 95.105.72.78

  Here is more information about each of these:

  93.171.203.244 This is a clean broadband server located near Ufa which is a city in Russia with one million people. It is associated with an organization called Miragroup Ltd. The website is rxbrothers.ru. Naturally, this is a fake domain name which is available to be purchased. Miragroup is actually a corporation located in Great Britain.

   

  95.105.72.78 is another clean broadband server located near Ufa. The organization is JSC Ufanet and the website is ufanet.ru which is a public broadband service started in 1997. Someone apparently is using this broadband service to hack the US government. Could this be the smoking gun that the Russian government is attacking the US? Think about it. If you were a Russian hacker, would you really use a public server located in some Russian town? I don’t think so. This is more like evidence that some hacker was using the local public library.

  Imagine someone launching a cyber attack from the Seattle Public library – and then our government declaring that they have evident that the mayor of the City of Seattle was responsible for the attack because “nothing happens in Seattle without the approval of the Mayor!”. This is worse than a silly accusation. It is ridiculous. It is irresponsible.

  Real Russian Hackers do not use Windows Servers

  Only three of the servers provided in the DHS/FBI report included detailed information (despite the fact that the IP addresses provided information on all 895 servers and that DHS/FBI certainly have detailed information on all of the servers). All three servers listed in the report were Windows servers. It is highly unlikely that Russian hackers or Chinese hackers would be using Windows servers. Instead, all real hackers use Linux servers because Linux servers are much more secure than Windows servers.
  https://techlog360.com/top-15-favourite-operating-systems-of-hackers/

  If there really was evidence of Russian hacking, the NSA would have it

  Former NSA leader turned whistleblower William Binney recently stated that if the Russians really did hack the Democratic Party servers, the NSA would certainly have real evidence (not the nonsense put out in the DHS-FBI CSV file). Here is his quote from a December 29 2016 article by Glenn Greenwald: “The bottom line is that the NSA would know where and how any “hacked” emails from the DNC, HRC or any other servers were routed through the network. This process can sometimes require a closer look into the routing to sort out intermediate clients, but in the end sender and recipient can be traced across the network.”
  https://theintercept.com/2016/12/29/top-secret-snowden-document-reveals-what-the-nsa-knew-about-previous-russian-hacking/

  Edward Snowden has not only confirmed that the NSA has this ability – but that he himself used an NSA program called XKEYSCORE to monitor such attacks.
  https://theintercept.com/2016/07/26/russian-intelligence-hack-dnc-nsa-know-snowden-says/

  Anyone with any kind of technical background in defending against hacker attacks would understand that what Binney, Snowden and Greenwald are saying is true. The evidence of their truth – most of which was supplied by Snowden from NSA documents – is overwhelming.

  

  Conclusion

  An important research principle is to follow the money. People around the world need to ask themselves who has the money and technical ability to be running hundreds and perhaps thousands of real servers and real IP addresses from fake corporations using fake websites in fake locations in more than 40 nations around the world? What agency has already been proven to be running mass surveillance on billions of people in more than 40 nations all around the world? Whose military cyber budget is more than 10 times larger than the cyber warfare budget of the rest of the world combined? There is certainly an elephant in the room – but it is not a Russian elephant.

  At a televised press conference on April 2016, former NSA agent, Edward Snowden asked the Russian leader Vladimir Putin if the Russian government engaged in mass surveillance of millions of people in a manner similar to the NSA. Putin replied that Russian law prohibited the Russian government from engaging in mass surveillance. Putin then pointed out that the Russian military budget was less than 10% of the US military budget. So even if they wanted to engage in mass surveillance, they simply did not have the money.
  https://www.theguardian.com/world/video/2014/apr/17/snowden-putin-russia-surveillance-phone-in-video

  People also need to ask themselves why the FBI DHS chose to place their evidence in a CSV file and XML file rather than a normal document or spreadsheet. If this were real evidence, it would have been placed directly in the PDF report for everyone to read – not hidden away in a file the general public has little ability to read.

  Finally, for the FBI or the DHS to claim that the XML-CSV file contains evidence or even indicators of Russian hacking is simply a false statement. It is a perfect example of fake news. Any news agency promoting this claim without doing even the most basic of research that would easily confirm it is false, should be listed as a fake news agency.

  The real question that we should all be asking is why the DHS and FBI would destroy their reputation by posting such a fake report?

  Several years ago, our CIA claimed that Iraq had weapons of mass destruction. We now know that Iraq had no weapons of mass destruction – meaning that we went to war and spent over a trillion dollars on a fake report. Is this new fake report a pretext for launching a cyber war against Russia? Is it intended to justify increasing US military spending?

  It is hard to say what the real purpose of this fake DHS-FBI report is. But the fact that this silly list of IP addresses was the best evidence they could provide should be a strong indication that there really is no evidence of Russian hacking. Instead, it is more likely that Wikileaks is telling the truth in stating that they got the emails from a disgruntled Democratic Party insider.

  

  

• Drug Cartels Get Involved As Mexicans Rage, Protest Surging Gas Prices

  Even as Mexico has reasons to be concerned about the upcoming presidential inauguration of Donald Trump, who has vowed to make life, and especially trade relations, for Mexicans far more “complicated” under his administration, the population of Mexico has far more pressing problems at this moment, because just days after the finance ministry announced on December 27 that it would raise the price of gasoline by as much as 20.1% to 88 cents per liter while hiking diesel prices by 16.5% to 83 cents, the hikes went into effect on January 1, welcoming in the new year with a surge in the price of one of Mexico’s most important staples and leading to widespread anger, protests and in some cases violence.

  

  As Telesur reports, the people of Mexico “are entering the New Year in a state of rage and anxiety” with protests planned for Sunday to strongly denounce the government’s huge hike in gasoline prices. The sharp rise in gasoline prices has been called the “gasolinazo” in Spanish, which roughly translates to “gasoline-punch.”

  Asalto pic.twitter.com/lv7beYCQCG

  — Gustavo Vela (@GustavoVela71) December 30, 2016

  The price increase comes as part of a planned liberalization of Mexico’s energy market, which involves the move from subsidies that kept gas prices low to a market-based pricing scheme that will adjust prices at the pump based on supply and demand. And while Mexico’s unpopular president Enrique Pena Nieto had promised that fuel prices will fall thanks to his 2014 energy reforms, which dismantled the seven-decade-old national ownership of petroleum resources by state-owned firm Pemex, the initial move in prices has been higher, and decidedly so, by roughly 20% for gasoline and slightly less for diesel.

  The price ceiling will then be adjusted daily starting Feb. 18, before letting supply and demand determine them in March, although it is the immediate shock that is of concern to the peace and stability in Mexico.

  Case in point, around 100 protestors blocked a service station in Acapulco on Friday, while on Saturday an assembly of popular organizations in Chihuahua state’s capital pledged to block all commercial transportation from entering or exiting the city as a means toward paralyzing the economy and pressuring the federal government to reverse the hikes. The assembly of people’s organizations also announced their intention to block major highways and railways in response to what they see as a neoliberal looting of Mexico and handover of its resources to private capital, according to a statement.

  On Sunday, the day the price hikes went into effect, Excelsior reported that angry citizens protested in several spots of the capital, Mexico City, blocking roads, demanding a return to lower gas prices.

  

  

  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.

  
  Gunmen torched vehicles and blockaded roads during a military operation to
  arrest two leaders of the Jalisco New Generation cartel.

  “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.

  Making matters worse is that Mexico was already facing fuel shortages prior to the price hike, angering Mexicans in several states. Ahead of the price hike many people have said they’d hoard gasoline, buying it from stations that in many states are already dealing with supply shortages. Illegal gas sales have popped up, and protests have already taken place in some parts of the country, with more planned in the days of the new year.

  “The fuel price increase causes outrage. People are right: it’s not fair. I support each family, I share their outrage and anger,” Aristoteles Sandoval, the governor of western Jalisco state, wrote on Twitter. Sandoval’s criticism drew particular attention because he is a member of Pena Nieto’s ruling Institutional Revolutionary Party or PRI. Furious opposition governors plan to meet with federal government officials next week to discuss the price hike.

  Meanwhile, the unpopular price hike is also becoming a key political talking point: “We just had a security meeting (between governors and Pena Nieto) days ago and there was not one comment about this situation,” said Mexico City’s Mayor Miguel Angel Mancera, a member of the opposition Party of the Democratic Revolution or PRD.

  The protests are the latest expression of widespread antipathy toward Pena Nieto, whose popularity according to Telesur has plummeted below 25% this year due to his government’s widespread perception of collusion with cartels and failure to address drug-related violence, disappointing economic growth, violent repression of social movements and his unpopular decision to host Donald Trump before the anti-immigrant Republican won the U.S. presidential election.

  Not helping matters, Finance Minister Jose Antonio Meade defended the fuel price increase, saying it would not trigger more inflation and that eventually the “final price for consumers will be among the most competitive in the world.” For now, however, the response has been a negative one, with social media criticism leveled at Meade, who has been portrated as “chupasangre”, or “bloodsucker.”

  José Antonio Meade un chupasangre que quiere ser presidente. Él autorizó el gasolinazo. Monero Rocha pic.twitter.com/goJnHPp056

  — Gustavo Vela (@GustavoVela71) December 29, 2016

     
  In Mexico City, service station worker Maria de la Luz Lopez, quoted by Telesure, was worried that the price increases could hurt her. “I’m afraid that to compensate for the increase, (customers) will no longer give us tips,” said Lopez who, like many in her field, does not earn a wage and depends on the generosity of drivers.

  But ultimately, the price shock will hit those who are hurting the most. The increases would mean Mexicans, of whom 52% live in poverty, would spend more of their annual income on fuel than the residents of 59 other countries, according to data compiled by Bloomberg.

  “We see the gasolinazo as an attack against the population, as a robbery, taking into account the levels of income of the population,” Jose Narro, director of the workers’ group Coordinadora Nacional Plan de Ayala, told Reforma.

  Making matters worse, and refuting the promises of the finance minister, the Mexican central bank has warned that gas price increases would boost inflation at a time when the peso has already plunged against the US dollar due to the Trump victory.

  With or without the involvement of the cartels, Mexico’s economy is likely to undergo a turbulent period of decline, which will be music in the ears for Mexico’s opposition politicians, such as leftist opposition leader Andres Manuel Lopez Obrador who is likely to benefit from Pena Nieto’s error, and who has put blame for the gasolinazo on the shoulders of Pena Nieto’s center-right Institutional Revolutionary Party and the conservative National Action Party, calling the former “corrupt and cynical” and the latter hypocrites.

  The policy and its rollout have further diminished the perception of the Mexican president and his party, which has been a trend for some time.

  “Mexicans were promised lower electricity prices, they got higher electricity prices. Mexicans were told austerity was needed, they got a congress that showers itself with bonuses,” Dutch journalist Jan-Albert Hootsen, wrote on Facebook. “Mexicans were promised more security and a fairer justice state, they got homicide rates back at the level of 2012, the Ayotzinapa massacre and its botched investigation, etc.”

  “If you say one thing and are then time and time again perceived to do the exact opposite, what starts off as irritation among the public at some point will simply boil over,” Hootsen concluded.

  For those on the lookout for new gray, or even black swans, in the new year, keep an eye on the public mood in Mexico as a result of the now effected surge in gas prices.

  

  

• A Biased 2017 Forecast, Part 1

  Submitted by Jim Quinn via The Burning Platform blog,

  “The idea that the future is unpredictable is undermined every day by the ease with which the past is explained.” – Daniel Kahneman, Thinking, Fast and Slow

   

  A couple weeks ago I was lucky enough to see a live one hour interview with Michael Lewis at the Annenberg Center about his new book The Undoing Project. Everyone attending the lecture received a complimentary copy of the book. Being a huge fan of Lewis after reading Liar’s Poker, Boomerang, The Big Short, Flash Boys, and Moneyball, I was interested to hear about his new project. This was a completely new direction from his financial crisis books. I wasn’t sure whether it would keep my interest, but the story of Daniel Kahneman and Amos Tversky and their research into the psychology of judgement and decision making, creating a cognitive basis for common human errors that arise from heuristics and biases, was an eye opener.

  In psychology, heuristics are simple, efficient rules which people often use to form judgments and make decisions. They are mental shortcuts that usually involve focusing on one aspect of a complex problem and ignoring others. These rules work well under most circumstances, but they can lead to systematic deviations from logic, probability or rational choice theory. The resulting errors are called “cognitive biases” and many different types have been documented.

  Heuristics usually govern automatic, intuitive judgments but can also be used as deliberate mental strategies when working from limited information. Kahneman and Tversky created the heuristics and biases research program, which studies how people make real-world judgments and the conditions under which those judgments are unreliable. Their research challenged the idea that human beings are rational actors, but provided a theory of information processing to explain how people make estimates or choices. Kahneman won a Nobel Prize in economics for his work in behavioral economics.

  To put their research into terms the common person can understand, human decision making is extremely flawed due to our biases, feelings, irrational thought processes and beliefs in falsehoods. It’s over-confidence in our decision making ability that causes us the most problems. For the average person this can result in financial hardship, frustration or a premature death.

  When high level government officials, bankers or corporate executives make flawed decisions due to their biases, it can mean war, financial disasters, depressions, or disastrous legislation like Obamacare. Hubris, egotism and faulty reasoning, as noted by Mark Twain one hundred and fifty years ago, can kill you and in some cases lead to war and unthinkable levels of death and destruction.

  “It’s not what you don’t know that kills you, it’s what you know for sure that ain’t true.”  – Mark Twain

  In the seven weeks since the election of Donald Trump as our next president, I’ve witnessed the largest case of hindsight bias in world history. Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it.

  On November 7 the “expert” pollsters like Nate Silver; every corporate mainstream media network, newspaper, and website; along with elitist economists, professors, Hollywood movie stars, Wall Street bankers, and billionaire oligarchs; were 100% sure Hillary Clinton was going to be elected president. Only the deplorables thought otherwise – and they spoke loudly. Putin had nothing to do with the result.

  These very same “experts” and “deep thinkers” now act as if Trump’s election was foreseeable, predictable and the likely outcome. They bloviate about how and why he won as if they knew it was going to happen. When 99% of all establishment “experts” were sure Trump was going to be crushed in a Clinton landslide, why should anyone listen to a word they say?

  The same people who didn’t see even the faintest possibility of a Trump victory now expect the ignorant masses to believe their analysis of what will happen next. I would like to attribute their obtuseness to cognitive biases, but I believe it is more insidious. The Deep State propaganda machine is hard at work spreading falsehoods.

  “A reliable way to make people believe in falsehoods is frequent repetition, because familiarity is not easily distinguished from truth. Authoritarian institutions and marketers have always known this fact.” – Daniel Kahneman, Thinking, Fast and Slow

  The onslaught of 2017 predictions from a myriad of Wall Street “experts” talking their book, highly educated economists demonstrating their lack of prescience, mainstream media pundits peddling propaganda and cheerleaders cheering for their home teams, has already begun. I haven’t written an annual forecast article in a few years because I was tired of being wrong. Since I have no newsletters or books to sell, no investments to peddle, and no agenda to push, an annual forecast will just be my best guess at what will happen in 2017.

  The two biases most likely to color my analysis are confirmation bias (The tendency to focus on information in a way that confirms my preconceptions) and pessimism bias (The tendency to overestimate the likelihood of negative things happening). My family and friends think I’m a pessimist. I think I’m a realist. I try to use data to back-up my conclusions, but as George Dvorsky points out, our brains often lead us astray.

  “The human brain is capable of 10¹⁶ processes per second, which makes it far more powerful than any computer currently in existence. But that doesn’t mean our brains don’t have major limitations. The lowly calculator can do math thousands of times better than we can, and our memories are often less than useless — plus, we’re subject to cognitive biases, those annoying glitches in our thinking that cause us to make questionable decisions and reach erroneous conclusions.” – George Dvorsky

  My predictions will be framed by my belief we are midway through a Fourth Turning era of crisis. The three catalysts framing this Fourth Turning are debt, civic decay, and global disorder. No amount of normalcy bias, optimism bias, over-confidence, or desire for the status quo, will take precedence over the uncontrollable mechanisms propelling this Fourth Turning.

  We are in the midst of a once in a lifetime crisis and there is only one thing more frightening than not knowing what is coming next, and that is living in a world run by “experts” who think they know exactly what is going to happen next. These are the same “experts” who didn’t see the 2005 housing bubble, the 2008 financial collapse, the EU implosion, Brexit, or the Trump presidency.

  “It’s frightening to think that you might not know something, but more frightening to think that, by and large, the world is run by people who have faith that they know exactly what is going on.” –  Amos Tversky

  I try to understand the world around me every day, but the hyper-complexity, noise, Deep State propaganda, and volume of data points is overwhelming to our easily distracted brains. I have constructed a story in my mind of how things will develop over the next five to ten years based upon the generational theory put forth by Strauss & Howe in their book The Fourth Turning. It is not a story with a happy ending.

  I don’t have high confidence that I understand how it will play out and what specific events will propel history in the making. I can admit my deficiencies, while people in power with the ability to blow up the world overestimate their understanding of the world and ignore the role of chance in events.

  “We are prone to overestimate how much we understand about the world and to underestimate the role of chance in events.” – Daniel Kahneman, Thinking, Fast and Slow

  Knowing what I don’t know about the unknowns, I’ll try and use what I do know to make some prognostications about 2017:

  Debt Forecast

  It is fascinating to me no one seems all that worried about the systematically dangerous levels of global debt supporting essentially bankrupt governments, banks and consumers. Global debt stood at $142 trillion at the end of 2007, just prior to a worldwide financial meltdown, caused by too much bad debt in the financial system.

  To “fix” this problem, central bankers around the globe ramped up their electronic printing presses to hyper-drive and created another $57 trillion of debt by mid-2014. They haven’t taken their foot off the gas since. Today, global debt most certainly exceeds $225 trillion and has surpassed 300% of global GDP. Rogoff and Reinhart made a pretty strong case that when debt to GDP exceeds 90%, disaster will follow.

  

  Global debt issuance reached a record $6.6 trillion in 2016, with corporations accounting for $3.6 trillion – most of which was used to buy back their stock at all-time highs. What could possibly go wrong? The level of normalcy bias amongst financial “experts”, the intelligentsia, and the common man is breathtaking to behold. We are in the midst of the mother of all bubbles, never witnessed in the history of mankind, and we pretend everything is normal, with no consequences for our reckless disregard for honesty, rational thinking, or simple math.

  

  The 2000 dot.com bubble and the 2008 housing bubble were one dimensional. This mother of all bubbles required the global coordination and unprecedented irresponsible intervention of the US Federal Reserve, the European Central Bank (ECB), the Bank of Japan (BOJ), the Bank of England (BOE) and the Swiss National Bank (SNB) to lead the world to the brink of monetary disaster. The highly educated theorists running these central banks have created tens of trillions in unpayable debt while suppressing interest rates to zero or below at the behest of their Deep State masters.

  The result is simultaneous bubbles in stocks, bonds and real estate. The pin destined to pop all the bubbles is slightly higher interest rates. The 1% increase in the 10 Year Treasury is already causing havoc in the housing market, the bond market and is hammering pension funds. With the hundreds of trillions in globally interconnected derivatives primed to detonate, 2017 could be an explosive year.

  

  Here are a few things I think could happen in 2017 on the economic front:

   

  • The national debt stands at $19.9 trillion and will reach $20 trillion before Obama departs. With spending on automatic pilot and tax revenue in decline, the national debt will reach $21 trillion in 2017. With most of the debt financed short-term, the increase in rates will ratchet the interest on the debt from $433 billion to over $550 billion.
  • With the CPI increasing by over 3% in the first few months of the year, the Fed will continue to raise rates, and the 10 Year Treasury will breach the 3% level.
  • Home prices have surpassed the 2006 peak, even though existing home sales are still 20% below 2006 levels and housing starts are 50% below 2006 levels. The entire “recovery” has been engineered by the Fed and Wall Street at the high end of the market. With mortgage rates up 1% already, the further increase will result in existing home sales and housing starts falling by 20% in 2017 and home prices falling by 5% to 10%.

  

  • The short-term OPEC agreement will allow oil prices to move back to $60 per barrel, further eating into consumer discretionary spending. Desperate fracking companies needing cash flow to service their debt will ramp up. Bankrupt or near bankrupt countries like Venezuela, Mexico, and Iran will also increase production. With a slowing global economy and surging supply, prices will collapse again into the $40s in the second half of the year.
  • Holiday sales for the bricks and mortar retailers will be reported in January as lukewarm at best. By February, the store closing announcements will reach into the hundreds. Sears will finally declare bankruptcy and shutter at least 50% of their stores. Mall developers will begin to declare bankruptcy as vacancies and rising interest rates create a perfect storm.
  • Consumer debt will reach the previous high of $1 trillion, as subprime student loan and auto debt continues to accumulate at an astounding pace. The spigot for student loans is likely to be tightened under Trump, with over 25% of the loans effectively in default. Auto sales (if you can call six year financing and 40% leases, sales) peaked in 2016. Millions of auto buyers are underwater on their loans, subprime auto loans are going into default quicker than you can say Cadillac Escalade, and higher interest rates will price out more potential suckers.
  • The faux jobs recovery is running out of steam. With non-existent wage growth, surging costs for rent, health care, energy, and credit cards tapped out, American families will hunker down and reduce spending further. With consumer spending accounting for 68% of GDP, this will lead to an official recession by the middle of 2017.
  • All the recent surveys showing consumer confidence soaring and optimism for 2017 are based on nothing but hope. The promises of a Trump administration will not come to fruition until 2018 at the earliest. He will meet resistance from Democrats across the board and resistance amongst his own party. His grand plans for massive tax cuts and spending increases will run into the reality of $1 trillion annual deficits. As reality sets in, and recession arrives, the unwarranted optimism will fade rapidly. Tax cuts will be tempered by reduced spending plans.
  • The USD hitting fourteen year highs against the basket of worldwide currencies does not bode well for bringing manufacturing jobs back to make America great again. The reason for the strong dollar is because we are the best looking horse in the glue factory. With Europe and Japan promoting negative interest rates and the Fed slowly raising rates, the dollar will continue to rise. This will hurt our manufacturing businesses, increase our $500 billion annual trade deficit further, and depress the profits of our global corporations.
  • With rising inflation, rising interest rates, stagnant wages, falling corporate profits, stock valuations at all-time highs, and corporations no longer able to finance stock buy backs at no cost, the stock market will finally hit the wall after a seven year bull market. This last surge of euphoria, based on nothing but Trumpmania sweeping Wall Street, will constitute the final blow-off. The market is currently valued to provide nominal returns of less than 1% over the next twelve years and is likely to experience an abrupt sell-off of 50% in the near future. I believe the near future will be 2017. I think the powers that be will be testing Trump’s mettle in his first year to see if he’ll play ball and do their bidding.

  

  “The illusion that we understand the past fosters overconfidence in our ability to predict the future.”  – Daniel Kahneman, Thinking, Fast and Slow

  In Part Two of this article I will ponder how much further our civic decay and global disorder will advance in 2017. Over-confidence, hubris and arrogance of our leaders will be the driving factors.

  

  

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• Former Lifelong Democrat Admits "Obama Is A Failed President"

  Authored by Eric Zuesse via Strategic-Culture.org,

  I’m a former lifelong Democrat, stating here a clear and incontestable fact: Barack Obama is a failed President.

  It’s true not just because of the sad realities such as that «Top Ex-White House Economist Admits 94 % Of All New Jobs Under Obama Were Part-Time» — or, as the economists Alan Krueger and Lawrence Katz wrote in the original of that study: «94 percent of the net employment growth in the U.S. economy from 2005 to 2015 appears to have occurred in alternative work arrangements». («Alternative work arrangements» referred there to Americans who were involuntarily working only part-time jobs — they simply couldn’t find full-time, though that’s what they wanted.) In other words: Obama’s failure isn’t just because of America’s increasingly sales-clerk, and burger-flipping, workforce.

  And Obama’s failure is also not just because «Poverty Rose In 96 % Of U.S. House Districts, During Obama’s Presidency». (However, that reality turned out to be decisive in Hillary Clinton’s loss to Donald Trump on November 8^th, as Nate Cohn pointed out in The New York Times on December 23rd, headlining, «How the Obama Coalition Crumbled, Leaving an Opening for Trump». Hillary was running on Obama’s poor record.)

  Obama’s failure is also because of other important reasons. Among them is the uncounted thousands of people who were killed in, and the uncounted millions of people who became refugees from, the places where Obama (or else his installed regimes) bombed and caused the residents to either die or flee. George W. Bush’s destructions of Iraq and even Afghanistan were now being followed by the destructions of Libya by Obama and Sarkozy, and of Syria by Obama and Saud and Thani and Erdogan, who armed the tens of thousands of jihadists and sent them into Syria to overthrow and replace Assad — and Bush’s destructions were followed also by Obama’s keeping in power the barbaric junta-regime that replaced the democratically elected Honduran Presiden Manuel Zelaya on 28 June 2009 shortly after Obama entered the White House (and this junta-regime, in turn, caused Honduras’s murder-rate to soar 50% to become the world’s highest, which then caused hundreds of thousands of Hondurans to flee and become undocumented U.S. immigrants, against which Donald Trump campaigned).

  The Obama regime has thus created far more misery outside America, than inside it. Failures such as those didn’t cost Hillary Clinton many (if any) votes (because most voters didn’t even know about these foreign-affairs matters), but those failures were actually even bigger than Obama’s failures in purely domestic U.S. policy matters (which voters do know about). Trump campaigned against ‘illegal immigrants’, but he never even called attention to those people’s fleeing the hells that the U.S. regime had created in not only Honduras but earlier in Guatemala and El Salvador — coups and U.S.-trained death squads.

  In noting Obama’s failures, I’m not a Republican; I’m no one who is condemning Obama for his allegedly being a ‘Marxist' ‘Muslim’, or some other imaginary distraction from the reality (a reality which is too Republican for Republicans to be able to criticize — so, they’ve insteadignored that reality, and cited fake ‘reasons’ against him, including ‘death panels’ and other fabrications, which Republicans then forgot about after their fraudulent allegations against him became clear, to all but insane people, as being just Republican lies). 

  Obama is a failure not because he wasn’t sufficiently conservative or ‘Christian' (as Republicans had constantly accused him of having been), but instead because he wasn’t sufficiently progressive (nowhere close to being a progressive) — and, in many ways, he was actually far more conservative than any of his duplicitous campaign-rhetoric had pretended him to be. He’s an extraordinarily gifted liar — he was phenomenally successful at that.

  And I am not blaming Obama for congressional Republicans’ having been more obsessed with making him be a failed President, than they were interested in making America be a successful nation. Republicans lie at least as much as he does, just not nearly as skillfully. (They especially can’t feign compassion as skillfully as he.) This article thus does not blame him for what the overt Republicans were doing to cripple the little good he had actually tried to achieve — such as closing Guantanamo. It’s only about Obama’s failure.

  Obama’s failure was all his own — it’s not because of the good things that Republicans had blocked him from doing; it is instead because of the horrible things (such as his failed TPP, TTIP and TISA trade-treaties, and his successful 2011 killing of Gaddafi, and 2014 coup in Ukraine) that were central to his actual agenda — a conservative, even reactionary, agenda, which favored the interests of the hundreds of billionaires who control U.S.-based international corporations, above the interests of the 300+ million American people, whom the U.S. President is supposed to be serving.

  I voted for Barack Obama both times, because both of his opponents («Bomb bomb bomb Iran» McCain in 2008, and «#1 geopolitical foe» Romney in 2012) were clearly determined to focus America’s enormous military expenditures away from exterminating the jihadists and their Saudi funders, toward instead conquering Iran (McCain) and Russia (Romney), and also because Republicans — throughout at least the period extending from 1910 to 2010 — consistently had, in fact, produced a record of far less success with the U.S. economy, than did Democrats, and especially because neither McCain nor Romney had repudiated the very worst President in U.S. history (at least prior to Obama) and his atrocious record of lies and needless bloodshed and invasions: George W. Bush — Bush’s Party instead reaffirmed that monstrous President.

  And, consequently, I never expected Barack Obama to turn out to have been, quite possibly, even a worse President than Bush. Nobody expected that — except Republicans, for whom Bush wasn’t bad enough to satisfy them (and certainly not bad enough for them to apologize for — so, they did not apologize for him).

  Here, then, is Obama’s astounding record of failure:

  «From a Democracy to a Plutocracy»

  «Understanding President Obama’s Strategy to Force Cutting Social Security, Medicare, and Medicaid»

  «Obama Finally Lays His Cards on the Table»

  «Barack Obama Is Now Completing His Long-Held Plan to Subvert the Democratic Party»

  «Obama: ‘I Don’t Care About the Public’s Welfare’».

  As that last one documented, the Obama ‘Justice’ Department scored an all-time low number both of financial institution fraud prosecutions, and of white-collar-crime prosecutions. Obama came into power immediately after an economic crash that was loaded especially with financial-institution frauds. He protected the banksters. So, financial-executive-fraud prosecutions didn’t soar, like they should have; instead they plunged. Like Obama told the Wall Street bigs, near the start of his regime, on 27 March 2009, in private, inside the White House: «My administration is the only thing between you and the pitchforks. … I’m not out there to go after you. I’m protecting you… I’m going to shield you». And that’s what he did. And, on 20 September 2016, Dave Johnson of the Campaign for America’s Future, headlined «Banks Used Low Wages, Job Insecurity To Force Employees To Commit Fraud», so there was no way that the employees could keep their jobs except to do the crimes that they were being virtually forced by their bosses to do.

  The criminality was actually at the very top — where Obama had promised «I’m protecting you». So, the TARP’s Inspector General urged, on 26 October 2016 (since the President was refusing to prosecute those people), «that Congress remove the insulation around Wall Street CEOs and other high-level officials by requiring the CEO, CFO and certain other senior executives to sign an annual certification that they have conducted due diligence within their organization and can certify that that there is no criminal conduct or civil fraud in their organization». The Special Inspector General of TARP, Christy Goldsmith Romero, was proposing this, as being the way to make prosecutions, of these top-level fraud-executives, so easy that the Obama Administration’s claims — that there was no top-level fraud that could be prosecuted — would be an even more blatant, absurdly false, lie, than it had been.

  If this country were Ukraine, or even Russia, then Americans (trained by decades of a CIA-controlled ‘free press’) would say «Oh, of course those countries are corrupt, but America isn’t like that». But, at least under Barack Obama, ‘we’ were that. This was America — and ‘our’ President was protecting the elite fraudsters, instead of prosecuting them.

  Nonetheless, anyone who would say that the American people are not better off now than they were at the end of Bush’s disastrous Presidency would be either misinformed or lying, because there’s lots of data showing that, finally, eight years after Bush, Americans are better off than they were at the end of Bush’s miserable eight years (even though not yet better off than Americans were prior to Bush’s 2007-2008 crash). And the Administration published on December 15^th its record of ‘successes’ «The 2017 Economic Report of the President» which was real but not adjusted for the fact that Obama came into office at the pit of the economic crash, which means that such ‘successes’ are almost inevitable, hardly a credit to Obama. But yet, the reality stands, that the Obama economic recovery was the weakest in the entire post-World-War-II period. Plus, the federal debt doubled on his watch, even while, as that Economic Report mentioned only in passing: «The United States has seen a faster increase in inequality in recent decades than any of the major advanced economies, and despite the historic progress made over the last eight years, the level of U.S. inequality remains high». Normally, after an economic crash, economic inequality reduces; but under Obama it remained at or near its pre-crash high. 

  It was an economic record (and an invasion and coup record) of which any Republican President could justifiably have been proud (since conservatives favor inequality, a caste system) — but no Democrat could (except fake ones — such as Obama and the Clintons).

  

  

• Criminal Witch Hunt In Dallas Pension Fiasco

  Submitted by Michael Shedlock via MishTalk.com,

  In the wake of the near collapse of the Dallas police and fire pension fund, a Dallas News editorial says Former Police, Fire Pension Managers Should Face Criminal Investigation.

  

  Mayor Mike Rawlings is right to ask for a state criminal investigation into shady practices by the Dallas Police and Fire Pension System’s prior management.

   

  The fund is on the verge of a potentially catastrophic collapse that could leave public safety workers, taxpayers and the City of Dallas on the hook for billions of dollars. And the reason stems from abuses under the former administrator Richard Tettamant, who was ousted in 2014.

   

  The fund’s former managers bet heavily on risky investments such as luxury homes in Hawaii, a resort and vineyard in California and Dallas’ Museum Tower itself, and promised its hardworking police and fire employees unrealistic returns while enjoying lavish perks.

   

  Those returns didn’t materialize, saddling the retirement fund’s new managers with $2 billion to $5 billion in unfunded liabilities. Frightened police officers and firefighters began a run on the fund, pulling more than $500 million out of it in recent weeks at a pace that would have drained the fund’s cash to dangerous levels.

   

  The city of Dallas contends it is not legally responsible for the actions of the pension fund’s former managers, in part, because the city doesn’t control the fund, which was set up decades ago by the Texas Legislature. But the city is on the hook nonetheless; a failure of the fund would betray promises made to current and retired public safety workers and would make it much more difficult for the city to recruit new police officers and firefighters.

   

  Too many people are at risk and those who put them there need to be called to account for their actions.

  Criminal Witch Hunt

  I am not here to defend the investment schemes of the fund managers. And I certainly take exception to alleged lavish perks. But this case is going nowhere.

  If one wants to place blame, then blame rests squarely on the shoulders of the legislature that authorized the plan and established the absurd pension assumptions.

  Perks did not cause the pension plan to be ridiculously underfunded. Rather, ridiculous plan assumptions steered the managers into risky assets.

  In hindsight, it’s easy to say the fund should have thrown it all at Google, Apple, etc. Care to make the same case going forward?

  Taxpayers on the Hook?

  Taxpayers should not be on the hook for this mess. The promises were bound to fail from the get go.

  The fault for this mess is squarely in the hands of politicians, not those running the fund.

  Nearly every public pension plan in the nation is severely underfunded. There is nothing special about Dallas.

  However, politicians will never point the finger at themselves. So the witch hunt is on.

  Related Articles

  1. Dallas Police Retiring in Droves, Taking Lump Sum Pensions, Fearing the Money Isn’t There (And It Isn’t)
  2. Dallas Pension Showdown: Mayor Seeks to “Target Those Who Got Rich From System”
  3. Not Just Dallas: Fort Worth Employees’ Pension Plan in Deep Trouble

  The only realistic solution to this mess is massive haircuts on pension assumptions, one of two ways: Voluntary or in bankruptcy court.

  

  

• Washington Post Caught Spreading More Fake News About "Russian Hackers"

  Readers of the Washington Post received some alarming news yesterday when the paper published a story alleging that those pesky “Russian hackers” were up to their no good tricks again and had managed to “penetrate the U.S. electricity grid through a utility in Vermont.”  The full headline read as follows:

  

  The opening paragraph of WaPo’s story directly linked the “hack” of the Vermont utility to the same “Russian hacking operation dubbed Grizzly Steppe” that the Obama administration has blamed for the DNC and John Podesta email hacks.  Vermont’s Governor, Peter Shumlin, told WaPo that “Americans should be both alarmed and outraged” by these actions perpetrated by “one of the world’s leading thugs, Vladimir Putin,” before seemingly calling for further retaliatory actions from the Obama administration.

  Vermonters and all Americans should be both alarmed and outraged that one of the world’s leading thugs, Vladimir Putin, has been attempting to hack our electric grid, which we rely upon to support our quality-of-life, economy, health, and safety. This episode should highlight the urgent need for our federal government to vigorously pursue and put an end to this sort of Russian meddling.

  Moreover, Vermont Senator Patrick Leahy took the rhetoric to a whole new level by asserting a diabolical Russian plot to shut down the U.S. electrical grid in the middle of winter…a move that would most certainly kill off half the state’s population in an instant.

  

  Of course, it didn’t take long for the New York Times and ABC to latch on to the story since it fits their “2016 election hacking” narrative so perfectly.

  Our Russian “friend” Putin attacked the U.S. power grid. https://t.co/iAneRgbuhF

  — Brent Staples (@BrentNYT) December 31, 2016

  NEW: “One of the world’s leading thugs, [Putin] has been attempting to hack our electric grid,” says VT Gov. Shumlin https://t.co/YgdtT4JrlX pic.twitter.com/AU0ZQjT3aO

  — ABC News (@ABC) December 31, 2016

   

  Alas, there was just one minor problem, namely that the entire article was completely fabricated.  Apparently the esteemed “journalists” of the Washington Post didn’t even bother to contact the Burlington Electric Department to confirm their bogus story…and why should they…it fit the “Russian hacking” narrative so perfectly therefore it must be true, right?

  Well, apparently not.  The quick spread of WaPo’s “fake news” story forced the Burlington Electric Department to issue a clarifying statement assuring worried residents that, indeed, their electricity grid had not been hacked, but rather a single “laptop not connected” to the grid had been found to have a malware virus.

  

  Which forced the embarrassed Washington Post to quickly tone down their provocative headline…

  

  …and supplement their original article with the following “Editor’s Note” admitting the entire premise of their original story was nothing more than “fake news.”

  Editor’s Note: An earlier version of this story incorrectly said that Russian hackers had penetrated the U.S. electric grid. Authorities say there is no indication of that so far. The computer at Burlington Electric that was hacked was not attached to the grid.

  Which drew quick reactions from twitter…
  

  1) Not an infiltration of the power grid.
  2) “Russian” malware can be purchased online by anyone.
  3) See 1 & 2. https://t.co/bVIG8zQBsk

  — Dell Cameron (@dellcam) December 31, 2016

  Pretty amazing how badly the Post appears to have mangled this one. You didn’t call the Vermont utility regulator before publishing?

  — Eric Geller (@ericgeller) December 31, 2016

   

  …and Glenn Greenwald of The Intercept, who blasted WaPo for their “irresponsible and sensationalist tabloid behavior.”

  THIS MATTERS not only because one of the nation’s major newspaper once again published a wildly misleading, fear-mongering story about Russia. It matters even more because it reflects the deeply irrational and ever-spiraling fever that is being cultivated in U.S. political discourse and culture about the threat posed by Moscow.

   

  The Post has many excellent reporters and smart editors. They have produced many great stories this year. But this kind of blatantly irresponsible and sensationalist tabloid behavior – which tracks what they did when promoting that grotesque PropOrNot blacklist of U.S. news outlets accused of being Kremlin tools – is a by-product of the Anything Goes mentality that now shapes mainstream discussion of Russia, Putin and the Grave Threat to All Things Decent in America that they pose.

  Ironically, a few weeks ago we noted that The Washington Post was all too happy to promote an anonymous website that described Zerohedge as “‘dark gray’ propaganda, systematically deceiving its civilian audiences for foreign political gain” (see “Washington Post Names Drudge, Zero Hedge, & Ron Paul As Anti-Clinton ‘Sophisticated Russian Propaganda Tools’“), all while presenting exactly zero evidence to support their preposterous claim.  Perhaps it’s time for WaPo to dedicate a bit more of its time to self-reflection.

  

  

• At Least 35 People Killed After Shooters Dressed As Santas Open Fire In Istanbul Nightclub – Live Feed

  Live Feed from Istanbul courtesy of RT:

  * * *

  Turkey greeted the New Year with another tragedy after at least 35 people were killed and 40 wounded around 1:15 am local time, when gunmen dressed as Santas opened fire on New Year’s revelers at a nightclub in Istanbul on Sunday morning, Istanbul Governor Vasip Sahin told reporters.

   

  Gunman in #Reina Istanbul nightclub attack was reportedly wearing a Santa Claus costume, according to local mediahttps://t.co/eaAGD1ixya pic.twitter.com/BkjZI83oNR

  — BBC Breaking News (@BBCBreaking) January 1, 2017

  

  Ambulances line up in front of the Reina nightclub in Istanbul, where a gun
  attack took place during a New Year party.

  The assailant shot a police officer and a civilian as he entered the Reina nightclub before opening fire at random inside according to Reuters. The club lies on the shore of the Bosphorus Strait in the Ortakoy district of Turkey’s most populous city.

   “A terrorist with a long-range weapon … brutally and savagely carried out this incident by firing bullets on innocent people who were there solely to celebrate the New Year and have fun,” Sahin told reporters at the scene.

  

  Dozens of ambulances and police vehicles were dispatched to the club in Ortakoy, a cosmopolitan neighborhood nestled under one of three bridges crossing the Bosphorus, and home to clubs, restaurants and art galleries. Reina is one of Istanbul’s best-known nightclubs, popular with locals and tourists alike.

  #BREAKING Istanbul Governor says at least 35 people killed, 40 wounded in attack at Reina night club #Turkey pic.twitter.com/irZD4Djtj1

  — CNN Türk ENG (@CNNTURK_ENG) January 1, 2017

  Attackers w kaleshnikovs reportedly still inside famous #Reina club.
  Seen several dead & injured people footage & photos. #IstanbulAttacked. pic.twitter.com/3lNYNNeixS

  — ilhan tanir (@WashingtonPoint) December 31, 2016

  Sahin told local media that the assailants first killed the police officer, who was standing at the door of the club, and then went on a rampage inside, killing innocent civilians. A policeman and a civilian are reported to be among the two known casualties at the nightclub. There were two attackers involved, according to NTV, but conflicting reports also described a lone gunman.

  ??te ilk götüntüler. 40 civar? yaral? oldu?u belirtiliyor. pic.twitter.com/FExbV7e7Qy

  — Murat ?ahin (@SunucuSpiker) December 31, 2016

  The gunmen were dressed in Santa Claus outfits, wielding assault rifles, Turkish media said.

  breaking An armed attack on a local club, Reina, in #Istanbul. Many casualties reported. At least 2 dead and over 50 ambulances on scene pic.twitter.com/GF1vhcCoW7

  — Jewish Breaking News (@JBN) December 31, 2016

  According to RT, one of the gunmen has reportedly hidden inside the club, while the whereabouts of the second one were not immediately clear. The number of casualties may rise, as local press estimates that between 500 and 600 people could have been in the club at the time of the attack, Mynet Haber reports.

  Emergency crews have been evacuating injured people from the building as the police search for suspects. Some people jumped into the waters of the Bosphorus to save themselves and were being rescued by police.

  A search and rescue operation for those who jumped in the water is being carried out by maritime police.

  

  

• "Something For Nothing" All-Weather Funds Disappoint In Post-Election Era

  Variously marketed as "all-weather", "all-season", or "bulletproof", the so-called "risk-parity" strategies of some of the world's largest hedge funds have been anything but 'stable' since the election as the combination of leverage and bond losses have crushed the gains from an exuberant equity market.

  Promise people something for nothing and you are going to attract a lot of attention. Stumble in the process and the critics will be quick to pounce.

  As The Wall Street Journal reports, the weeks since the election have been rough for one of the most polarizing investment strategies out there: risk parity.

  The strategy – which simply put, involves using diversification – and sometimes borrowed money (leverage) – to find an (historically-optimized) balance between risk and return.

  Bridgewater’s variant of this strategy, for example, has historically used borrowed money to invest about $1.50 for each dollar in assets, often putting the leverage in historically less-volatile bonds. The goal is stocklike returns with less volatility.

  Problems occur when histroical relationships between asset-classes break down… just as they did during this year (when the historical norm of inversely correlated bond and stock prices reversed completely)…

  

  The post-election rally in stocks and selloff in bonds hit these portfolios, embolding critics of the approach…

  

  Bonds have been in a bull market for 35 years, so adding leverage would have produced strong returns for a modest increase in volatility, says Ben Inker of fund management firm GMO. He also argues that “volatility and risk are not the same.”

  

  As WSJ concludes, the strategy has sharply underperformed both stocks and a traditional 60% stock 40% bond index fund offered by Vanguard since 1993.

  Without the benefit of leverage, lower volatility equals lower returns. Even with it, though, there are occasional bumps in the road. For investors whose moods are as fickle as the weather, risk parity may involve more risk than reward.

  

  

• Global Recession And Other Visions For 2017

  Submitted by Economic Prism's MN Gordon via Acting-Man.com,

  Conjuring Up Visions

  Today’s a day for considering new hopes, new dreams, and new hallucinations.  The New Year is here, after all.  Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad.  But what else will happen?

   

  

  Image of a recently discarded vision…

   

   

  Here we begin by closing our eyes and slowing our breath.  We let our mind role back into the gray matter of our brain.  We wait patiently for new neurological connections to open up.  Then, ever so subtly, visions of the year ahead come into focus.

  Will stocks go up or down?  What about gold and Treasury bonds?  Will the economy expand or contract?  Are we fated for World War III?  Who will win the Super Bowl? These are the questions – and more – we intend to answer.

  Obviously, conjuring up visions is more art than science.  But so is Fed monetary policy. Nonetheless, before we get to it we must first lean upon ancient Chinese Philosopher Lao Tzu for a full disclaimer:

  “Those who have knowledge, don’t predict.  Those who predict, don’t have knowledge.”

  Hence, what follows comes from a place of zero knowledge.  We know nothing.  Still we sharpen our pencils and face our limitations.  What follows, for fun and for free, are several simple conjectures for the year ahead…

   

  Global Recession

  To start, the animal spirits and optimism that greeted Donald Trump’s election victory will flame out not long after inauguration day.  Without a major economic crisis, it will be near impossible to get substantial – $2 trillion deficit – spending approved by Congress.  Moreover, even if massive fiscal stimulus is approved it won’t make much of a lick to the economy for four quarters or more – if ever.

  One lesson of the 2009 American Recovery and Reinvestment Act is that throwing money at infrastructure projects is more complex than commonly appreciated.  Shovel ready projects don’t exist.  In particular, shovel ready infrastructure projects that could generate significant growth in high paying jobs are hard to come by with just the inking of a stimulus bill.

   

  

  The surplus shovels from the last batch of shovel-ready infrastructure projects are still in the process of being dumped…

   

  No doubt, this lesson was quickly forgotten when the sky stopped falling just after the darkest days of the Great Recession.  So, too, it’ll be quickly remembered.  Soon enough, the realization that stimulus spending won’t provide an immediate lift to the economy will spread across Wall Street and the post-election stock market rally will reverse.

  Similarly, the Fed’s efforts to ‘normalize’ interest rates will be tabled.  The economy simply can’t afford higher rates.  This isn’t Trump’s fault, of course.  He’s been handed a badly damaged economy.

  Quite frankly, there’s really no way to fix it.  Decades of economic degradation are irreversible.  Adding new debt based stimulus will only further the overall divergence between debt and GDP.

  Specifically, the debt will grow larger while GDP slouches forward.  On top of that, larger deficits will eventually ignite a level of consumer price inflation that hasn’t dramatically flared up since the early 1980s.  A scenario of slow growth and rising consumer price inflation will emerge at some point.

  But first something else must come to pass.  By mid-year it will become all too apparent that the global economy, including the United States, Europe, China, and Japan, are in a full blown recession.

  The Fed will quickly return to zero interest rate policy.  Ten Year Treasury yields will again slip below 2 percent as investors blindly plow their capital back into the ‘safest investment in the world’ at precisely the most dangerous time.

  The S&P 500, presently near its all-time high, will rapidly descend to 1,200.  And, only then, when fear has reached its extreme, will Congress be ready to go along with Trump’s massive fiscal spending program.

   

  

  The interesting Wile E. Coyote moment of blissful weightlessness shortly after passing the all time high…

   

  Other Visions for 2017

  That’s when things will go really haywire.  By then the effects of infrastructure stimulus will be considered too slow to save the economy from itself.  Calls for a direct economic jolt will be made by Larry Summers as he lobbies to replace Janet Yellen as Fed Head.

  Direct monetization of the debt in the form of ‘tax rebate checks’ will be mailed out to every working age citizen whether they have a taxable income or not.  Alas, any temporary boost to the economy these efforts encourage will be overwhelmed by rising price inflation… and higher interest rates.

  The strong dollar trend will also reverse in earnest by the second quarter.  About this time gold will once again glitter.  Consequently, the first three months of the year will be a fantastic time to accumulate and add to your physical gold hoard.  By mid-April gold will be back above $1,350 per ounce.

  Indeed, the coming year will be one of great distress.  As the global economy slips and slides into recession, world politicians will look to distract blame from their own bungles.  They’ll seize any diversion afforded to them to channel the discontents of their masses.  They’ll blunder outward in search of a new mission and greater purpose for their young and idle.

  Global factions are on a collision course for war.  We wish this weren’t so.  But, unfortunately, ongoing territorial disputes between China, Malaysia, Philippines, Taiwan, and Vietnam over the Spratly Islands in the South China Sea will continue to escalate.

  Likewise, ancient territorial disagreements between Japan and China over the Senkaku-Diaoyu Islands in the East China Sea will deepen.  These disputes, and a burgeoning arms race, could provide the perfect diversion for China and Japan as their debt fueled economies unravel.

  On a high note, we start the New Year hopeful that a lasting ceasefire has been reached in the proxy Syria war – in spite of the failings of the United Nations and the Obama administration.  In addition, there are numerous other reasons for optimism as we enter 2017.

  For example, right now, in cities across the globe, brilliant minds at the fringe of scientific propriety are but one experiment away from the big energy breakthrough humanity’s been waiting more than 45-years for.  Unfettered by academic zealotry, this new scientific discovery will not come from a leading research or government institution.

  Like all great discoveries in our time, it will come from a small team of eccentrics operating out of a garage on a shoestring budget. What we mean is, in the words of the late Gordon MacKenzie:

  “Orville Wright did not have a pilot’s license.”

   

  

  What is this? Flying without a license?  Obviously, the pre-world war age must have been pure chaos… not enough regulations, as Ben Bernanke would say!

   

  Lastly, the Dallas Cowboys will win the Super Bowl.

   

  

  The best part of the Dallas Cowboys. In late 2015 the team became the most valuable sports team in the world, surpassing Real Madrid – with its estimated net worth reaching $4 bn.

  Happy New Year!

  

  

• Narrative Smashed By Stats – "Most Americans" Did Not Vote For Hillary Clinton

  Submitted by Salil Mehta via Statistical Ideas blog,

  Happy New Year!  As we wrap up another successful year of the statistics blog (now with >50k followers), we would be remiss not to recognize some nice friends who are still feeling disappointed over the outcome of the recent U.S. election.  It is worth exploring a little more about the election results, based on the most updated voting records.  Particularly as the Democrats have pivoted the tête-à-tête from recount and FBI director Comey, to popular vote and Russian president Putin. 

  What does it mean to now imply that "most Americans" voted for Democratic ideals, given the results (looked at through the prism of a popular vote tabulation) showed Hillary Clinton won by only a couple percent? 

  It turns out that this sort of conclusion is false, and instead it leads to one party presuming to hold a mighty moral high-ground from their ¼ voting share? 

  From a peak in 2008, now through 2016, those not caring to vote (in white below) continuously rose to 45% (from 43%).  This is a higher voter apathy than in virtually all other advanced countries.  And frankly, it is the largest American segment of 114m (up from 99m).  Last-minute undecideds (including me) rose.

  Additionally, the voting share for the popular vote "winner" (in blue below) fell to 48% (from 53%), or as a portion of the entire eligible population (as opposed to as a portion of voters) it fell to 26% (from 30%).  So on net, even as the population grew, a small fraction voted (and within that an even smaller fraction voted for the popular vote "winner").  This results in Hillary Clinton not epitomizing the views of "most Americans" even if she "won the popular vote", but rather supported by only 66 million Americans (down from 70 million who voted for Barack Obama in 2008).

  I'm with her?  Observe their share of the pie, below!  Democrats have simply seen a continuously dwindling moral-standing to speak for all Americans, even as the population has grown in the past 8 years.

  

  So now back to my friends who are still feeling sour over the Presidential election and looking for relief.  I feel a particular sense of responsibility since my polling probability research was read by millions and continuously solicited/shared by one party, and always properly showed Donald Trump had much stronger odds (~3x) versus what MSM polls or Nate Silver were "scientifically" suggesting.  It is worth noting something here at year-end: it's an acutely individual loss, to not see that there are so many tremendous and long-term opportunities we get to enjoy, just living in a great nation such as the United States.  We get most things right, most of the time.  We get to argue about politics and not worry about a knock on our door in the middle of the night.

  The rest of the world has already moved on, as they should.  They really never cared as much about you, or your candidate (just as ½ of our own country doesn't, per above).  That was mainstream media noise that fooled you.  And having worked for many years, in and out of Washington, we can assure you that well over 90% of people have issues so much larger than who was or will be in the White House.  Yet it's captivating, nonetheless, the amount of attention spent in social circles defying this actuality, and presuming moral high-ground by  falsely twisting statistics to suit private needs.  By setting some simple statistics straight, we honestly hope 2017 ushers in a new era of knowledge, contentment and worldly views, as we leave the disparaging partisan choke-hold of the 2016 elections behind.

  

  

• Tesla Sued Over Model X "Spontaneous Acceleration"

  Is Tesla having the worst year ever?  Over the course of 2016, we’ve written frequently about Tesla’s many setbacks including several auto-pilot related crashes, hackers taking control of moving vehicles, egregious levels of cash burn and a very controversial merger with SolarCity.

  Now, as 2016 draws to a close, Tesla once again finds itself in the spotlight as a Model X owner has filed a lawsuit alleging that his electric SUV suddenly accelerated while being parked, causing it to crash through the garage of his home and into his living room, injuring the driver and a passenger.

  In the lawsuit filed Friday in California, Ji Chang Son said that one night in September, he was slowly pulling into his driveway as his garage door opened when the car suddenly sped forward.  Unfortunately for Tesla, the lawsuit seeks class action status noting at least seven other complaints from owners of similar incidents.  Per CBC News:

  “The vehicle spontaneously began to accelerate at full power, jerking forward and crashing through the interior wall of the garage, destroying several wooden support beams in the wall and a steel sewer pipe, among other things, and coming to rest in plaintiffs’ living room,” the lawsuit said.

   

  The lawsuit, filed in U.S. District Court in the Central District of California, seeks class-action status. It cites seven other complaints registered in a database compiled by the National Highway Traffic Safety Administration (NHTSA) dealing with sudden acceleration.

  

   

  Not surprisingly, after conducting a “thorough investigation,” Tesla concluded that their cars are still extremely awesome and therefore any malfunction in operation was certainly due to user error.

  Tesla said in a statement that it had “conducted a thorough investigation” of the claims made by Son.

   

  “The evidence, including data from the car, conclusively shows that the crash was the result of Mr. Son pressing the accelerator pedal all the way to 100 per cent,” a Tesla spokesperson said in an emailed statement.

   

  Tesla said it has various ways to protect against pedal misapplication, including using its autopilot sensors to distinguish between erroneous pedal application and normal cases.

  Of course, the only question now is how many “plumes of smoke” have to be discovered before Tesla investors start to worry that there might actually be a fire?

  

  

  

• Euronomics Decomposing, Raise a Glass of Cheer!

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

  

  Europeans must have been delighted to discover that one thing is working as well as it has since the start of the Great Recession. Behemoth banks that are failing are still able to pay their Christmas bonuses to their top executives and give nice dividends to their shareholders thanks to Super Mario Draghi. 

  Keeping up the tradition of central bankers looking out for other bankers, Mario Draghi, chief of the European Central Bank “agreed to lower the minimum capital requirements for Deutsche Bank on Tuesday, ‘giving the lender more leeway to structure bonus payments and dividends.’” (Zero Hedge).

  Thank God for that, huh? The needs of the stockholders and top execs have been taken care of before one of the world’s oldest megabanks falls on everyone else. While Deutsche Bank’s stocks sit at all-time lows after it has been required to pay $8 billion in fines, at least the golden parachutes are in top condition.

   

  Italy surrenders to Germany

   

  Meanwhile, the world’s oldest bank in Italy got nationalized for Christmas so that the losses of capitalists — many of whom exist outside of Italy — could all be socialized to the people of Italy. However, when the People’s Republic of Italy became the new owner of the bank, they found out the hole in the bank’s core was bigger than they thought. (Surprise.)

  The ECB now estimates the hole to be 8.8 billion euros, rather than the 5 billion of additional capital they formerly believed it needed. That’s a 75% increase in the bank’s capital shortfall that took place from November through December. What a sleigh ride!

  Turns out that all the talk of nationalizing the bank caused depositors to rapidly withdraw funds (who woulda thought?), creating something of a black hole in the bank’s core. Lingering depositors don’t need to worry, though, because the Italian parliament has assured them that all Italians are equally on the hook for the bank’s losses by guaranteeing a 20-billion euro fund to stabilize any Italian banks that are too big to fail.

  In Monte’s case, the Italian government will invest 6.3 billion euros of this fund into filling the growing hole, and the rest will be squeezed out of bond-holders. (Of course, that news is bound to send even the lingerers running if they know what’s good for them, but obviously they don’t, or they wouldn’t still have been there when all this went down, as warnings have been evident for a couple of years.)

  Gee, whatever happened to bail-ins putting the bank’s salvation primarily in the hands of share-holders, bond-holders and major depositors? Look’s like the government still believes general taxpayers should front the biggest wad. So, you’ll be glad to know that, even in Italy, the principles of saving too-big-to-fail banks at the start of the Great Recession are still largely in play. The costs of failing capitalists shall be largely socialized upon the poorer parts of the population because their citizens have happily allowed banks to remain too big to fail.

  Maybe the depositors were all withdrawing their money to buy Christmas presents, so Italy will be saved by a Santa Clause rally. (It is no more wishful than thinking these banks will not ultimately pull down their governments. This was, after all, the bank’s third bailout. Keep bailing.)

  Italy is the eighth-largest economy in the world, third-largest in Europe, and its GDP per capita hasn’t grown since the Great Recession. It has issued the third-largest amount of sovereign bonds in the world to survive its relentlessly unfolding debt catastrophe, with many of its debts being held by banks and central banks outside of Italy.

  On top of that, eighteen percent of all bank loans in Italy are bad debt that has been carried on the books since the Great Recession. Italian banks don’t write off this long-term bad debt because they have less than 50% of the capital they need in order to cover it. So, they pretend their customers will all win the Italian Liralicious Lotto and pay up. Since GDP per capita is actually sinking, the ability of each customer to ever pay one of these debts off is ever diminishing. The Super Mario jackpot better pay off real soon.

  No wonder Italians took a big step toward their own euro exit on December 4th. Back when they had their own currency, they could, at least, try to inflate their way out of trouble. They could lower the lira’s value in order to draw trade away from Germany and toward Italian products. Now they socialize debts away from German (and other non-Italian) bond owners and bank holders toward the Italian populace.

   

  Owed to Grecians earning less

   

  Meanwhile in Greece, people have started rejecting their own inheritances in order to save themselves. At this point in the Greek crisis, so much real estate is underwater that it is worth less than it is worth. You don’t even want to inherit it for free because you cannot sell it for enough to pay off its debt if you accept it.

  With incomes falling (unemployment is at 23%) and taxes rising (particularly property tax) to meet Eurozone austerity requirements, old people have heaped mortgages onto their properties to make it through their declining years. To receive an inheritance from your parents is to receive their bundled debts.

  Thirty-two percent of all property loans in Greece are now delinquent. So much for the ultimate safe haven. So many properties in foreclosure sales drives down the price, making the next round worse. So, beware of dead Greeks bearing gifts if they are willing them to you. Gift recipients are lining up in government cues to decline their inheritance. Wealth destruction via real estate.

  But Europe has this solved. If everything goes well with Greece, the Greek’s condition is expected to resolve back to a normal economy in just fifty years! The Greek debt burden is about 177% of its entire Gross Domestic Product; compare that to the US now at a paltry 100%. Europe calculates the Greek’s situation will improve by 20% come the year 2060. Do you think maybe these people are debt slaves for life? I think they were better off under Rome in AD Zero than under Germany.

  Germany is helping out, after requiring some rather Spartan austerity, by proposing that all of Europe send its refugees goose-stepping toward Greece in order to save the northern states of Europe from those social and financial burdens. That ought to stomp out the tiny nation, which can’t even look out for its own welfare. Greece already has bottled up huge amounts of resentment against both Europe and its own government. Germany seems blindly determined to use its immigration policies to destroy its own European union. “Here, feed our poor and wandering masses while you Greeks lick the bottoms of our boots for nourishment.”

  Not sure who’s doing the math over there, but it doesn’t add up to success.

   

  And now for a Bilderberg Bonanza:

   

  (In case you are stunningly new to the world of conspiracy theories, the uber-elite one-percenters meet at the Hotel Bilderberg once a year to control the world through sub committees like the Illuminati … or something like that. Anyway, they’re really rich, and they suck.)

  The hacker group Anonymous seized control of the Bilderberg website today, posting the following message as the site’s new home page:

   

  …Dear Bilderberg mEmBers, From NoW(), each OnE of you have 1 year (365 days) to truly work in faVor of HumaNs and not youR private interests…. MiNd the cuRrent situation: We conTrol your expensive connected cars, we control your connecteD house security devices, we control your daughter laptop, we control your wife’s mobile, we tape YoUR seCret meetings, we reAD your emaiLs, we control your faVoriTe eScort girl smartWatch, we ARe inside your beLoved banks and we Are reading YoUr assets  You wont be safe anywhere near electricity anyMore  We WiLL watch yOu, from NoW on you got to WoRk for Us, Humanity, the People

   

  They had other choice words, too; but I don’t know if I recommend going to their site to check it out because who knows what it does to your computer while you’re there, but the link is provided for the brave of heart. I did and lived to tell about it. Maybe I’ll find out otherwise when a certain date clicks by.

  It’s getting harder for the globalists to feel safe in their dark-paneled, smoke filled hotel meeting rooms, high in the citadels of Germany, Switzerland, or down inhabiting the swampy Netherlands and other such heady retreats … and this is why they want to control the internet.

   

  The Christmas present from Fundamentalist Islam

   

  Subsequent to the Christmas bombing in Berlin, Europe is proposing tighter restrictions on the movement of cash and precious metals. (This is one more reason that gold is not necessarily a safe haven in any nation because stringent controls were placed on gold in the US during the Great Depression, too. It happens; so, diversify.)

  The European Commission says that tighter controls will help shut down funding for militant operations on the continent. I’m not sure how that will stop a guy from driving a truck into a crowd in Berlin, but maybe it will keep him from getting money for fuel. I think it is more likely that any excuse will do when bankers see people fleeing their proprietary product (money) for generic gold and need to find reasons to slow down the gold traffic. Probably more concerned about that than they are thinking this plan will slow down truck traffic in crowded streets.

  Of course, that’s also why central banks own so much of the yellow stuff they hate — so they can throw it off as ballast whenever there is a run on banks in order to try to kill the price of gold and scare people away from it. Why else would they keep so much of something they say is a poor investment, other than to control the only competition in town to their monopoly?

  The EU is also proposing stricter controls on the movement of Bitcoin funds. The new rules will allow seizure of funds, including gold, wherever “there are suspicions of criminal activity.” It’s unclear whether suspicion also requires a warrant, or just (that’s a lot of money, and I think you look funny or you had a drink with a bad guy).

  While the European Commission solves its immigrant-created catastrophes with golden rules, widespread unrest is becoming the norm due to the over-exuberant globalists’ drive to soak up unscreened Muslim refuges that are not integrating well into European society. They are almost entirely unemployed and sucking up social welfare that those unemployed Greeks and Italians could sure use. That has got to be a short-fused bomb.

  While the news is bad all over Europe, it’s not going so well for the globalists in the new year either! In light of extenuating circumstances, who could ask for anything more? The serfs are up, and the sooner they set sail from the Eurozone and its globalist control, the sooner they can have a real economy back. So, raise a cup of cheer; the New Year is here!

   

  And now, for some lighthearted New Year’s fun, here are my favorite Putin-Obama cartoons.

  

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